The $7-billion energy deal signed between Italian oil giant ENI and Vitol is “crucial” for Ghana’s future energy production, but will not have any immediate impact on the current energy crisis, locally christened ‘dumsor’, Chief Executive Officer of the Ghana Nation Petroleum Company (GNPC), Alex Mould has told Joy FM.
“This is a project that is going to last for 20 years, so in terms of security for supply of gas for power generation of electricity, this is a crucial project. It is not going to solve today’s ‘dumsor'”, Mr Mould said.
The $7-billion between ENI/Vitol deal was signed on Tuesday January 27, 2015 at the Peduase Lodge. It is expected to produce 1,200 Megawatts of power.
The deal with the Italian oil giant, ENI, will supply 180 million cubic feet of gas for power production.
Ghana is currently reeling under a gradually worsening power crisis, which state power transmitter Ghana Grid Company (GRIDco) has warned would get worse.
The country has a production shortfall of between 500 and 600 Megawatts due to Nigeria’s failure to supply gas to Ghana from the West Africa Gas Pipeline (WAGPco), to power thermal plants within the Tema enclave.
The low water level in the country’s main hydroelectric power station, Akosombo Dam, which contributes about 37 percent of Ghana’s power supply as well as in the Bui and Kpong Dams have also worsened the situation.
The ENI deal is therefore expected to supplant gas supply to Ghana for power production through Ghana’s thermal plants.
The sealing of the contract came after a government negotiating team made up of officials of the Ministry of Energy & Petroleum, Ministry of Finance, the Ghana National Petroleum Corporation (GNPC) and ENI Exploration, operators of the offshore Cape Three Points (OCTP) block, concluded talks to allow ENI commence production of gas.
President Mahama last week told Ghanaians in Germany while on a state visit that rather than relying on Nigeria’s unreliable gas supply, Ghana must focus on looking “at our own gas reserves and see how we can produce enough gas to be able to ensure energy security for Ghana,” since the country has a lot of gas potential.
Apart from the ENI deal, the President said: “We potentially can get a 150 standard cubic feet from the Jubilee Field. We are developing the TEN field, which will come on stream in 2016 and that again can provide us between 50 and 80 standard cubic feet.”
“…So going forward, we are looking at about 300 and 350 million standard cubic feet which will be very important in terms of generating power and ensuring energy security for us,” Mr Mahama said.