The Ghana National Petroleum Corporation (GNPC) has downplayed the heightened cynicism by stakeholders that the country may soon be faced with another excess gas situation as it happened in the power sector but for which government had to pay millions of dollars notwithstanding its inability to utilise the power.

The GNPC has signed an agreement with Rosneft Trading SA (RTSA) for the supply of 1.7 million metric tonnes per annum (mmtpa) of gas. Under the contract terms, GNPC will procure LNG from RTSA under a 12-year Gas Supply Agreement (GSA), which will be regasified and delivered onshore to thermal Independent Power Producers (IPPs) as well as other industrial customers, necessitating the construction of an estimated US$350 million LNG Project in Tema to receive, store, regasify, and deliver the petroleum product.

The country, currently, holds 490 billion cubic feet (bcf) of gas reserves from the Jubilee Fields; TEN fields has associated gas reserve of 363 Bcf, while Sankofa Gye Nyame hosts non-associated gas reserves of 1,107 Bcf. Upon full development, the Mahogany and Teak discoveries will also contribute a total of 120 Bcf even as the country continues to make more discoveries.

Executive Director of the Africa Centre for Energy Policy (ACEP) Benjamin Boakye has expressed disquiet at the agreement citing inability of the country to consume the gas that would be imported since domestic production is capable of satisfying demand.

“There is no consumption that you can bring on stream to take up that excess gas that we are going to import into Ghana. We are only going to burden the Ghanaian with that much money and we have to take action so we don’t get there”, the ACEP boss stated.

But GNPC’s CEO, Dr K. K. Sarpong, disagrees alluding to several measures that have been put in place to forestall any excess gas situation.

Responding to these concerns at the launch of the Industry Report by the Chamber of Bulk Oil Distributors (CBOD), Dr Sarpong disclosed, amongst others, the successful renegotiation with Shell to stagger the levels starting with 75mscf in year one, 125 for the second year, 150 and 175 in the third and fourth year respectively.

“I don’t envisage, if government will really do its part, by making the necessary adjustment to the VRA nominations for NGas and the OCTP nominations, then we should be able to absorb all the gas.”

Dr Sarpong was optimistic the construction of the LNG terminal will be completed soon and actual supply starting around July.

Meanwhile, the Ministry of Energy Advisory Board has set up a committee to drive the consumption of LNG without which the country would be exposed to significant losses.

According to the Ministry, it is collaborating with the Energy Commission to get industries to start looking to gas to power their production.