Wednesday, December 2, 2015

Karpower ship to consume $9million worth of fuel monthly

The 225megawatt Karpowership (Aysegul Sultan) will consume an estimated 30,000 to 35,000 tonnes of Heavy Fuel Oil (HFO) per month, which translates into close to US$9million per October HFO (Rotterdam) price of US$254 per tonne.

Patrick O’driscoll, Sales Director for Karpowership, disclosed the fuel volumes to the B&FT at the Tema Fishing Harbour, where the power ship has been stationed and is expected to start generating electricity in the next couple of weeks.

“The fuel is available; it is sitting offshore Tema at the moment in a shuttle vessel,” Patrick O’driscoll said, adding that: “We are working to make it [the power ship] operational in the next couple of weeks.”

Also, according to the Power Minister, Dr. Kwabena Donkor, “GNPC has signed a fuel sale agreement with Trafigura [a commodities trading company] and also with Karpower,” to ensure regular supply of fuel to the power ship.

Apart from issuing a guarantee for the powerships, the second of which is expected in the coming months, GNPC will be the main fuel supply for the generation of power.

CEO of the corporation, Alex Mould, told the B&FT in September that his outfit has had to step in because the power ships will be a means to dispose of its gas resources in the near-future.

“So we are going to initially start the barges with HFO [Heavy Fuel Oil], and then as soon as our gas comes on-stream we will be supplying gas,” he said.

A source, whose word the B&FT could not independently verify, however said that per terms of the ten-year contract the barges are to run on HFO for as long as the first five years -- after which they can be moved onto gas.

If this position is accurate, then the barges may not take gas even if the Sankofa gas project delivers first gas on schedule in 2018.

According to Alex Mould: “One of the conditions of ENI for this project [Sankofa] to go on is that GNPC must ensure it has capacity to take the gas; so this is why GNPC entered into this [the karpowership deal]. We have to make sure that the capacity is ready to take the gas. If not, then we start paying penalties to ENI for not being able to take the gas. It is a take or pay contract. So far as the gas is available, we are supposed to take it. If there is nowhere for us to dispose of the gas, it becomes a financial loss to the country”.

Fuel supply shortages have been one of the major challenges plaguing the electricity sector, with main power generator VRA owing gas suppliers close to US$400million. The VRA is also said to require some US$30million per month for the purchase of light crude oil.

Source: B&FT