N-Gas Limited has officially informed the Volta River Authority (VRA) of its decision to suspend gas supply to Ghana due to outstanding arrears.
- N-Gas Limited has informed VRA about the suspension of gas supply to Ghana due to outstanding arrears
- The suspension is in accordance with Clause 13.6(a) of the Takoradi Gas Sales Agreement, which allows for supply suspension if payment obligations are not met
- The impending suspension of gas supply raises concerns over Ghana’s energy security and could impact power generation
In a letter addressed to the Managing Director of VRA on Tuesday, 18 February 2025, the company stated that effective 6 March 2025, it would cease further gas deliveries in accordance with Clause 13.6(a) of the Takoradi Gas Sales Agreement.
This clause permits the suspension of supply if the buyer fails to meet its payment obligations. The notification underscores the urgency for the VRA to address its financial commitments to avoid disruptions in energy supply.
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The letter also indicated that N-Gas is committed to upholding the integrity of contracts across the value chain. As a result, the company may require VRA to make a one-month prepayment as a condition for the continued supply of gas.
“To ensure the sanctity of contracts across the value chain, N-Gas may demand one month of prepayment from VRA for continued gas supply,” the letter stated, reinforcing the company’s firm stance on financial commitments.
Potential energy crisis in Ghana
The impending suspension of gas supply raises concerns over Ghana’s energy security, as it could significantly impact power generation.
The VRA, which heavily relies on N-Gas to fuel its thermal power plants, may need to explore alternative sources of gas to prevent disruptions in electricity supply.
Background on N-Gas and Its Role
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N-Gas Limited, a key supplier of natural gas to Ghana, transports gas to the VRA through the West African Gas Pipeline Company (WAPCo).
The ongoing financial challenges between N-Gas and VRA highlight the broader issue of energy sector funding in Ghana, which could affect both businesses and households if left unresolved.
Urgent Need for Resolution
With the suspension deadline approaching, stakeholders in Ghana’s energy sector must act swiftly to address the arrears and ensure continued gas supply. Failure to meet N-Gas’s demands could lead to power shortages, affecting industries, businesses, and households nationwide.
