SINOPEC Threatens to Pull Out of Ghana Gas Project

SINOPEC lead contractors for the Ghana gas project have threatened to pull out of the project if funds are not disbursed anytime soon.

Provision of funds for the project has been halted due to delays in the disbursement of the 3 billion China Development Bank (CDB) loan.

As at last month government had only received $200 million out of the total $3 billion it applied for.

The $1.2 billion gas processing plant when completed will prevent the flaring of gas from the Jubilee oil fields.

Citi Business News has gathered early this week SINOPEC threatened a walkout for the second time over funds-settlement issues.

CEO of the Ghana National Gas Company (GNGC) Dr George Sipa Yankey tells Citi Business News the gas company is still in negotiations with SINOPEC to discard its threats.

“The project was suspended in September and it did not resume until November, by which time the companies which were placing orders for long lead items had lost their purchasing slot, so by the time we got the money, they had to start all over again.”

“This time round, we are still experiencing some slow disbursement and we are trying to solve the problem.”

“The President sent a team to China to discuss the issue of CDB and they’ve come back.”

“We are still in the resolution stage now and we have had some warnings from SINOPEC that in the event of further delays of payment, then they will not be able to proceed any further,” Dr. Sepa Yankey said.

“But we are hoping that we can forestall that happening because they are working and they have to be paid.”

Dr George Sipa Yankey is optimistic the company will meet its deadline for the project.

“Some work is being done by the ministry of finance to deal with that so we are very hopeful that that will happen and then the project can continue and if continues without any break, certainly before the end of this year, Ghana gas should start commercial operations.”

“They are working; they wanted to suspend work this week, but after discussions with them they are working and we hope they can resolve it quickly before they suspend work again,” he said.

Meanwhile GNGC has hinted to Citi Business News it will be listed on the Ghana Stock Exchange by the year 2018.

Dr George Sipa Yankey said the company is likely to go on the Bourse within the first three to five years after commencement of operations.

(citifmonline.com, Edited by Topco)