Mounting debt killing Ghana Gas

The web of debt that entangles power utilities is threatening the survival of the youngest among them -- Ghana Gas; and “it is very crucial that we deal with this issue” Petroleum Minister Emmanuel Armah Kofi Buah told members of the company’s new board.

“If you see government recently announcing a levy it is because the survival of Ghana Gas and the future supply of lean gas is at stake. It is very crucial that we deal with this issue,” he said.

“You have to continue guiding Ghana Gas in tariff calculation to make sure the company is competitive. But more importantly, Ghana Gas is confronted seriously within this short period of time with serious debt because all the lean gas it produced has not been paid for by the VRA,” the minister said while swearing-in the board members.

The VRA owes Ghana Gas approximately US$200million for gas supplies, and the minister reminded the five-member board of the need to work hard to resolve the commercial, technical and other challenges confronting the company.

The new board is led by John Armstrong Yao Klinogo, a former Resident Manager of PricewaterHouse. Other members include CEO Dr. George Sipa Yankey, CEO of GNPC; Alex Mould and Vivinne Gadzekpo of the Petroleum Ministry; and Awulae Amihere Kpanyinli, Paramount Chief of the Eastern Nzema Traditional Area.

Speaking to the B&FT after the ceremony, Dr. Sipa Yankey said the company is hoping that the VRA -- with help from government and the PURC -- will liquidate the debt in the next few months.

“Some work, I know, has been done by government. The president set up a team to look at the negative debt and debts that are owed by the various power companies. So I believe that sometime in March we should be able to get all our monies from the VRA,” he said.

The Petroleum Minister told the new board that as more gas comes on-stream it will be important that the infrastructure is expanded.

“As you know, there are plans to bring more gas on-stream. We are talking about the TEN and OCTP, and even other projects that are going to come in the future.

What strategies are we going to put in place to make sure Ghana Gas is ready for all those gas volumes that will come? Your responsibility will be to work with management to address all the technical issues,” he said.

“GNPC as the aggregator of gas must, of importance, work closely with the Ghana Gas Company to ensure that we do not leave any weak links in the value chain.

The intention of the government is not to allow GNPC to use GNGC as a political football, but use the two companies to strengthen each other for the benefit of the people of Ghana,” the minister said.