FG, Ghana to settle N33.8bn gas debt

Federal Government has reached an agreement with Ghana on the modalities to settle the outstanding N33.8bn owed by the Volta River Authority, VRA, on gas supplied for power generation by a Nigerian compa­ny, N-Gaz.
The highlight of the agreement was that the total sum of gas sup­ply debt will be cleared by Febru­ary 2016 at the latest.
The agreement which was reached between a team led by the Group Managing Director of the Nigerian National Petroleum Cor­poration, NNPC, Dr. Ibe Kachikwu and the President of Ghana, John Dramani Mahama, stipulated that VRA will pay the balance of Au­gust and September invoices by October 31, 2015.
It was also agreed that all oth­er supplies as from October will be paid for on or before due date while backlog of arrears from 2012 will be defrayed by February 2016.
It would be recalled that Nigeria had threatened to cut gas supply to Ghana by 70 percent over a $181 million debt that had accumulated over the years.
Ghanaian Minister of Power, Dr. Kwabena Donkor had led a del­egation to Abuja last week to hold talks with Nigerian authorities with a view to resolving the issue.
N-Gaz is a joint venture com­pany owned by NNPC, Shell and Chevron that delivers gas through the West African Gas Pipeline Company, WAGPCo, to Ghana.
Federal Government of Nigeria had earlier received $10 million for its gas supply from government of Ghana a few days ago.
A source in Ghana had main­tained that the government has settled part of its debt to the West African Gas Pipeline Company, WAPCo, and Nigeria Gas Asso­ciation, N-Gas, following the first round of talks with the Nigerian authorities.
WAPCo, it was learnt had threatened to cut gas supply to Ghana over $180 million debt owed N-Gas.
He said a high level government delegation led by Power Minister Kwabena Donkor visited Abuja, Nigeria to discuss with govern­ment officials following WAPCo threat to cut gas supply.
“Based on verbal communica­tion we received last night that there is ongoing discussions about how VRA would meet the conditions that was set by N-GAs. So pending the result of that dis­cussion, we have been asked by N-GAs to hold on,” she said.
Before then, WAPCo had ex­pressed its readiness to help Gha­na meet its energy needs, says Mr. Walter Perez, Managing Director.
Speaking on the topic “Ghana’s Energy Needs: The role of the WAGP” at the sixth Ghana Oil and Gas Summit in Accra on April 23, 2015, Mr. Perez said the pipeline, which was initially constructed to transport natural gas from the East (Nigeria) to the West (Gha­na) with one major shipper for at least a decade, has had to adjust to take into account developments, which have occurred in the sub region, especially in Ghana, since the pipeline started opera­tions in 2011.