Nigeria Pays $10m to Ghana for Failure to Meet Gas Supply Agreement


By Chika Amanze-Nwachuku with agency report

The federal government has paid $10 million to Ghana as compensation for Nigeria’s failure to meet the gas supply agreement it entered with the latter.

Under the agreement signed in 1999, Nigeria was required to supply Ghana a total of 123 million Metric British Thermal Units (MMBtu) of gas per day.

However, Nigeria was said to have failed to meet the target, supplying only 30 MMBtu per day and sometimes less.
The Director of Planning and Business Development of the Volta River Authority (VRA), Kofi Ellis, told TV3’s, Sandra Amarquaye, at the weekend that Ghana had been paid $10 million as damages by Nigeria over the shortfall as stipulated in the gas supply contract.

“The contract already stipulates some liquidated damages for reduction in supply,” Ghanaweb quoted Ellis to have said.
“I know that already we have been paid some damages for the reduction in supply,” he added.

A recent visit of the Ghanian Minister of Energy and Petroleum, Emmanuel Armah-Kofi Buah, to Nigeria culminated in West Africa’s biggest gas-supply nation promising to supply a constant 50 MMBtu/day.

Ellis noted the intervention by Nigerian government, admitting that inasmuch as Nigeria would want to help Ghana, it is also facing challenges.

“I guess the Nigerians also share in our problems. They understand. The unfortunate thing is that this is a commodity that both countries need for themselves. So it is a matter of trying to see how best you can help your neighbour,” he said.
He however said the contract would not be abrogated notwithstanding that Nigeria is facing challenges in meeting the terms.

The recent below-expectation supply of gas from Nigeria has been cited as one of the causes of challenges in the energy sector. Power shortage has been on the rise in Ghana as hopes to solve its electricity woes by producing natural gas to power electricity plants had been held back by the loss of a shipment of materials and delays in paying contractors.

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