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Business News of Wednesday, 27 June 2018


$750M debt VRA owes Ghana gas alarms PIAC

The Public Interest and Accountability Committee (PIAC) says the rising indebtedness of Volta River Authority (VRA) to the Ghana National Gas Company (GNGC) poses dire consequences for the nation.

PIAC’s assessment revealed that VRA’s debt to Ghana Gas is over $750 million as of the end of 2017.

This amount is significant because the Atuabo Gas Plant was constructed at a cost of $1 billion from a loan from the Chinese government, which the Ghana government has to pay back.

78.1 billion MMScf produced in 6 years

In its Annual Report on the Management of Petroleum Revenues for 2017, PIAC disclosed that from inception of gas production to the end of December 2017, the Ghana National Petroleum Corporation (GNPC) has supplied 78.1 billion Standard Cubic of Gas (78,130.07 million) (MMScf) of raw gas to GNGC.

This, the report noted, is equivalent to gross revenue of $240.1 million ($240,171,805.20) of raw gas.

Out of this amount, the report said GNGC has paid $9.8 million ($9,856,621.67).

Ghana Gas owes GNPC $230.3m

Therefore, as of the end of 2017, GNGC’s indebtedness to GNPC stood at $230.3 million ($230,315,202.27).

Ghana Gas received $94.7m worth of gas in 2017
According to the PIAC report, GNGC received raw gas worth $94,776,691.97 from GNPC during the year, for which payment is outstanding.

Ghana Gas sold $360m worth of gas in 2017

GNGC’s receivable from the sale of lean gas, Liquefied Gas (LPG), and condensates for the period was $360 million ($360,936,668.21).
Of this amount, only $58,107,000.63 was paid.

VRA received lean gas worth $279m in 2017

It noted that VRA received lean gas worth $279 million ($279,910,118.08) from GNGC, which has not been paid.

This amount incurred an interest of $16.7 million ($16,737,531.29. 15).
The prices of raw gas and lean gas were stable.

LPG, condensates prices went up

However, the prices of condensates and LPG witnessed a year-on-year appreciation of 9% and 33% respectively.

77,294 MMScf produced in 2017

A total of 77,294.44 million standard cubic feet (MMScf) of associated gas was produced from the Jubilee, Tweneboa-Enyenra-Ntomme (TEN) and SGN fields in 2017.

Jubilee produced 42,261.35 MMScf while TEN produced 26,818.33 MMScf. Gas production from the SGN Field commenced in May 2017 and totalled 7,214.76 MMScf for the year.

This represented an improvement of the utilisation of Jubilee gas for processing over the 56% exported to the plant in 2016.

Flaring and re-injection of gas

The proportion of associated gas from Jubilee field that was re-injected to maintain reservoir pressure and flared was about 13% and 11% respectively.
Conversely, the proportions of gas flared on the TEN and SGN fields were 29% and 55% respectively.

The total volume of gas supplied to GNGC in 2017 was 30,831.71 MMScf, with a calorific value of 2,681,617.92 MMBTu.

A volume of 291.71 MMScf was exported from the TEN field between May and December 2017 to substitute Jubilee foundation gas during the flare tip replacement on the FPSO Kwame Nkrumah.

Raw gas supply was interrupted for 21 days in February 2017 to execute the TEN Tie-In works.

GNGC sold its products at Public Utilities Regulatory Commission (PURC)-approved rates.

GNPC sold raw gas for $2.90 per MMBTu

The price at which GNPC sold raw gas to GNGC remained stable throughout the year at $2.90 per MMBTu.

The price of lean gas was stable at $8.8424 per MMBTu throughout 2017, just as it was in 2016.

Condensates prices went by 9%

The price of condensates fluctuated between a low of $241.05 per metric tonne in July and a high of $377.18 in September, averaging $314.38.
The average price of condensates in 2016 was $287.80. This saw a year-on-year appreciation of 9%.

LPG recorded 33% price increase

LPG was sold at an average price of $314 per metric tonne, fluctuating between a low of $306.27 in July and a high of $537.60 in December.

The average price of LPG in 2016 was $319.66, recording a rise of 33% year on year in Ghana.