Ghana Gas unfit to be National Gas Aggregator – ACEP
The Africa Centre for Energy Policy (ACEP) has warned government against consenting to the request of the Ghana National Gas Company (GNGC) to make it the National Gas Aggregator instead of the Ghana National
Petroleum Corporation (GNPC).
It offered that Ghana Gas’ financial muscles were too weak to take on such a hefty role; that it does not possess the wherewithal to assume the liabilities of the commitments associated with being the aggregator in the context of Ghana – an obligation that the GNPC could relatively accommodate in light of its comparatively firmer financial holding.
This was contained in a statement issued by the think-tank responding to a letter it had sighted dated May 11, 2020 penned from the Presidency, in which government had granted the GNGC’s request and instructed the Minister of Energy to facilitate the transfer to make Ghana Gas the national gas aggregator.
However, ACEP said transferring this crucial role to the company posed dire risks for upstream investment and the power sector.
“The weak balance sheet of GNGC makes it unattractive to the investor community which has implication for exploration and production,” the statement said.
Further, ACEP said the GNGC’s proposal is in direct defiance of the Gas Master Plan which plainly recommends that the GNGC be made a ‘fully owned subsidiary of the GNPC’. This decision, made in 2015 when the Masterplan was developed, was to afford an improvement in the gas sector’s coordination and “facilitate infrastructural investment and financing”.
In its proposal, Ghana Gas had enumerated several gas sector issues and pegged its request upon the desire to see lower pricing in the sector. In support of this, it proffered some measures to arrive at this lower pricing -measures that in the think-tank’s estimation, would rather increase gas pricing and do more harm than good.
“The gas sector issues used by GNGC to make a case for integrating the gas midstream are issues that could be addressed by the stakeholders in the sector without GNGC becoming a gas aggregator,” ACEP said.
Besides, the proposal of Ghana Gas to be made the Aggregator did not confirm to the Gas Masterplan, which according to ACEP is the result of institutional and stakeholder consultation with support from USAID.
Going ahead with GNCG’s request is thus a blatant disregard for the Master Plan, which the Centre said, puts off the confidence of Development Partners to finance future policy developments.
To by the Gas Masterplan, thus, ACEP is asking government to make Ghana Gas a subsidiary of the GNPC. This, it said, would help the country obtain the desired results for Ghana’s oil and gas sector, with the Corporation being the ‘anchor’. The move would enable the national oil company to financially support its subsidiaries.
“This also requires that GNPC is refocused to invest its money in the core oil and gas business as has been done by other integrated national oil companies,” ACEP advised.
Source: Energy Ghana