The Ghana National Petroleum Corporation (GNPC) is to take over the Ghana National Gas Company (GNGC), Finance Minister Seth Terkper has told Parliament on Wednesday.
GNGC is the operator of the Atuabo Gas Project, which is expected to reduce Ghana’s reliance on the West African Gas Pipeline (WAGPco) in Nigeria for gas to power the country’s thermal plants.
Terkper made the announcement when he justified the GNPC’s recent acquisition of a $700-million loan from the Deutsche Bank for oil and gas exploration. He said the loan will shore up operations in the oil and gas industry.
“The cost of borrowing at around 5 percent is highly competitive. The uses, as outlined by GNPC, are very clear and compelling, both commercially and strategically,” he said.
He said among other investment needs, “the pipeline and receiving facility in the Offshore Cape Three Points project, which GNPC will finance with US$493 million out of the loan proceeds, will provide a significant boost to monetising Ghana’s natural gas.
“It will result in a lower gas price. Similarly, the US$36 million to US$45 million investment to link the Tweneboa natural gas to the Jubilee FPSO will enable cheaper processing of the gas by the Atuabo Plant. In addition, GNPC plans to use between US$200 million and US$300 million as part of measures to provide adequate financial security for the OCTP gas project,” Terkper noted.
The Minister added: “These are all critical to our long-term national energy security. In short, the facility is expected to be as much game changer as the investment of about 1.0 billion in our first gas infrastructure. It is in this vein that Government has approved the takeover of GNGC by GNPC to create a gas subsidiary for the latter.”
He said: “The consolidation of GNPC and GNGC will make it possible to enhance a more integrated management and continue financing of projects in the oil and gas enclave immediately.”
Additionally, Terkper said: “It will make it possible to ease the conditions that investors impose for the national gas aggregator [to] start financing projects in the oil-and-gas enclave immediately.”
“Government will appoint a transaction advisor for these purposes and request them to advise on a further consolidation involving TOR and BOST,” Terkper added.
