A former CEO of the Ghana National Petroleum Corporation (GNPC), Mr Alex Mould, has described as false, claims by President Nana Akufo-Addo that US$170 million was saved for switching from HFO to natural gas from Ghana’s Eni-operated Sankofa Gye Nyame (SGN) oilfield as fuel for the Karpowership.

Mr Alex Mould, who was part of the initial arrangement for the Karpowership Purchase Agreement and the fixing of the pricing of the gas from the SGN field, explained that the initial HFO fuel which was being used by the Karpowership is almost as cheap as the Eni Ghana gas it is now using from the Aboadzi Ghana Gas station.

President Akufo-Addo, last week, turned on the valves of the Karpowership for the use of natural gas from the country’s gas fields to power the 450-megawatt plant, which was brought in to augment power generation for the nation by former President John Mahama.

This follows the relocation of the Karpower barge from Tema to its original location – Sekondi Naval Base, Western Region – as envisioned, according to Mr Mould, by the Mahama-led government and the subsequent conversion of 90% of its engines from being initially dependent on HFO to natural gas.

According to the Ministry of Energy, this will save Ghana a monthly take-or-pay cost of US$40 million and projected annual savings of US$480 million. It added that the switch to natural gas would save electricity users an amount of US$170.5 million per year, and a projected amount of US$1.2 billion over the remaining term of the contract, by way of reduced electricity charges to consumers.

However, Mr Mould has said: “The savings numbers are fabricated, US$170 million savings a year for Karpower who’s HFO is almost as cheap as the Eni Ghana Gas”.

He added: “The movement of the barge in the first place was not an economic decision but a practical one.”

In an interview, Mr Mould explained how the prolonged delay in relocating the power barge to the Senkondi power enclave, as against the initial arrangement which the former administration handed over to the Akufo-Addo government, had cost financial losses to the state.

“The whole issue is that GNPC/Ghana Natural Gas Company (GNGC) have not been able to resolve the reverse flow in a timely manner to be able to pump compressed gas to Tema enclave from Aboadzi.

“We currently are pumping less than 60mmSCF to Tema, and as such, the offtake from the gas fields falls below the 220-280mmSCF we should be lifting: 80 to 110 mmSCF from Atuabo (Jubilee and TEN) and 140 to 170 mmSCF from SGN.

“As such, Ghana has been saddled with a take-or-pay bill, which could only be resolved by an expedited offtake, hence the necessity for Karpowership relocation.”

Mr Mould said there were two 225MW barges that ECG agreed to bring into the country for emergency purposes in the initial agreement with the Karpower owners.

“GNPC supported ECG in 2014 because we wanted the barges to use Gas from the Eni Ghana SGN field to satisfy one of the World Bank’s conditions of providing the financial guarantee for the development and production of the SGN field.

“This was captured in Parliamentary discussions as reasons for approving GNPC in 2015 to provide guarantees to Karpower on behalf of ECG”, he disclosed.

The former GNPC CEO said the first barge arrived in December 2015 and the second was to arrive in 2017 and was to be taken to Takoradi for use by Eni Gas.

“However, the Mahama government realised that it would not be economical to have two barges – one in Tema and one in Takoradi using gas – so, it agreed to rather have one barge, a 450MW barge, and this would be sent to Takoradi,” he said, adding that this was agreed with the World Bank in 2016 and “I even went to inspect the construction site in 2016”.

“When the barge arrived, the gas logistics (pipeline and grid connection) was not ready, so,a it was agreed that the barge would be situated in Tema till GRIDCo and Ghana Gas got their act together – they needed funding which GNPC was prepared to offer assistance since it was the gas aggregator and for that matter the biggest benefactor if the Karpowership is to use the natural gas.

“Unfortunately, some challenges occurred between GNPC and Ghana Gas in 2017 and 2018 which delayed funding of the relocation project.

“GNPC diverted funds to bail out BOST rather than to fund two pipeline projects – WAPCO reverse glow and the Karpower Aboadzi – Sekondi pipeline connectivity.”

Mr Mould said this caused the delay in the relocation timeline, thereby leading to less gas off-taking from the Ghana Gas station at Aboadzi, which had to result to flaring of gas.

“This had economic and environmental impact on the economy.”