Gas challenges hold back Asogli phase 2

The Sunon Asogli Power Company has said that it is ready to roll-out the second phase of its power project, involving some 360megawatts -- except that a gas supply agreement is yet to be finalised.

“So once the gas-fuel agreement for the project is settled, the Phase 2 project is expected to start as early as possible; and it is the plan for Shenzhen Energy Group to complete the engineering and then put the power plant into commercial operation within approximately 12-18 months,” the company told the Energy and Petroleum Minister Emmanuel Armah Kofi Buah in China recently.

The first phase of the solely-gas-reliant project (200megawatts), completed and put to use since October 2010, has been bogged down by the erratic supply of gas from Nigeria, and so for the second phase, the company is hoping to rely on Ghana’s own gas, a processing plant for which is yet to be completed.

The company told Energy Minister, Emmanuel Armah Kofi Buah, in China recently that it lost approximately US$15million due to the interruption in gas supply from Nigeria from August 2012 to July 2013.

“As an IPP, 10 months gas-fuel supply interruption and defaulting in payment of power generation has placed the power plant in financial and operating trouble, which is not helpful in strengthening the confidence of our shareholders to continuously invest in Phase 2 of the project and other following power projects.”

In spite of the challenges, however, the company said plans are far advanced for commencement of the 360megawatts second phase.

The feasibility study for the project, it said, has been completed; and financing proposals for the project is in process.

“Approximately 40% of key equipment of this project, including one set of gas turbine, steam turbine and its generators, are held in hand and are ready to ship to Ghana.

The indicative tariff for the project has been approved by PURC of Ghana in November, 2013 and the PPA agreement with ECG for the project was approved and formally signed by both parties in December 2013.

The Energy Minister, on his part, assured the company that his outfit will do all in its power to secure the supply of natural gas to Sunon Asogli Power.

“The Ministry of Energy of Ghana intends to use its best efforts to secure natural gas from Nigeria through the West African Gas Pipeline to be supplied to Sunon Asogli as the first customer, in order to satisfy the need of the production of Sunon Asogli’s Phase I and Phase II project,” he said.

Approximately 2,240GWh of power per year will be added to the national grid if the second phase of the project comes on board.

B&FT Online | Ghana