Ghana Gas dismisses Parliament Mines and Energy Committee's report on GNPC-Genser deal

The Ghana Gas Senior Staff Association has refused to accept the report from the Parliamentary Committee on Mines and Energy on a gas supply agreement between Ghana National Petroleum Authority (GNPC) and Genser Energy Ghana Limited, Myjoyonline.com reports.

Richard Alamu, the chairman of Ghana Gas Senior Staff Association of Ghana has raised concerns about the conditions of the deal indicating that it could affect customers negatively and lead to Ghana recording some losses.

“The nation – Ghana, we all need to be very careful of the dire consequences of the decisions that are made today. There are a lot of things that we want improvement on and we cannot allow our birthright as primary actors to be going to a foreign land.

“So the initial agreement was for them to come and assist and they abrogated the contract … so we need to make sure that nobody throws dust into anybody’s eyes by stating that we even went into agreement from the onset,” he said according to Myjoyonline.com.

Ghana Gas further warned that the report by the Parliamentary Committee on supply agreement if implemented, would lead to companies having to deal with dire repercussions.

“IMANI, Bright Simons, Ghana Gas and all other agencies crying for the Genser deal to be looked at entirely are not crying for crying or attention sake because there are dire consequences for the country,” Myjoyonline.com quoted.

According to the parliamentary committee’s report, the country stands a chance of benefitting from the deal in terms of job creation and energy sector security.

The report further revealed that Ghana will make make “savings to the tune of $1.462 billion as GNPC will lose $ 1.462 billion if GEGL moved to WACOG Net Back”.

In summary, the committee emphasized that there is enough gas in the background, as a result, Ghana and Genser can operate and run convenient Gas Transmission Plants to power the economy.

Meanwhile, John Jinapor, the Ranking Member of Parliament on Parliament’s Mines and Energy Committee, has dissociated himself from the Genser Energy and Ghana National Petroleum Corporation (GNPC) Sales Agreement Report.

In a statement released on August 17, 2023, John Abdulai Jinapor urged the general public to disregard the report because it is inaccurate.

“For the avoidance of doubt, I wish to categorically disassociate myself from the content and intents of the said report as it does not accurately reflect my position and that of the Minority in its entirety.

“Firstly, it is true that I have consistently maintained that the GSA is not fairly priced and will result in significant losses to the state. It cannot, therefore, be the case that I disagreed with the position of ACEP/IMANI that the GSA in its current form will result in huge losses to the state.

“More importantly, it is inaccurate to report that the entire membership of the committee disagreed with my position,” Myjoyonline.com quoted him as having said.

Background

The Parliamentary Select Committee on Mines and Energy has endorsed the agreement between the Ghana National Petroleum Corporation (GNPC) and Genser Energy Ghana Limited.

In a report sighted by GhanaWeb, the committee outlined eleven reasons why it believes the deal will serve the interest of GNPC and Ghana.

The committee also said that it found no evidence of any losses from a deal between the Ghana National Petroleum Corporation (GNPC) and Genser Energy Ghana Limited (GEGL)

The investigation was initiated in response to claims made by the African Centre for Energy Policy (ACEP) and the IMANI Center for Policy and Education in July 2022 alleging incorrectly that the deal incurred a loss of $1.5 billion for the nation. The Committee’s report instead found benefits for Ghana far exceeding that sum.

The ACEP and IMANI reports raised concerns over a Gas Sales Agreement (GSA) between GNPC and Genser Energy Ghana Limited (GEGL), asserting that Ghana stood to lose the “whopping and galactic sum of $1.5 billion” due to this arrangement.

The allegations raised by ACEP and IMANI claimed GNPC sold gas to Genser at significantly reduced rates compared to its purchase price, resulting in a perceived subsidy.

Following an 11-month-long investigation, the Parliamentary Committee has refuted the claims made by ACEP and IMANI, stating that the GSA is not a "sweetheart contract."

The Committee found the computation methods used by ACEP and IMANI faulty. The CSOs calculated a hypothetical loss based on the contractual sum of $2.79/MMBtu. But that price reflects offsets from a capacity charge of $3.29/MMBtu.

The Committee found the arrangement much to the Nation’s benefit, presenting 11 key economic advantages associated with the deal ranging from energy security to job creation; from the development of future industries to foreign direct investment.

BS/WA

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