Rosneft new LNG deal not transparent – industry expert
Adnan Adams Mohammed
The Ghana National Petroleum Corporation
(GNPC), last week, signed a new gas sale and purchase agreement (GSA) deal with
Rosneft for the same natural gas supply agreement it had with Gazprom in
September last year.
This means that, Gazprom has been dropped
by GNPC for Rosneft.
Gazprom has more capacity and capability
in all regards than Rosneft, and it is therefore a surprise to energy experts
for government to take this decision.
However, a statement from GNPC announcing
the new deal with Rosneft said, “due to a corporate restructuring, Gazprom’s
supply obligations had been assumed by Rosneft.”
But, Mr Alexander Mould, former GNPC boss,
has questioned the transparency and adequate and relevant contract information
disclosure of the newly signed deal.
This is because, the statement from GNPC
did not specify the details of whether GNPC will be losing in terms of
compensation to Gazprom, whether the abrogation of Gazprom was by a consensus
or forced and whether Rosneft has a direct link or dealing with Gazprom which
would mean Gazprom would not be losing in anything from the initial contract
abrogation. Mr Mould is therefore demanding further clarification from GNPC to
show adequate transparency of the deal.
However, to assess the cost effectiveness of the Rosneft contract,
the industry expert wants to know, what will be the cost of the LNG landed in
Tema and what will be the cost of the regasification, that is, throughput cost?
Also, it is important to know the deadline for the LNG
regasification plant to become operational, given that, the country is already
receiving 100mmscF/day from natural gas (at about US$6-7/mBTU) and Jubilee/TEN
can deliver another 120mmSCF/day and when SGN comes on stream in July, they
will produce 170mmSCF, in all, there will be a supply of almost 400mmSCF/day,
enough to power 1500-2000MW plants (single cycle - combined cycle).
Mr Mould, asked how soon the Floating Storage Regasification
Unit (FRSU) will be in the country, replied that “this will depend on whether
it is going to be newly built or the company has one that can be mobilized as
soon as possible.”
“Where in Tema port will it be located and will its location affect current port activities?” he queried.
Another important element of the new contract which needs to be answered by the contract partners is; who the promoter for this increased infrastructure, is it GPHA or GNPC?
Additionally, it is important to note whether other infrastructures would have to be built to connect to all the power plants in Tema. And whether, the WAPCO pipeline is going to be used as part of the distribution network for the regasified LNG.
“When is the reverse flow, West to East (W2E), to be completed with compression capability? This has already been captured in GNPC 2018 budget at an estimated amount of US$120 million. How much gas (in mmSCF/day) will be able to flow from W2E?” he quizzed.
The GNPC statement indicated that, it has
struck a 12-year natural gas supply deal with Rosneft, a Russian integrated
energy company. The deal is seen an opportunity for increased investment in
Ghana’s oil and gas sector.
Under the agreement, Rosneft would deliver 250 million cubic feet of liquefied natural gas (LNG) to a re-gasification terminal at the Tema Port, to be processed and carried to the GNPC’s Tema Metering Station.
Under the agreement, Rosneft would deliver 250 million cubic feet of liquefied natural gas (LNG) to a re-gasification terminal at the Tema Port, to be processed and carried to the GNPC’s Tema Metering Station.
The signing event took place at the
sidelines of the just ended 26th St. Petersburg International Economic Forum –
an annual Russian business event, held in St. Petersburg.
Mr. Frederick Blay, the GNPC Board Chairman, and Igor Ivanovich Sechin, Chief Executive Officer (CEO) and Chairman of the Management Board of Rosneft, initialled the agreement for their respective companies.
The deal is expected to place Ghana at the centre of West Africa’s rapidly growing energy market – provide job openings and building local capacity.
The statement added that the two companies also agreed to deepen their cooperation in the development of the upstream and downstream sectors.
Mr. Blay expressed optimism that through “this strong cooperation, Ghana can also act as a gateway for Russian investment within the wider West African region”.
Notably, Mr Sechin said it was the beginning of a new phase of the development cooperation between Russia and Ghana.
“Ghana has placed itself among dynamically developing world economies with the energy demand growing year on year,” he stated.
Dr. Kofi Kodua Sarpong, CEO of GNPC is quoted as saying, “we are happy to be working with Rosneft on this LNG transaction and already the two parties are looking at greater cooperation and partnership in the upstream sector”.
Mr. Frederick Blay, the GNPC Board Chairman, and Igor Ivanovich Sechin, Chief Executive Officer (CEO) and Chairman of the Management Board of Rosneft, initialled the agreement for their respective companies.
The deal is expected to place Ghana at the centre of West Africa’s rapidly growing energy market – provide job openings and building local capacity.
The statement added that the two companies also agreed to deepen their cooperation in the development of the upstream and downstream sectors.
Mr. Blay expressed optimism that through “this strong cooperation, Ghana can also act as a gateway for Russian investment within the wider West African region”.
Notably, Mr Sechin said it was the beginning of a new phase of the development cooperation between Russia and Ghana.
“Ghana has placed itself among dynamically developing world economies with the energy demand growing year on year,” he stated.
Dr. Kofi Kodua Sarpong, CEO of GNPC is quoted as saying, “we are happy to be working with Rosneft on this LNG transaction and already the two parties are looking at greater cooperation and partnership in the upstream sector”.
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