The revenue generated from the sale of Nigerian gas to three neighbouring countries for electricity generation rose by 11.36 per cent to $6.47m last year from $5.81m in 2019, according to official data obtained by our correspondent.
N-Gas Limited, a company owned by the Nigerian National Petroleum Corporation, Chevron and Shell, buys gas from oil companies in Nigeria and transport it to Ghana, Benin and Togo through the West Africa Gas Pipeline.
The company has executed agreements with upstream producers in Nigeria (Chevron Nigeria Limited Joint Venture and Nigerian Petroleum Development Company/ND Western Joint Venture) and with gas transportation companies (Nigerian Gas Company Limited and West African Petroleum Company) for the supply and transportation of gas to its customers.
The audited financial statements of N-Gas showed that its profit jumped by 53.32 per cent last year to $9.52m.
“Revenue arose from the delivery charges on sale of gas to Volta River Authority and Communaute Electrique du Benin- Lome/ Cotonou under their respective gas sales agreements,” the company said.
The revenue generated from gas supply to Ghana’s VRA was $4.64m while those of CEB Cotonou were $1.22m and $608,000, according to the financial statements.
In the notes to the financial statements, N-Gas said the outstanding receivable balances from VRA relating to gas sales from August 2014 to December 2020 stood at $69m.
“The bulk ($48m) of these receivables are way past due in line with the GSA contract Clause 13, which states that payments should be made to the seller within 10 business days of receipt of an invoice,” it said.
The company said it assessed the material impairment of the receivables by computing a fair value of the receivables as of December 31, 2020 with the impact reflected in the financial statements.
It said, “The Political Risk Insurance expired in December 2019, invalidating the debt guarantee provided by the Government Consent and Support Agreement. The renewal of the PRI is being processed by WAPCo with Marsh Insurance Brokers & underwriters.
“However, N-Gas has made good progress on recovering the balance of the legacy debt from the TAPCo (Takoradi Power Company) Account. The Escrow agreement for the TAPCo Account has been approved by N-Gas Board and awaiting approval from VRA Board.”
N-Gas said it recognised the efforts by VRA and the government of Ghana to liquidate the debt before the end of 2021.
The company said the force majeure declared by NGC, a subsidiary of NNPC, was lifted in November 2020, adding that all parties in the WAGP value chain agreed for the principal terms of the chain of agreement to kick in from May 2021.
“However, VRA has informally requested for a further six months’ extension till 31st October 2021, after which the force majeure will be lifted unless the waiver is further extended by written agreement of the parties,” it added.
N-Gas is jointly owned by the NNPC (62.35 per cent), Chevron N-Gas Limited (20 per cent) and Shell Overseas Holdings Limited (17.65 per cent).