Ghana gas blows $1bn on Atuabo

• Posted on December 23, 2014December 23, 2014
• by Nana Kwesi Coomson
• Comment

Contrary to the impression created by the Ghana National Gas Company (GNGC) Limited that it used between $700 million and $800 million to construct the Atuabo Gas Processing Plant, it has now emerged that it actually spent over $1 billion on the project.

Ghana Gas made the revelation via a press release in reaction to the recent statement by Minority spokesperson on Energy, KT Hammond in the media that the project cost had been bloated.

It stated that “the budgeted cost of the Ghana Gas project is $1,000,000,000.00.”

The press release signed by Alfred Ogbamey, Corporate Communications Manager of Ghana Gas, described Mr KT Hammond’s allegations as a deliberate misinterpretation of latter’s documents in his custody.

But according to Mr Hammond, documents revealed that Ghana Gas had ballooned the project cost by close to GH¢600 million.

“A document supplied by Ghana Gas suggests that they have expended as much as $1.3 billion on this project… That project is absolutely bloated.”

He further alleged that documents from a group of five people, including the CEO who were in charge of Ghana Gas suggested that about $1.3 billion had been expended on the project.

“I am talking about the group of five who are in charge. Five members of the board, there is the Chief Executive who is also a member of the board.”

Explaining why he arrived at the $1.3 billion, Mr Hammond said the agreed interest rate on the contracted sum amounted to $300 million and therefore if that was added to the loan amount of $1 billion, the asset cost of the project amounted to $1.3 billion.

“This does not mean the cost incurred on the project to-date is $1.3 billion, because at the end of the project, repayment of the principal loan and interest will be made on the actual amount expended. Currently, the amount disbursed on the project stands at $728 million.”

It would be recalled that the commissioning of the Atuabo Gas Project by the Ghana Gas was stalled as a result of some challenges cited by the Volta River Authority (VRA) and hitches at FPSO Kwame Nkrumah vessel.

The VRA mentioned the lack of adequate functioning generating units at its enclave in Aboadze and compressor trippings on the FPSO as some setbacks to the scheduled commissioning.

 By Samuel Boadi