The Management of West African Gas Pipeline Company, WAGPCo have raised the alarm that the company is in a precarious financial situation. According to the Managing Director of WAPCo, Mr. Walt Perez, the firm may soon go into extinction because of its poor financial status occasioned by low gas volumes and about $179 million debt profile in the face of dwindling cash flows. Perez said that many of WAPCo’s receipts have remained below contracted levels. Adding that the development has put the commercial viability of the company’s project in significant doubt. Speaking at the forum of Committee of Ministers of the WAGP Project in Abuja, Wednesday July 6, Perez said the problem with low gas volumes currently being experienced among members of the committee was worsened by the force majeure declared in 2013 and which still remains in effect today. “ The company initially appears to be resilient in the face of drastically reduced revenue flows because gas transmission and other operational activities continue.
The reality, however, is that WAPCo has been foundering. In fact, we have been conserving cash in order to prolong our time and operations, and as a result, WAPCo is now operating under extreme austerity conditions,” Perez stated.
The problem has much implication for the entire company and Nigeria’s investment in the gas company. Nigeria is the second largest shareholder in WAPCo, with a 24.9 per cent stake behind Chevron while West African Gas Pipeline Limited owns a 36.9 per cent stake in the company. According to experts, the situation is threatening the company’s existence, which puts its commercial viability in serious jeopardy.
Perez said that WAPCo had not been receiving full and consistent payments for gas delivery from its biggest customer, the Volta River Authority, (VRA) since August 2014 and further said that : “Under the current condition, WAPCo is unable to service its debt and isn’t undertaking critical maintenance schedules either . The company therefore has a much reduced capacity to pursue growth of any kind at this time.”