Why Nigeria Holds Ghana By The Balls

The New Patriotic Party Member of Parliament for Afigya Kwabere South, Hon. William Owuraku Aidoo, has blown the lid surrounding the seeming tension between Ghana and Nigeria, over the latter’s incessant failure to supply natural gas to her West African neighbour, as specified in a pact signed between the two sister countries.

According to Owuraku Aidoo, a member of the Parliamentary Select Committee on Energy, indications are that Nigeria has found a higher value for the gas back home, hence its reluctance to supply Ghana’s share of 120 million cubic feet, as specified in the contract agreement.

Ghana, therefore, has an option to go back to the drawing board to renegotiate new pricing terms, with the suppliers to guarantee constant supply or continue to play footsie with Nigeria, while the problem lingers.

According to the legislator, the suppliers are cashing in on the commodity, which is attracting higher prices from other companies, compared to what they would have made from Ghana.

Ghana has a contractual agreement with N-gas to deliver 120 million cubic feet of gas through the West African gas pipeline, but Nigeria has often not lived up to the contractual terms, as supplies to Ghana fluctuates between 30 to 70 million cubic feet. Sometimes, there are no supplies at all.

According to Mr. William Aidoo, who spoke to Joy FM yesterday, under the original agreement, the Nigerian government entrusted the gas to the two international oil giants – Chevron and Shell, operating in that country. The two has since added value to the commodity and are cashing on it.

“Unfortunately, these two international oil companies find it more lucrative to transform the gas to liquefied natural gas for sale on the international market, than to supply the raw gas to us,” the legislator hinted.

He further noted that soon after the West African Gas pipeline Project came on-stream, seven international independent power producers also appeared on the scene in Nigeria, raising the stakes on the value of the product. “So in effect, Nigeria is having a similar problem as per the oil supplies to that country.”

He, however, said it would be in the best interest of Ghana “to go back to the drawing board and renegotiate the price, because there is no incentive for those two companies [Shell and Chevron] to supply us with gas, when they could sell it in another form for a higher price”.

Earlier, Dr. Wereko-Brobbey, a former Chief Executive officer of the Volta River Authority – the nation’s power generator – had suggested to the government to invoke provisions of the agreement to compel Nigeria to supply the contracted amount of gas to Ghana.

The national power distributor had been on a stealthy load shedding exercise, since the beginning of the year, an exercise it had denied until it recently announced a planned load shedding management which will take effect from today.

Keen observers of the deteriorating energy situation in the country are attributing the problem not only to the unreliable gas from Nigeria, but also Ghana’s inability to buy crude to power most of its power plants.

Others have also suggested that Nigeria was withholding the gas because Ghana was unable to pay for it.

But Deputy Minister of Energy, Mr. John Abdulai Jinapor told The Chronicle via phone yesterday, that the government of Ghana had never defaulted in payments for the gas from Nigeria.

Meanwhile, the Minister of Energy, Mr Armah-Kofi Buah is currently in Nigeria to broker a deal for the timely release of gas to the country.