Ghana’s VRA is WAPCo’s biggest debtor – MD

20 July 2016, Sweetcrude, Abuja – Managing Director of the West African Gas Pipeline Company, WAPCo, Mr. Walt Perez, has revealed that the company was in a serious operational mess due to 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.

Oil pipelines

Oil pipelines

Perez made this known during a meeting of the Committee of Ministers of the West African Gas Pipeline Authority, WAGP, in Abuja, saying since August 2014, WAPCo had not received full and consistent payments for gas delivered to its biggest customer, Ghana’s Volta River Authority

He stated that the the multibillion-dollar regional natural gas transmission company is now unable to undertake critical commercial operations because of the huge debts by its customers and that the company’s 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 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,” he told the meeting.

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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