Managing the structure, regulation and infrastructure investment decisions in the natural gas industry of Ghana
In light of developing a nascent gas industry, present multiple challenges in restructuring, regulations and meeting infrastructure investments requirements. To identify an appropriate industry structure and provide suitable regulatory framework to attract adequate infrastructure investments are the requirement to maintain a viable nascent gas industry. The purpose of the study is to examine the conditions required for developing a viable nascent gas industry in Ghana. The study develops an analytical framework by combining the Structure-Conduct-Performance paradigm and the Transaction Cost Economics theory with stakeholder consultation in an integrated cash flow model, which identified inappropriate industry structure, ineffective regulation and high risk as challenges in the gas industry in Ghana. The current gas industry structure and regulatory framework in Ghana is identified as state control monopoly. To strengthen the analysis of the study alternative gas industry structural models were reviewed. The Single Buyer Model (SBM) is suggested as an initial stage structure for Ghana National Petroleum Corporation (GNPC) to commercialize upstream natural gas resources and ease transactions cost. However, the SBM is constrained by the Volta River Authority (VRA) and Electricity Company of Ghana (ECG) inefficiencies. The Multiple Buyer Model (MBM) is considered as a transitional structure to solve the existing hold-up and lock-in inefficiencies of Ghana National Petroleum Corporation-Ghana National Gas Company-Volta River Authority (GNPC-GNGC-VRA) firm structure. Enforcing open access regulations to essential infrastructure is required in the long run. Developing an integrated gas-to-power project in Ghana is a viable business. Nevertheless, non-associated gas production from the Sankofa Gas Project is risky and requires higher gas prices and alternative downstream consumers to be viable. The Gas Processing Plant and transmission pipeline tariffs are inappropriately set and requires regulations. Providing effective regulations and governance arrangements by establishing an independent regulator through a gas sector law are important in protecting the interest of various stakeholders in the nascent gas industry in Ghana.
- PhD