Ghana rejects assured gas supplies scuttling Indian fertilizer project

KOLKATA (ICIS)–Ghana has turned down request for assured supplies of natural gas effectively scuttling India’s plans to construct a $1bn urea plant in the western province of the African nation, an official in Indian department of fertilizer said on Wednesday.

“Since June last year, Indian delegations have been visiting Ghana seeking assured supplies of natural gas and settling pricing issues to enable an Indian fertilizer company to implement the 1.2m tonne/year urea plant in Ghana,” the official said.

“The government of Ghana has communicated through diplomatic channels that the latter was unable to make any commitment on either assured supplies or pricing since the Ghanaian power sector has been accorded priority in natural gas allocation,” he added.

India and Ghana had signed a government-to-government memorandum of understanding in 2010 to jointly implement the gas based urea project and stipulated that both the governments would nominate a company each from their respective countries to participate in the joint venture.

India’s government owned and managed Rashtriya Chemical and Fertilizers Limited (RCFL) was nominated as company to participate in the Ghana project, the official said.

When contacted an official in RCFL said that the company was yet to be informed but since the project was part of bi-lateral economic cooperation between the two governments, RCFL would have to abide by directive from the department of fertilizers.

“Of course it is axiomatic—no gas, no project,” he said.

“The Ghana project had been under a cloud and review by the Indian government since 2012 with the former dragging its feet in demand for gas supplies and pricing at $2-2.5 million metric British thermal unit (mmBtu),” the official in department of fertilizer said.

India in the same year had also expressed concerns over gas supply to the fertilizer project following the Ghana government awarding a gas pipeline project to Sinopec, China, instead of India’s gas transportation and logistics company, GAIL India Limited, the official said.