Skip to main content

WAPCo cuts supply over $13m mounting debt

 


The West African Gas Pipeline Company Limited (WAPCo) has suspensed natural gas transportation services to the Ghana National Petroleum Corporation (GNPC),deep throat sources have confirmed to the Graphic Business.

This follows the inability of GNPC to settle its indebtedness to WAPCo to the tune of over a $13.99 million.

The decision, which took effect from July 1, comes after a series of negotiations between the two entities over debt arrears, although the GNPC paid $1.246 million to WAPCo last week.

WAPCo, responsible for transporting natural gas from Nigeria to several countries in West Africa, in a letter dated June 27 to the GNPC, cited the payment arrears as the primary reason for the interruption.

This means that GNPC will not be allowed to flow any gas, including the 60,000 MMBtu/ day firm transportation services mainly from Takoradi to Tema. 

The sudden halt in gas supply to GNPC has raised alarm bells among industry experts, as the country’s energy generational mix relies on natural gas and thermal for electricity production, with the GNPC playing a crucial role in ensuring a steady supply to power plants across the country. 

The suspension, therefore, threatens to disrupt the nation's energy stability and potentially lead to power shortages.

The interruption in gas supply has also sparked concerns among citizens, who fear a return to the frequent power outages experienced in the past. However, experts are hopeful that a resolution can be reached promptly, given the significance of the issue for both WAPCo and GNPC.

As negotiations continue, Ghana remains on high alert for potential energy shortages.

Power production

Last week, the government assured citizens that contingency plans are in place to ensure minimal disruption to power supply, including increased reliance on other energy sources such as hydroelectricity and thermal generation after independent power producers threatened to shut their operations over debt arrears.

So far the Electricity Company of Ghana and the IPPs have agreed on a settlement that covers 30 percent of debt arrears.

A source familiar with the situation told the GRAPHIC BUSINESS that the situation highlights the importance of diversifying the country's energy mix and reducing reliance on a single source.

“It also serves as a reminder of the need for effective communication and collaboration between stakeholders to ensure a stable and sustainable energy sector,” the source said.

The source added that both WAPCo and GNPC are expected to engage in intense negotiations in the coming days to find a resolution and restore gas supply to GNPC.

“The outcome of these talks will undoubtedly have significant implications for Ghana's energy stability and the overall well-being of its citizens,” the source added.

Transportation

WAPCo, in June 2019 completed commissioning and performance testing of the Takoradi phase of the Takoradi - Tema Interconnection Project (TTIP) and began transporting natural gas from the west (Takoradi) to the east (Tema) at the request of customers.

The project involved the expansion of WAPCo facilities at Takoradi and Tema as well as the tie-in of the West African Gas Pipeline (WAGP) system at Takoradi to the Ghana National Gas Company’s facility/line. This was achieved by the execution of various commercial agreements by the parties.

The TTIP is a collaboration between WAPCo, the Ghanaian Energy Ministry, the Ghana National Petroleum Corporation, the Ghana National Gas Company and Eni Ghana.

Comments

Popular posts from this blog

Fitch Solutions retains 2025 growth rate projection at 4.2%

 Fitch Solutions has reaffirmed its projection that Ghana’s economy will expand by 4.2% in 2025. This estimate slightly exceeds the International Monetary Fund’s forecast of 4% and the World Bank’s projection of 3.9%. The UK-based research firm attributes its outlook to historically high gold prices, which are expected to cushion the Ghanaian economy against a global slowdown triggered by rising tariffs. Higher gold prices are anticipated to strengthen government revenue, enhance foreign exchange earnings, and help sustain currency stability. The report also highlights that Ghana is relatively less vulnerable to increasing trade restrictions from the United States, given that its primary exports—gold and crude oil—are not directly affected by the tariffs introduced by President Trump’s administration. Moreover, the US constitutes only about 4% to 5% of Ghana’s total exports. In contrast, Ghana’s trade relations are more heavily oriented toward China and European countries, particul...

BoG injects $20m into FX market to support 11 BDCs

  The Bank of Ghana (BoG) has injected $20 million into the foreign exchange market in the latest round of its forward FX auction targeted at Bulk Oil Distribution Companies (BDCs). The intervention, which benefited eleven BDCs, is part of the central bank’s broader strategy to stabilise the cedi and ensure price stability in the petroleum downstream sector. Held on Tuesday, April 29, the auction was priced at a locked exchange rate of GHS 14.28 to the US dollar, with bid offers ranging from GHS 13.85 to GHS 15.55. This move reflects the BoG’s continued effort to deepen forex liquidity and safeguard the domestic fuel supply chain against volatility in global energy markets. By directly supplying FX to BDCs, the central bank seeks to ease pressure on the interbank market, guarantee the uninterrupted flow of petroleum products, and mitigate the pass-through effects of exchange rate fluctuations on fuel prices. The $20 million disbursement forms part of a $120 million programme for th...

Kenpong Travel & Tours Champions Breast Cancer Awareness During Customer Week

  As part of activities to mark Customer Week, Kenpong Travel & Tours, a leading travel agency in Ghana, is joining the global fight against breast cancer. October is Breast Cancer Awareness Month, and the company is passionate about spreading hope and support to those affected. At Kenpong Travel & Tours, we believe that travel and exploration can be therapeutic and empowering. That's why we're committed to supporting our customers and the broader community in the fight against breast cancer. We're proud to stand in solidarity with breast cancer warriors and survivors. At Kenpong Travel & Tours, we believe that everyone deserves a chance to explore the world and create unforgettable memories. Let's prioritize health, support one another, and fight against breast cancer," said Kennedy Agyapong, CEO of Kenpong Travel & Tours. Our efforts are focused on raising awareness, promoting early detection, and supporting those affected by breast cancer. We urg...