The Ministry of Petroleum has denied claims by the New Patriotic Party that Mahama-led administration intends to mortgage Ghana’s gas to China in a bid to convince the China Development Bank (CDB) to reactivate the remaining $2 billion of the $3 billion loan to government.
This comes days after the acting Power Minister, Seth Terkper admitted on the Citi Breakfast Show that government is presently negotiating with the Chinese and plans to use the country’s gas as guarantee.
Deputy Minister of Energy, John Jinapor earlier denied the existence of such plans after the NPP made the claims.
The opposition party last week said the agreement which could see the country offer one of Ghana’s gas fields to China for a period of 19 years starting in 2018 has bleak implications for the future of Ghana
They also said Ghana may experience power crisis in 2017 if the governing National Democratic Congress is retained in power.
But the Ministry of Petroleum in a statement signed by its Head of Communications, Edward Bawa, said the NPP is peddling untruths.
“There is no basis for the assertion that Ghana’s gas would be exported for $2 billion. All of Ghana’s gas are being used and would continue to be used in Ghana for power generation. We should not confuse the use of proceeds or revenues from the sale of gas or its derivatives to support financing arrangements with the actual sale of lean natural gas and liquids. It is ridiculous to say that Ghana’s gas would be sold to China.”
The statement explained that the CDB facility simply anticipates the use of revenues from the sale in Ghana to power plants of lean natural gas to support financing.
“No natural gas would be sold to Chinese to facilitate the financing. Any excess lean gas which is not sold to power plants in Ghana would be dedicated to petrochemical industry development including fertilizer production to support Agriculture in Ghana. Any excess LPG or other natural gas liquids not used in Ghana can also be exported either to our neighbours or to any potential buyer.”
Jubilee field shut down normal
On claims that in 2017 gas supply from the Jubilee fieds will stop as the FSPO is expected to shut down for a period of six months the Ministry said the country has extra gas supply plants in place.
“In Ghana, gas supply is routed to our power plants through the gas plant in Atuabo. Gas Supply shutdowns are part of normal maintenance regimes on fields. Thanks to the hard work of the NDC Government, under the able leadership of President John Mahama, gas supply in 2017 will no more be from one field but from both the Jubilee and the TEN Field. Therefore, any shutdowns on one field would be substituted by Gas supply from the other field. Due to diligent planning, any shutdowns for maintenance on the Jubilee field would be more than compensated for by supply of gas from the TEN Field,” the statement added.
The Ministry further entreated Ghanaians to disregard the reports as they do not represent the facts.
“We once again assure Ghanaians that our offices are opened to all persons who genuinely seek information on the happenings in the sector.”
NPP may be ‘hallucinating’; Ghana has excess power
The Deputy Minister of Power, John Jinapor said the NPP was “hallucinating” and the claims had no basis.
The Deputy Minister of Power, John Jinapor
The Deputy Minister of Power, John Jinapor
“It’s simply hallucination; there is absolutely no basis for that,” he said on Eyewitness News.
We’ll mortgage Ghana’s gas to China but…
But Seth Terkper, the Minister of Finance who doubles as the acting Minister of Power confirmed the NPP’s claims but downplayed assertions that the deal has bleak implications for Ghana explaining that the gas being offered will be drawn from only one of Ghana’s three gas fields.
He indicated that it was “gas going to the Atuabo plant only under the GNPC. That is the only one we are talking about.”
Mr. Terkper also explained that this agreement was in line with government’s self-financing loan strategy following the negotiations with the CNB by a task force mandated to discuss the utilization of the $500 million remaining $1.5 billion of the $3 billion deal.
“The premise for the CDB facility, which is in tune with our self-financing loan strategy is that proceeds from any commercial project must be used to pay for any loans that are used to finance the project,” he said
“The payment was to be from revenue flows from crude oil which is sold on the international market at bench mark prices but crude oil prices fell and that source of financing the loan became inadequate,” Mr. Terkper noted in unison with the NPP’s narration.
He also explained that the strategy of self-financing loans was to avoid putting any burden tax payers.
“So we had indicated that once the processes start, there could be other source of financing repayment for the facility. That is the discussion that we are holding now, to see how we can use the proceeds from lean gas and from other gas sources to finance any infrastructure that is built and not put the load for such infrastructure on the tax payer and increase public debt.”