Business News Tue, 9 Jun 2015

GNPC to fuel power barge

The Ghana National Petroleum Company (GNPC) has been selected to supply heavy-duty oil to power the emergency power barge procured from Karpowership, Turkey, when it starts generation in September, Kwabena Donkor the Power Minister has said.

The state-owned GNPC saw off competition from some top oil marketing companies who had expressed firm interest in supplying the required fuel to power the emergency barge when it starts operations by end of the third quarter.

“The Karpowership agreement is a business development guarantee and GNPC is expected to supply the heavy duty oil for the power barge.

“The ministry has seen this as a business development opportunity for GNPC. We believe that if there is any side-benefits arising out of the power barge, the state and its agencies should be the first to benefit from this; and GNPC is mandated by law to trade in petroleum products and should be given the opportunity,” the Power minister told Parliament last week.

Generational shortfall of between 400megawatts and 700megawatts has informed a power rationing regime, while government and power producers work frantically to restore faulty units and procure short-term power ships to bridge the shortfall.


Karpowership Company of Turkey, the company building the barges, has confirmed September 2015 as the tentative date the power ship will arrive in the country.

In order to facilitate the delivery of the power barge, GNPC has helped ECG provide a guarantee, which is a condition precedent for the barge to arrive in the country.

GNPC has secured a step-in right with ECG over the Powerships in the event of payment default by ECG. The Finance Ministry in a letter dated February 3, 2015 and signed by the Finance Minister, Seth Terkper, asked GNPC to issue bank guarantees on behalf of ECG to Karpowership.

“The Ghana National Petroleum Corporation is requested to issue two bank guarantees of US$50million each to Karpower on behalf of ECG.”

The Finance Ministry said it “will use its best endeavours to ensure that ECG establishes the necessary modalities to fully honour its commitments to GNPC under the bank guarantee”.


Furthermore, the later also indicates that “the ministry will also ensure that ECG establishes an escrow account with the Ministry of Finance as a signatory to harness its receivables toward repayment of ECG’s obligations secured by the bank guarantee under the PPA”.

The two barges are expected to supply the country with 450megawatts of power, and reports indicate that they are in the final stage of completion to be deployed to Ghana.

The first contractual 225MW power ship is scheduled to be delivered in Ghana come September this year, and the second one is expected to be delivered by January 2016. B&FT also has learnt that Karpower Ship is offering the Electricity Company of Ghana (ECG) an interim

120megawatts powership for delivery to Ghana in August ahead of the two power barges. According to the company, it is still in discussions to finalise the agreement with ECG. This notwithstanding, the company says it is still on course to deliver the originally contracted power barge.

Source: B&FT