VRA?s crude oil import bill to rise

The crude oil import bill for the operations of the Volta River Authority (VRA) is expected to increase from $180 million this year to $300 million next year.

This is because the VRA will have to import more fuel for the thermal plants to boost thermal electricity generation, given the uncertainty hydrology of the Volta Lake. The thermal electricity generation is expected to account for about 65 per cent of the country?s total electricity energy while hydropower will account for 35 per cent.

The Authority made this disclosure at a day?s seminar on the West African Gas Pipeline Project (WAGP), Overview Framework and Key Principles of the International Project Agreement (IPA), WAGP Treaty and Legislative Outline held in Akuse near Accra.

The seminar organised for the Parliamentary Select Committee on Energy, was aimed at updating and sensitizing the membership of the committee on Energy and Mines as well as sister Parliamentary committee on the project to facilitate their understanding to build support and goodwill for a smooth ratification process.


The WAGP entails the construction of a natural gas transmission pipeline from Nigeria through Benin and Togo at Ghana at an estimated cost $500 million.


The infrastructure will transport natural has from the vast gas reserves of Nigeria, estimated to be in excess of 120 trillion cubic feet, to markets in the three countries.


About 85 per cent of gas transported will be used as fuel to generate electricity while the rest will be used for industrial development.


The agenda of the project is to ensure that first consignment of gas supply is delivered by June 30, 2005.

Six investment consortiums will own the company, including the VRA, which owes 16.3 per cent shares. The VRA is to invest $80 million in the project.


Next year will mark a major turning point in VRA when thermal energy generation will exceed that of hydropower as a result of uncertain hydrology of the Volta Lake which dries up often.


The VRA describes the project as very important, adding considering the high cost of fuel for the operation of the thermal plants the use of natural gas for electricity generation will provide comparatively lower cost and sustainable fuel to support power generation in the country.


Ghana?s Energy Minister, Albert Kan-Dapaah (MP) said the WAGP Treaty, with the accompanying IPA documents, is due to be signed by heads of state of the four project countries early next year.


He said the importance of the WAGP project to Ghana couldn?t be over-emphasised, adding that the government considers the WAGP project as one of the corner-stones of the National Energy Security and Sustainability Strategy.?

The minister said it is expected to provide comparatively lower cost, clean and sustainable fuel to support power generation and industrial development in Ghana and pointed out that it is rightly regarded as the energy source capable of propelling Ghana economically forward and enhancing the prospects of realizing the government?s declared vision of the ?Golden Age of Business.?


He said the availability of safe and secured natural gas from Nigeria is expected to significantly reduce cost of electricity generation from the country?s thermal plants and this will in turn, reduce cost of production by industries and offer them vast opportunities to be competitive in the sub-region as well as in global markets.


Mr. Kan-Dapaah said the Letter of Intent (LOI) of the Takoradi Gas Sales Agreement was signed on June 3, 2002 and this confirmed, Ghana as the main foundation market on which the entire project is anchored.


He further indicated that the project was registered at the Environmental Project Agency (EPA) office in Ghana on August 19, 2002 for Environmental Impact Assessment (EIA), adding that the Environmental Baseline Study (EBS) from Takoradi and Tema project sites were also launched in November this year.


The 617-kilometre pipeline project would be built, owned and operated by the West African Gas Pipeline Company Limited (WAPCO) under authority granted by the governments of the project countries.