WEST AFRICAN GAS PIPELINE AUTHORITY PRESENTATION

Transcription

1 BENIN GHANA NIGERIA TOGO NARUC/NERC GAS-TO-POWER WORKSHOP, LAGOS, NOVEMBER 2012 WEST AFRICAN GAS PIPELINE AUTHORITY PRESENTATION By: Kodjo PEDASSOU Director, Environnent, Safety & External Relations

2 OUTLINE OF THE PRESENTATION 1. INTRODUCTION TO WAGPA 2. WEST AFRICAN GAS PIPELINE (WAGP) 3. GAS-TO-POWER CUSTOMERS 4. TARIFF SETTING 5. WAGPA FUNDING 6. WAY FORWARD

3 1. INTRODUCTION TO WAGPA Establishment: WAGPA is an international institution with legal personality and financial autonomy established by the WAGP Treaty signed on 31 st January 2003 by the heads of the States Parties (Benin, Ghana, Nigeria and Togo) and witnessed by ECOWAS Commission Functions : representation, facilitation and regulatory Organizational structure: Committee of Ministers, Board of Governors and Director General Location of corporate office: Abuja (10, Zambezi Crescent, WAEC Building, 4 th floor, Maitama)

4 2. WEST AFRICAN GAS PIPELINE (WAGP) Purpose: transport Natural Gas from Nigeria to Benin, Togo and Ghana for power plants companies and heat-using industries Length : 681 km of which 56 km of 30 pipeline from Itoki to Lagos beach; 569 km of 20 offshore pipeline from Lagos to Takoradi, Ghana Mali Burkina Faso Niger Delivery points: Cotonou (Benin Rep.), Lome (Togo), Tema & Takoradi (Ghana) GHANA T O G O B E N I N NIGERIA Pipeline Capacity : Initial (2 compressors) 170 MMscf/day & Final (6 compressors) 474 MMscf /day Takoradi Tema Lomé Cotonou Lagos Escravos Operating Pressure: Barg under free flow & Barg when fully operational with full compression

5 2. WEST AFRICAN GAS PIPELINE (WAGP) (Continued) Stakeholders (four States Parties, WAPCo, Buyers and Shippers) The four States Parties : The Republic of Bénin The Republic of Ghana The Federal Republic of Nigeria The Republic of Togo West African Gas Pipeline Company (WAPCo) Shareholders: Chevron (36.9%), NNPC (24.9%), Shell (17.9%), VRA (16.3%), Bengaz (2%) & Sotogaz (2%) Buyers: Volta River Authority (VRA) and Communauté Electrique du Bénin (CEB) VRA (Ghana): 123,212 MMBtu/d i.e. 600 MW CEB (Bénin and Togo) : 5,200 MMBtu/d i.e. 25 MW for each country Shippers (N-Gas)

6 2. WEST AFRICAN GAS PIPELINE (WAGP) (Continued) Some key dates 1982: The Economic Community of West African States (ECOWAS) proposed a Natural Gas Pipeline across West Africa as a key Regional Economic Goal 1995: The Heads of States of Benin, Ghana, Nigeria and Togo signed Agreement for the Development of the WAGP based on Private Investment and Commercial Principles January 2003: The Heads of the four States Parties signed the WAGP Treaty May 2003: Formation of the West African Gas Pipeline Company limited (WAPCo) May 2003: Signing on BOO basis of International Project Agreement (IPA) by WAPCo and the Governments of the four States Parties with ECOWAS Secretariat as Witness October 2004: Ratification of WAGP Treaty by the four States Parties March-April 2005: final EIA Permits granted by Environmental Authorities in Benin, Ghana, Nigeria and Togo April 2005: Pipeline License to construct pipeline granted to WAPCo by the 4 States Parties August 2005: Commencement of offshore construction of WAGP December 2008: First free flow natural gas supply through WAGP arrives in Ghana 1st March 2011: Commercial Operation Date 1st November 2011: Commencement Date 1st July 2012: Open Access Date

7 3. GAS-TO-POWER CUSTOMERS General Gas-to-Power contracts Power Purchase Agreement (PPA) Gas Sales Agreement (GSA) between Gas Seller and Gas Buyer Gas Transport Agreement (GTA) between Gas Shipper (Seller or Buyer) and Transporter (WAPCo) Main Power Plants Country Location Power plants Benin Togo Ghana Cotonou Lome Tema Takoradi Total Installed Capacity (MW) Gas Demand (MMBtu/day) TAG Cotonou GT CEB CAI GT BENIN GOVT TAG Lome GT CEB ContourGlobal DE IPP TT1PP GT VRA Sunon Asogli GT IPP TAPCO GT VRA TICO/TAQA GT VRA Present Gas demand: MMBtu/day Demand in 2015: MMBtu/day Demand in 2020: MMBtu/day Contractual Vol. (MMBtu/day) Type Owner GT: Gas Turbine DE: Diesel Engines CEB: COMMUNAUTE ELECTRIQUE DU BENIN, MAIN PRODUCER AND SOLE TRANSPORTER OF ELECTRIC ENERGY IN BENIN AND TOGO VRA: VOLTA RIVER AUTHORITY, MAIN PRODUCER OF ELECTRIC ENERGY IN GHANA

8 4. TARIFF SETTING Total gas price: $ 9 per MMBtu WAGP gas sales price components: 1. Gas purchase 2. Gas Take or Pay (ToP)charge 3. ELPS Transport 4. ELPS Ship or Pay charge 5. WAGP Transport ($4 per MMBtu) 6. WAGPA Charge ($0.06 per MMBtu) 7. Pipeline Protection Zone Charge ($0.25 per MMBtu) 8. Fuel gas-commodity 9. Fuel gas-elps Transport 10. Shipper Fee 11. Shipper ToP charge

9 4. TARIFF SETTING (continued) WAGP Transport 20-year rolling calculation (WAGPA would carry out periodic reviews and open rate base hearings 3 years for the Initial Tariff Period and 5 yearly subsequently) Postage Stamp Tariffs (non-distance-sensitive tariffs, based only on Reserved Capacity) Three Tariff Classes: Foundation Tariff: for Foundation Gas Transportation Agreements Standard Tariff: for Standard Gas Transportation Agreements, US$0.10 higher than Foundation Tariff Industrial Tariff: for Industrial Gas Transportation Agreements, 80% Average Tariff (AT) The AT is calculated to provide the Company with an after-tax, Real Rate of Return, from the assumed net cash flows for the Tariff Calculation Period of 13.5%.

10 5. WAGPA FUNDING The Treaty provides in Article IV. 7. The State Parties shall be responsible for providing or procuring funding for the WAGP Authority The State Parties shall arrange the funding for the costs of the WAGP Authority primarily from the WAGP Authority Charge to be paid by the Shippers on the WAGP and from such other sources The State Parties shall ensure at all times, and particularly in the event of any shortfall of funds paid to WAGPA that the costs of the WAGP Authority in excess of available resources are funded from the State Parties' budget so as to allow WAGPA to continue to perform properly its functions During construction phase, funding requirements met by loans from WAPCo and contributions from States Parties From 2012 budget, funding requirements met through WAGPA Charge BOG meeting to adopt WAGPA budget prior to the commencement of each calendar year.

11 6. THE WAY FORWARD WAGP s future depends on the future of the regional natural gas market WAGP for 4 countries but provision in the Treaty for possible expansion to other countries (Article XV states This Treaty shall be open for accession by states other than the State Parties on terms to be approved by the State Parties ) Only 2 buyers (foundation) to generate power, other power producers will come on board soon and some other industries will be interested too Only 1 Shipper (N-Gas); with Open Access, others will come soon Promising future (NG the cleanest of all of the fossil fuels, huge gas reserves in Nigeria, Nigerian gas sector reform in course, gas discoveries in other countries, LNG options are being considered, more and more gas demands in the sub-region, others ECOWAS countries interested in WAGP expansion, regulatory framework, ECOWAS regional integration)

12 THANKS! QUESTIONS PLEASE?