GNPC to pay $ 250 million for unused gas | Economy

Assumption obligations arising from various gas purchase agreements have weighed heavily on the Ghana National Petroleum Corporation (GNPC), said the Parliamentary Commission on Mining and Energy.

Under the agreement, the government is forced to take gas from the various oil fields in the country and the non-compliance leads to a penalty.

Due to the country's failure to put in place the appropriate infrastructure to extract gas from these deposits, the GNPC had no choice but to pay $ 250 million to settle its obligations in 2019.

That was in the report of the committee on programs and activities for 2019, which was presented to the House on April 10.

The committee noted that the monthly commitment of the Sankofa-Gye-Nyame field amounted to about 42 million US dollars per month.

Relocation of Karpowership

In order to fully utilize the gas from these deposits, the GNPC has budgeted US $ 31.5 million to relocate the Karpowership power plant from Tema to Aboadze in the western region to allow it to use around 60 million cubic feet per day of gas. of the Sankofa-Gye-Nyame field.

This should also help ensure the full use of local gas resources while ensuring that the barge reaches its capacity.

GNPC commitment under escrow account

The committee was also informed that the GNPC's commitment to maintain a minimum amount of $ 205 million in escrow escrow account to cover four and a half months of gas payment under the agreement. Offshore Gas Supply Cape Three (OCTP) had been revised downward in the United States. $ 157 million as a result of the recent gas price adjustment.

Although the company made efforts to meet the minimum amount required under the agreement, the Panel noted that downstream gas buyers were not able to pay for the gas delivered to them; which forced the GNPC to make permanent annual budgetary expenditures. allowances to replenish withdrawals.

The committee therefore urged the government to intensify its efforts to find sustainable solutions to the financing challenges of energy sector institutions.

Financial needs

It was also observed that total revenue of $ 1.3 billion was initially expected to be earned by GNPC in 2019, while expenditures were expected to reach $ 1.6 billion.

Expected sales include the Company's share of crude oil sales and internally generated funds for a total of US $ 609.2 million and a US $ 748 million gas activity. a difference of US $ 250.76 million.

However, the Committee noted that, unlike the Petroleum Revenue Management Act, 2011 (Law 815), the company had reported in its income $ 232.82 million of oil royalties due to the state. .

Although the company indicated the consent of the Department of Finance under this funding mechanism, the panel concluded that it was in contravention of the Act and therefore recommended its deletion.

The Minister of Energy, in consultation with the company, accepted the committee's recommendation and redefined spending priorities, creating a new funding gap of US $ 493.58 million, which should be financed by debt.