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Nigeria cuts gas supply to Ghana over strike

By Businessnews Staff on September 19, 2014

The indefinite strike embarked upon by some workers of the Nigerian National Petroleum Corporation has led to the stoppage of gas supply to Ghana through the West African Gas Pipeline.

The NNPC branches of the Nigerian Union of Petroleum and Natural Gas Workers and the Petroleum and Natural Gas Senior Staff Association of Nigeria embarked on the strike after failing to resolve a dispute with the management of the corporation over pension and other issues.

“I understand there is no gas flowing into the West African Gas Pipeline due to the strike by the oil workers in the NNPC,” the General Manager, Corporate Affairs, West African Gas Pipeline Company, Harriet Wereko-Brobby, told our correspondent on Wednesday.

Early this year, Ghana was hard hit by gas supply shortage to its power plants due to significant reduction in supplies as Nigeria failed to meet its gas supply obligations by more than 50 per cent of the contractual volume.

Nigeria is contractually bound to supply 120 million cubic feet per day of gas to Ghana through the transnational gas pipeline. But the supply through the WAGP fell to about 30 mmscfd earlier in the year.

A cut in the supply of gas from Nigeria to Ghana through the WAGP is “not good news” and could damage the latter’s economy if prolonged, Ghana’s Central Bank Governor, Henry Wampah, told a news conference on Wednesday, Reuters reported.

“The Nigerian authorities communicated this bad news to us this (Wednesday) afternoon. We are working out emergency measures to forestall adverse effects on individuals and industries,” a highly placed source at the Ministry of Energy and Petroleum told the Daily Graphic in Accra.

“What the stoppage of gas flow to Ghana means is that the Asogli Power Plant will shut down because it runs only on gas,” the source said.

The Asogli Power Plant augments Ghana’s energy needs with an average of 180 megawatts.

“This is certainly not good because other power plants are operating below capacity due to maintenance schedules, delay in crude oil supply and other factors,” the source said.

Ghanaians, local and foreign businesses have been grappling with problems associated with the intermittent supply of electricity for several months.

The water level in the Akosombo Dam keeps dropping, while power plants in the country continuously operate below capacity.

The suspension of gas supply from the WAGP is said to have aggravated the already precarious power situation in the country.

Despite the challenges, the source gave an assurance that work was on schedule to tie the Atuabo Gas Plant to the Floating Production Storage and Offloading vessel, being operated by Tullow Oil Plc.

Thermal plants in the country are also expected to be powered by the gas, which will flow from the Atuabo Gas Plant.

Additionally, two power barges expected to generate a total of 450MW are being built in Turkey and are expected to be shipped to Ghana before the end of the second quarter of 2015.

Recently, there was an eight-month break in gas supplies from Nigeria to Ghana after a vessel broke one of the gas pipelines in Togo in August 2012.

The WAGP, which runs from Nigeria’s gas-rich Niger Delta region to Takoradi in Ghana, shipped an average of 65 mmcfd of natural gas to Ghana in 2012. The pipeline was shut down later in the year following damage to the Togolese section of the pipeline after suspected oil thieves vandalised it.

Protracted delays in repairing the pipeline resulted in no gas supply to Ghana for several months. In 2013, between 40 mmcfd and 50 mmcfd was supplied to Ghana.

With current capacity of 170 mmcfd, the WAGP, which is the first sub-regional natural gas project in sub-Saharan Africa, was initiated by the governments of Nigeria, Benin, Ghana and Togo to supply gas from the Escravos region of the Niger Delta to feed the gas-fired generating plants of the participating countries.

The NNPC workers’ strike, if not resolved soon, could hit petrol imports and distribution as the corporation accounts for 60 per cent of the Nigeria’s petrol imports, industry analysts have said, adding that it will also affect crude oil production and the country’s revenue.

[Punch]

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