Genser Energy
The Ghana National Petroleum Corporation (GNPC) finds itself in a tight corner. Confidential documents show that the independent power producer, Genser Energy, is proposing to split an existing gas sales agreement (GSA) to address public misrepresentation of the deal as it has been unfairly accused of fleecing the state.
Accra-based policy think tanks – the Africa Center for Energy Policy (ACEP) and IMANI – have been launching calculated media onslaughts on Genser Energy, describing the agreement between GNPC and Genser as a “sweetheart deal” that is milking the nation.
They accuse Genser Energy of getting a lower fixed gas rate of just US$2.79 per mmBTU (a unit of energy measurement) for the natural gas it receives from the national oil company.
“Genser’s negotiated gas rate with GNPC is completely mindboggling in a country where the energy regulators assume an average cost of gas of $6.08 per mmBTU when setting tariffs for electricity pricing. In fact, actual gas pricing on the market for various power plant operators (or the government, depending on circumstances) is often higher than this,” the two think tanks published recently.
But if the think tanks understood how gas deals worked, they probably would be in the gas business.
Sources familiar with the agreement have told the Ghanaian Observer that the price stated in the current GNPC and Genser gas sales agreement includes offsets for other strategic services Genser is providing for GNPC.
For instance, GNPC does not have pipelines to transport gas from a place like Prestea, so it resorts to that of Genser to reserve its capacity for public goods.
To avoid any confusion and public mudslinging, The Ghanaian Observer has intercepted a letter from Genser Energy dated 25 July 2023 and addressed to the CEO of GNPC, Opoku Ahweneeh-Danquah. It seeks to split the current deal into a standard gas sales agreement and a separate gas transportation agreement.
The request for transparency means GNPC would have to pay standardized WAPCO rates for using Genser Energy’s pipelines to transport gas to power plants such as Ameri. Genser would also increase payment to GNPC by paying the market price based on PURC rates to avoid any misrepresentation by non-parties to the GSA.
Officials of Genser Energy and GNPC did not respond to emails about the letter.
The letter titled: “Proposal to split the combined GNPC GSA into: (I) a standard gas sales agreement and (II) a separate gas transportation agreement”, was copied to the Energy Minister, Dr Mathew Opoku Prempeh and the Speaker of Parliament, Alban Bagbin.
Below are details of the letter in possession of The Ghanaian Observer:
Gegl Moe_ Proposed Split of Gnpc Gsa 20230726 by Fred Dzakpata on Scribd
