The West African Gas Pipeline (WAGP) was designed to take gas from Escravos in Nigeria to Benin, Togo, and Ghana. Now, Ghana has discovered crude oil. Do you think discovery in Ghana is a threat to your operations?
Yes. You know we have challenges and in fact, the requirements for gas in Nigeria was also a threat. So the important thing is to be proactive and make the company relevant. That’s why we have this western interconnection for example. Because we have our government relations people with their intelligence work. We knew Ghana was going to transport the gas from the west to the east. You need money to build the pipeline, so we went to them and explained that since this pipeline exists, why build new one when you can use our own. They took that onboard and at a time when we had this discussion, we didn’t even have this money to invest. We discussed with them and another party made the investment. That project is going on right now.
Besides, there is a threat of Liquefied Natural Gas (LNG). In Benin, they are seriously considering LNG and we are trying to make it very attracting to them. Even if they are doing LNG, they can tie it into WAGP because it is already in existence. Challenges will always exist, but make sure you are conscious of it and find how you can fit into the industry and make the pipeline more relevant.
Can you explain the controversy that surrounds gas tariff?
You when we started, it was just gas from Nigeria that is being delivered to Benin, Togo and Ghana. At that time, gas was cheap and it was considered to be just one product being sold at same price to all customers. The cost of the product was quite low. What has happened is that cost of gas has gone up and we were told that those buying the gas, let’s say in Nigeria, were paying something higher than what they were paying before. And because that was subject to an agreement, that is, everything was signed on what would be done.
Right now, we have other shippers coming in and any additional gas coming into the pipeline is not going to be as lowly priced as the previous one. There is an arrangement for a review of a tariff every five years. There was one gas supplier as at the time of last review.
Subsequently, we have other shippers. I must say the controversy is Ghana’s gas from the west to the East of Ghana which is based on different negotiation for the tariff. We already have the price for the gas coming from Nigeria into Ghana. Because we have other shippers, we cannot afford to have low tariff for one shipper and higher tariff for another shipper. At the same time, you want to make sure you make enough money to honour your obligations. The average tariff should be on a level that will make it possible for you to meet your obligations. So we are in a tariff discussion phase right now. We want a tariff that will be competitive and acceptable for other shippers.
How do you address the problems of sand miners?
I’m happy to say that sand mining problem right now has been resolved. That is because we have the support of state authorities in the Marine Police. For sometimes now, we have not have any experience of sand mining. It is happening in other areas but not on our right of way.
We have arrangements with maritime authorities. There is a standing committee formed about two years ago with naval officers from the WAGP countries including Nigeria, Benin, Togo and Ghana and other relevant agencies. They navy authorities in various countries have taken up the responsibilities to safeguard the waters. The largest tranche of the onshore pipeline is in Nigeria and we are in partnership with our host communities. They help us with surveillance and they report sometimes if our pipeline is exposed maybe through erosion. That’s why we make it a point to honour our corporate social responsibility so that they will realize that we are into partnership. We take this Livelihood and Skills Acquisition scholarship very seriously.
Even those days we have financial challenges, we still continue with the scholarship scheme. Although, in a year when it was so terrible, we didn’t take in new beneficiaries but we continued working with all those who are still there.