The Government of Ghana from October 2018 began the monthly payment of $40 million to ENI Ghana, as a result of the country’s failure to build appropriate infrastructure to off-take gas from Offshore Cape Three Point (OCTP)

OCTP, operated by Eni Ghana, commenced operations in mid-2018, and has an agreement to produce the lean gas for onward off-take by the government of Ghana for the use of thermal plants.

The OCTP is operated by Eni Ghana as the lead operator with a 44.44 percent interest, along with its partners Vitol Ghana with 35.56 percent, the National Oil Company (GNPC) with 20 percent.

Between the operators and Ghana, before the gas hit the shore, it requires infrastructure (pipeline) to transport the gas from the wellhead, through processing units and the delivery of the agreed volume to the off-taker (Ghana) for thermal energy generation.

Unlike crude oil and Liquefied Petroleum Gas (LPG) which can be stored and could be transported to the international market, lean gas is not.

Therefore in developing a natural gas field, the investors (OCTP Partners) had to be assured of a ready off-taker (Ghana), a ready market and guaranteed repayment.

Such infrastructure per the industry standard, should have been ready and pre-commissioned one clear year before the completion of the development and production of the Sankofa gas field.

However, since gas production begun at the Sankofa field, the country has not been able to take the volumes of gas delivered to the shore by the partners, triggering off the Take-or-Pay clause in the OCTP oil contract.

The investment of more than $7-billion into the development of OCTP, which is a heavy, gas concentrated field project touted as a great relief-to-be for the country’s challenged power sector, was occasioned by Ghana.

In 2015, the Government of Ghana under then President John Dramani Mahama, signed the deal with the Italian oil giant, ENI and partners for the production of about 180 million cubic feet of gas.

Ghana was expected to prepare adequately to receive and utilize the gas manufactured by ENI or pay for the agreed volume of gas even when the country is unable to consume it all.

As it stands now, Ghana will continue paying $40 million every month until we put in place the necessary pipes and infrastructure to transport the gas to the shore and for usage.