Gas Supply: Ghana Substitutes Nigeria With Equatorial Guinea

 

Image result for Ghanaian president Akufo- AddoYemisi Izuora

Ghana one of the countries importing gas from Nigeria is no longer comfortable with her Gas supply agreement with Nigeria.

A state visit of Ghanaian president Akufo- Addo to Equatorial Guinea according to government sources was to “deepen the cordial bilateral relations between the two countries and explore possible areas of cooperation.”

Akufo-Addo, while in the Central African country signed a government-to-government Heads of State Agreement with Equatorial Guinean government for the supply of LNG from Equatorial Guinea to Ghana.

Ghana in the 1990s signed a memorandum of understanding with Equatorial Guinea under which Ghana was to benefit from a crude oil deal and economic cooperation. This led to a visit to a visit by President Obiang Nguema Mbasogo to Ghana in 1997 and a reciprocal one by then President, Jerry Rawlings in 1998.

Ghana and Equatorial Guinea created a Permanent Joint Cooperation Agreement under which Equatorial Guinea agreed to supply Ghana with crude oil for processing and re-export.

A government delegation led by Dr Kwesi Nduom, former Energy Minister, also visited Equatorial Guinea in 2004 and signed agreements in the areas of energy and trade that was to see the two countries strengthening trade in that area.

The sitting President at the time, John Agyekum Kufuor was therefore in October 2007, invited for a one-day visit to Equatorial Guinea to participate in the commissioning of that country’s $1.5 billion Liquefied Natural Gas plant, EG LNG, also known as Punta Europa LNG.

Ghana had only a few months earlier discovered crude oil in commercial quantities west of Cape Three Points in the Western Region and was hopeful of producing gas to complement its already existing power infrastructure to address the country’s energy shortfalls.

Between 2005 and 2009 when the construction of the West African Gas Pipeline started and when gas eventually ran through the pipe, Ghana had held advanced talks with Equatorial Guinea on related subjects of gas importation to augment its energy deficit.

The country’s power situation had become dire and it was quite obvious the nation could not rely on the supply from Nigeria due to the many various challenges and excuses including the murder of one of the project contractors, moisture in the pipeline, leakages detected on the pipeline striking workers and state saboteurs in Nigeria.

In August 2012 for instance, Ghana, Togo and Benin did not receive gas supply from Nigeria for close to a year due to severe damage caused to the pipeline by pirates.

Ghana’s indebtedness to the company also resulted in the cut of supply.

By this time, there were clearer signs that Equatorial Guinea would offer a more appreciable service to Ghana compared to Nigeria.

Under the agreement, Equatorial Guinea would supply LNG to Ghana for a period of 15 years, with the deal reviewable every five years to meet the country’s its ever growing demand on power. As part of the deal, an LNG regasification terminal will be built in Takoradi.

Ghana will receive gas supply of about 150 million standard cubic feet of natural gas per day to Ghana. This is 30 million cubic feet less than what Nigeria was originally to supply the country.

The quantity, according to experts is enough to supply about 800 megawatts of power.

With the deal being signed and both leaders’ commitment, Ghana may be putting the final nail to the coffin that will see it wean itself from gas supply from Nigeria Gas, an intention the former petroleum minister, Emmanuel Armah Kofi Buah made public in August 2016.

The ever-recurring hiccups in the supply of gas from Nigeria to Ghana for power generation have become too many and making the Ghana incur more costs than expected.

Meanwhile, Ghana is saddled with many other power agreements including those on LNGs signed by successive governments.

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