WAGP sinks under huge debt, low gas volumes

*West African Gas Pipeline.

*West African Gas Pipeline.

…Ghana’s VRA reportedly the biggest debtor

Oscarline Onwuemenyi

13 July 2016, Sweetcrude, Abuja – The multibillion-dollar regional natural gas transmission company, the West African Gas Pipeline Company (WAPCo) appears to be in troubled waters as it is currently being weighed down by a huge backlog of monies owed it by its customers for gas supplied to them, as well as a dip in gas volumes allocated to the company.

It also stated that it is now unable to undertake critical commercial operations because of these developments.

WAPCo’s Managing Director, Mr. Walt Perez, revealed during a meeting of the Committee of Ministers of the West African Gas Pipeline Authority (WAGP) yesterday in Abuja, that the company was in a serious operational mess due largely to these issues.

He explained that the company was in a precarious financial state and that its continued commercial survival was now in doubt.

According to him, unless member countries take urgent steps to salvage the operations of the company, their investments in the venture may have to go down the drain in a matter of time.

Perez also said the company’s cash flow was dwindling from these developments.

He called on the ministers to come up with solutions to keep the company up. He said WAGP had for a while remained technically capable of transporting gas volumes up to contractual levels, but that many receipts have within these times remained below contracted levels and have now built up to put the commercial viability of WAGP in significant doubt.

He stated that the problem with low gas volumes was exacerbated by a force majeure that was declared in 2013 and which still remains in effect today.

He said as long as the direct and indirect effects of low volumes and force majeure persist, WAPCo’s business planning and immediate prospect for growth in the foreseeable future would not materialise unless these conditions change.

Elaborating on the huge debts owed the company and which has contributed to its troubling cash flow, Perez said since August 2014, WAPCo had not received full and consistent payments for gas delivered to its biggest customer, Ghana’s Volta River Authority (VRA).

He said this development has seen the company’s unpaid invoices shoot up to $104 million that is due to WAPCo’s account, plus an additional $75 million to N-Gas.

“It is an occasion, I believe, for us to be accountable for all those interests and assets entrusted to our care. I see this as an occasion to reflect on the demands and problems WAPCo faces.

Nigeria, through the Nigerian National Petroleum Corporation (NNPC), has a 24.9 percent stake in WAPCo, and is the second largest shareholder after Chevron West African Gas Pipeline Limited with 36.9 per cent.

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