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19.06.2013 Feature Article

The Daily Daily Graphic Reports "Gas Project In Limbo"- Recall "Ghana Gas Project Is 33% Complete – IMANI Report"

The Daily Daily Graphic Reports
LISTEN JUN 19, 2013

Dear friends, this piece of news is not from IMANI . The State-owned Newspaper, The Daily Graphic reports TODAY, JUNE 19TH 2013 that the Ghana Gas Project which IMANI reported was 33% complete and adviced urgent critical steps is in "LIMBO".

If you will recall, the Minister of Energy called IMANI's field report on the Gas Corridor "SHAMEFUL" and said 50% of work had been done. The Minister told the President to say 80% of work had been done . Then the Minister together with the CEO of Ghana Gas said 60% of work had been done, all within three days and that they were on schedule. Now the Daily Graphic has also visited the gas corridor and is reporting among others,

1. Work on the multi-million dollar gas plant being built at Atuabo in the Western Region has stalled due to lack of funds to pay contractors working on the project.

2.At the moment, the government, through the Ghana National Gas Company (Ghana Gas), owes the main contractor, Sinopec, more than $400 million. (WERE WE NOT TOLD SOME $200M HAD BEEN RELEASED LAST APRIL?)

3.The sources told the Daily Graphic that the post-offshore survey vessel left after several postponements of the dates the main contractor promised to pay.

4. The delay and other unplanned activities, the sources said, were likely to increase the cost of the project, which was initially estimated at $750 million.

5. But, the departure of the post-survey vessel, according to the Chief Executive Officer (CEO) of Ghana Gas, is not good news as the gas cannot be shipped to the plant if the post-survey is not carried out. 'There is, therefore, the urgent need for the funds to be made available to the main contractor to settle the arrears for the vessel to return for the completion of the work,' he said.

Below are three paragraphs of IMANI's Initial Report on the Gas Project:

a.In this initial report we make what we believe will become an interesting point of debate: that the overall project is 33% complete if the end point is safe commercial delivery of processed gas from Atuabo to the power-plant in Aboadze, and transport of LPG from the same site to Domunli for onward evacuation to Accra by sea vessels.

b. At the current rate of completion we believe the project will be ready to deliver gas for power production in Ghana sometime in early 2014. The project may still be fast-tracked for completion by end of 2013 if the flow of funds were to be assured for any such acceleration. However, there is a hard limitation on the ability of Ghana Gas to accelerate ongoing project execution: the gas processing modules themselves, currently being built by a Canadian company.

c. So in addition to actual construction work, Ghana Gas has its work cut out for it on the strategic and business modelling front too. This is on top of the financing anxieties associated with the slow disbursement of the CDB loan. We do not doubt the energy, confidence, and enthusiasm of the leadership and frontline supervising engineers of Ghana Gas to keep their contractors on their toes, but as if to signal how much work remains to be done.

Editor's Note:
See the Daily Graphic Story @
Recall IMANI's earlier field report @
Let us all help salvage the Ghana Gas Project. It begins however with humility from the project managers.

Franklin Cudjoe
Franklin Cudjoe, © 2013

The author has 121 publications published on Modern Ghana.Column: FranklinCudjoe

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