The indebtedness of Ghana National Gas Company (GNGC) to Ghana National Petroleum Commission (GNPC) increased by 56.19 per cent in June 2021 on a year-on-year basis, as evidenced in the Public Interest Accountability Commission’s semi-Annual Report.
This represents an increase from US$393,042,132.35 as at June 2020 to US$613,910,025.21 in June 2021, attributable to Volta River Authority’s (VRA’s) inability to meet its debt service obligation.
Accordingly, the total volume of raw gas sales to GNGC by GNPC amounted to 19,868,900 MMTBu in June 2021 compared with 10,920,275.49MMTBu in June 2020. This translates into an increase of 81.95 per cent, the report noted.
Revenues accumulated by GNGC over the period
On the revenue side, the total indebtedness to GNPC stood at US$110.75 million compared to US$62.31 million for the same period in 2020. Particular to GNGC’s expenditure over the period under consideration, total expenditure amounted to GHS909,799,000.
According to the report, at end-June, 2021, a total of US$78,297,090.93 out of US$167,878,774.46 had been received by GNGC from the sale of Liquefied petroleum gas (LPG), Lean Gas and Stabilised Condensates as well as payment under the Cash Waterfall Mechanism (CWM).
Cumulatively, the volume of Lean Gas, LPG and Condensates processed during the period were 17,928.01MMScf, 54,546.51M3 and 16,819.17M3 respectively.
Consequently, the total outstanding receivables due GNGC was US$932,379,759.17 at the end of the period. Meanwhile, the report reveals that the volumes and cost of raw gas received from GNPC over the period have been quite erratic than anticipated.
Additionally, pass through direct cost, a cost to which no element of overhead, administrative expenses or profit is added, constituted the highest expenditure item of GHS674,306,000. Also, expenditure incurred due to Directors’ Fees and Other Board Expenses was the least amount GHS167,000 over the period.
The report also touched on the government’s consideration for GNGC to become an integrated gas company through the consolidation of midstream gas services (i.e. aggregation, shipping and operation).
Progress of GNGC National Gas Aggregator Role
As at the time of reporting, the government’s own established Ministerial Gas Taskforce, with the mandate to ensure a roadmap is developed had not reported any progress action for more than a year now.
Aside this, one of the critical areas that has sparked several consternations among a section of CSOs is the National Gas Aggregator role of GNGC.
As a sequel, the PIAC’s recommendation was that, “GNPC cannot novate its Joint Venture Partnership in any of these fields to GNGC without the consent of the other Partners, as the Gas Company is not a Party to any of these Agreements.”
This fact notwithstanding, the PIAC noted that should it happen, the GNGC’s role as the National Gas Aggregator become fully established, GNGC will qualify as a National Oil Company in addition to GNPC as defined in the Petroleum Revenue Management Act (PRMA).
PIAC further suggested that assuming the role of a National Oil Company, GNGC will be expected to make statutory payments into the Petroleum Heritage Fund (PHF) as well as receive allocations from it to finance its operations.
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