By Kizito CUDJOE
The Ghana Extractive Industries Transparency Initiative (GHEITI) has urged government to review its decision appointing the Ghana National Gas Company (Ghana Gas) as national gas aggregator, warning that stalled institutional reforms and legal gaps are undermining clarity in the country’s gas governance framework.
In its latest report, GHEITI noted that although Cabinet approved the aggregator role’s transition from Ghana National Petroleum Corporation (GNPC) to Ghana Gas in 2020, GNPC continues to manage existing gas sales agreements – with the structures needed for Ghana Gas to operate fully in that role yet to be put in place.
The decision at the time sought to centralise gas aggregation, processing and marketing under one entity – with Ghana Gas, which has traditionally focused on gas processing, expected to pool upstream gas resources for sale to bulk consumers including power producers.
The proposal, initiated by Ghana Gas and submitted to the Ministry of Energy, was backed by directives from the Presidency in May 2020 for swift implementation.
It aimed to streamline the management of associated gas from offshore oil production and integrate midstream gas operations, including aggregation, processing and transmission.
Under the plan, GNPC was to relinquish its aggregator role to allow Ghana Gas assume the responsibility fully.
However, GHEITI said the institutional arrangements required for the transition have not materialised and urged government either to withdraw the directive or amend the relevant legislation if it intends for Ghana Gas, or another entity, to serve as national gas aggregator.
Some oil and gas experts say the uncertainty risks creating institutional overlap in the country’s gas market, which could affect transparency, investor confidence and pricing in the power sector, since gas costs feed directly into thermal electricity generation and electricity tariffs.
Earlier policy decisions had also sought to integrate operations between the two entities. In 2015, government approved Ghana Gas becoming a subsidiary of GNPC to improve coordination and financing of oil and gas projects.
When the aggregator transition was first announced, some civil society organisations – including the Africa Centre for Energy Policy (ACEP) – questioned whether Ghana Gas had the financial capacity to assume the role, arguing GNPC’s petroleum revenue base gave it stronger leverage to support gas infrastructure expansion.
ACEP also cautioned that acting as a gas aggregator carries significant commercial risks, particularly during periods of market volatility such as the COVID-19 pandemic.
In a separate recommendation, GHEITI urged Ghana Revenue Authority (GRA) to ensure GNPC’s subsidiary Explorco ring-fences its Jubilee and TEN field operations for tax purposes, warning that commingled revenues could obscure taxable income and lead to potential revenue losses.
GHEITI noted that Explorco acquired a 7 percent stake in the Jubilee and Tweneboa-Enyenra-Ntomme (TEN) fields but has yet to pay corporate income tax on that interest, raising concerns over compliance with income tax laws.
The transparency body said government must act to clarify roles in the gas sector and strengthen compliance across the extractives industry to safeguard public revenues and investor confidence.
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