Natural Gas Supply Agreement (Ghana)
Natural Gas Supply Agreement
This Natural Gas Supply Agreement (this "Agreement") is entered into on [Contract Date] between:
SUPPLIER: [Supplier Name], Energy Commission licence number [Supplier Licence Number], of [Supplier Address] (the "Supplier"); and
BUYER: [Buyer Name], ORC registration number [Buyer Reg Number], Energy Commission licence number [Buyer Licence Number], of [Buyer Address] (the "Buyer").
The Supplier and the Buyer are collectively referred to as the "Parties".
1. Gas Supply Obligation
Subject to the terms of this Agreement, the Supplier shall sell and deliver, and the Buyer shall purchase and take, natural gas meeting the specification in Clause 2 at the delivery point specified in Clause 3, at a daily rate up to the daily contract quantity (DCQ) of [Daily Contract Quantity].
This Agreement is governed by the Ghana National Gas Company Act, 2013 (Act 852), the Energy Commission Act, 1997 (Act 541), and the Contracts Act, 1960 (Act 25).
2. Gas Quality Specification
The Supplier shall deliver gas meeting the following specification: [Gas Specification]. Gas not meeting the specification at the delivery point is "off-spec gas" and the Buyer may reject it.
Measurement of gas quantity and quality shall be conducted at the delivery point metering station using equipment accredited by the Ghana Standards Authority (GSA). Meter readings shall be jointly verified by the Parties monthly.
3. Delivery Point
The delivery point is [Delivery Point]. Title and risk in the gas pass from the Supplier to the Buyer at the delivery point.
4. Gas Price and Payment
The price of gas delivered under this Agreement is [Gas Price], payable in [Payment Currency].
The Supplier shall issue monthly invoices for gas delivered. The Buyer shall pay each invoice within [Payment Terms] by bank transfer to the Supplier's account at a Bank of Ghana-licensed institution. Payments must comply with the Foreign Exchange Act, 2006 (Act 723) where made in foreign currency.
All taxes including corporate income tax under the Income Tax Act, 2015 (Act 896) and any applicable withholding tax are the responsibility of the party upon whom they are imposed. The Ghana Revenue Authority (GRA) administers all tax obligations.
5. Take-or-Pay
The Buyer shall take or pay for not less than [TOP Percentage] in each contract year. If the Buyer takes less than the take-or-pay quantity, the Buyer shall pay the Supplier for the shortfall at the contract gas price.
The Buyer may recover paid-but-not-taken gas quantities ("make-up gas") within [Make Up Window] following the contract year in which the shortfall arose, at no additional charge, subject to the Supplier's available capacity.
6. Term and Force Majeure
This Agreement commences on [Commencement Date] and continues for [Contract Term], unless earlier terminated in accordance with its terms.
Force majeure events include upstream production disruptions declared by the Ghana National Petroleum Corporation (GNPC), GNGC pipeline outages, hydrological shortfalls affecting the Volta River Authority (VRA), NADMO-declared natural disasters, and government regulatory orders. The affected Party must give written notice within 14 days of the force majeure event.
If a force majeure event continues for more than [Max Force Majeure Period], either Party may terminate this Agreement by giving 30 days written notice without liability for damages.
7. Governing Law and Disputes
This Agreement is governed by the laws of the Republic of Ghana, including the Ghana National Gas Company Act, 2013 (Act 852) and the Contracts Act, 1960 (Act 25). Disputes shall be resolved by [Dispute Resolution].
Signatures
IN WITNESS WHEREOF the Parties have executed this Natural Gas Supply Agreement on the date first written above.
Supplier
________________
Signature
Buyer
________________
Signature
What Is a Natural Gas Supply Agreement (Ghana)?
A Natural Gas Supply Agreement in Ghana sets out the rights, duties and consideration binding the parties to it.
The Ghana National Gas Company Limited (GNGC), incorporated under the Ghana National Gas Company Act 2013 (Act 852), is the state-owned midstream gas company responsible for the processing, transportation, and marketing of natural gas in Ghana. The GNGC operates the Western Corridor Gas Infrastructure (WCGI) from Atuabo Gas Processing Plant in the Western Region to Tema Industrial Area and the Volta River Authority (VRA) power plants at Aboadze (Takoradi Thermal Power Station). The Ghana National Petroleum Corporation (GNPC), established under the Ghana National Petroleum Corporation Act 1983 (PNDC Law 64), is the upstream state oil company that oversees the development of Ghana's gas fields in the Jubilee, TEN (Tweneboa-Enyenra-Ntomme), and Sankofa fields operated by Tullow Oil, Aker Energy, and ENI respectively under petroleum agreements governed by the Petroleum (Exploration and Production) Act 2016 (Act 919).
The Energy Commission of Ghana, established under the Energy Commission Act 1997 (Act 541), licenses natural gas suppliers, downstream gas distributors, and gas processing facilities in Ghana. No person may supply, transport, or distribute natural gas in Ghana without an Energy Commission licence. The Public Utilities Regulatory Commission (PURC), established under the Public Utilities Regulatory Commission Act 1997 (Act 538), regulates the tariffs and terms of service for gas supplied to regulated utilities including the Volta River Authority (VRA), the Electricity Company of Ghana (ECG), and the Ghana Grid Company (GRIDCo).
A Natural Gas Supply Agreement in Ghana must be distinguished from a Gas Transportation Agreement, which governs the conveyance of gas through the GNGC pipeline infrastructure on behalf of a third-party gas owner, and from a Gas Processing Agreement, which governs the processing of raw wellhead gas at the Atuabo Gas Processing Plant into lean gas and natural gas liquids (NGLs). Companies wishing to purchase gas in Ghana for power generation, industrial processes, or compressed natural gas (CNG) distribution must hold both an Energy Commission licence and a valid Natural Gas Supply Agreement with the GNGC or another licensed gas supplier.
The Ghana Cylinder Manufacturing Company (GCMC) and the National Petroleum Authority (NPA), established under the National Petroleum Authority Act 2005 (Act 691), regulate the downstream liquefied petroleum gas (LPG) sector, which is governed by separate licensing and pricing regulations from those applicable to the natural gas sector under Act 852.
When Do You Need a Natural Gas Supply Agreement (Ghana)?
A Natural Gas Supply Agreement in Ghana is required whenever a licensed gas supplier agrees to supply natural gas to an industrial, commercial, or power generation customer under the Ghana National Gas Company Act 2013 (Act 852) and the Energy Commission Act 1997 (Act 541).
A Natural Gas Supply Agreement is needed when an independent power producer (IPP) in Ghana — licensed by the Energy Commission to generate electricity for sale to the Electricity Company of Ghana (ECG) or directly to bulk consumers — wishes to secure a natural gas supply from the Ghana National Gas Company Limited (GNGC) or another Energy Commission-licensed gas supplier for its power plant.
A Natural Gas Supply Agreement is required when an industrial consumer in the Tema Industrial Area, the Kumasi Industrial Zone, or the Western Region Special Petroleum Zone wishes to switch from liquid fuel (heavy fuel oil or light crude oil) to natural gas for process heating, reducing fuel costs and emissions in compliance with the Environmental Protection Agency (EPA) of Ghana's emissions standards under the Environmental Protection Agency Act 1994 (Act 490).
A Natural Gas Supply Agreement is needed when a gas distribution company licensed by the Energy Commission of Ghana wishes to purchase gas from the GNGC for onward distribution to small commercial and residential customers through a gas distribution network — a model being developed in the Tema and Accra metropolitan areas.
A Natural Gas Supply Agreement is required when a combined heat and power (CHP) project developer wishes to secure gas supply for a captive power and heat facility serving a large industrial complex, such as a cement plant, food processing factory, or aluminium smelter in Ghana.
A Natural Gas Supply Agreement is needed when a petrochemical investor — such as a fertiliser plant or a plastics manufacturer — wishes to use natural gas from Ghana's domestic fields as a feedstock, requiring a long-term supply commitment from the GNGC to underwrite the capital investment in the downstream facility.
Parties in Ghana should execute a Natural Gas Supply Agreement (Ghana) before any gas infrastructure investment is made or any gas offtake commitment is given to lenders or equity investors. Lenders financing gas-dependent power and industrial projects in Ghana require a signed Gas Supply Agreement as a condition of financial close.
What to Include in Your Natural Gas Supply Agreement (Ghana)
A valid Natural Gas Supply Agreement in Ghana under the Ghana National Gas Company Act 2013 (Act 852) and the Energy Commission Act 1997 (Act 541) must contain the following essential elements.
Parties and Licences: Full legal names and addresses of the gas supplier and the gas buyer, the supplier's Energy Commission licence number, the buyer's Energy Commission licence number (where the buyer is a licensed utility or gas distribution company), and both parties' company registration numbers from the Office of the Registrar of Companies (ORC) under the Companies Act 2019 (Act 992).
Gas Specification and Daily Contract Quantity: The gas quality specification (calorific value, pressure, and composition in terms of methane content, CO2, and H2S limits) and the daily contract quantity (DCQ) in millions of British thermal units (MMBtu) or millions of standard cubic feet (MMscf) per day. The specification must comply with the GNGC's gas quality standards for the Western Corridor Gas Infrastructure.
Delivery Point and Metering: The delivery point on the GNGC pipeline system where title and risk in the gas pass from the supplier to the buyer, the metering station specifications, and the measurement methodology agreed between the Parties. The Ghana Standards Authority (GSA) accredits gas measurement equipment used in commercial transactions.
Gas Price and Payment: The gas price formula — typically denominated in USD per MMBtu linked to an international benchmark such as the Brent crude oil price or a fixed contract price — the payment currency, payment date, and the method of payment through a Bank of Ghana-licensed institution. Foreign currency transactions must comply with the Foreign Exchange Act 2006 (Act 723).
Take-or-Pay Obligations: The minimum take-or-pay quantity the buyer must pay for each contract year regardless of actual offtake, and the make-up gas provisions allowing the buyer to recover paid-but-not-taken gas in subsequent contract years.
Force Majeure: Force majeure events specific to the Ghanaian gas sector — including hydrological shortfalls affecting the Volta River Authority's (VRA) gas-fired generation, GNPC upstream production disruptions, and GNGC pipeline outages — and the notification and mitigation obligations of the affected party.
Term and Termination: The contract term (typically 5 to 20 years for power generation offtake), renewal rights, and the grounds for early termination including insolvency, licence revocation by the Energy Commission, and prolonged force majeure.
Governing Law and Dispute Resolution: Ghana law, with disputes referred to the Ghana Arbitration Centre (GAC) under the Alternative Dispute Resolution Act 2010 (Act 798) or the Commercial Court in Accra. The forms-legal.com Natural Gas Supply Agreement (Ghana) template covers all GNGC and Energy Commission-required elements in a structured format suitable for commercial gas transactions in Ghana.
Additional compliance elements for a Natural Gas Supply Agreement (Ghana) used in Ghana include: Under the Companies Act 2019 (Act 992), the Registrar General's Department (RGD) maintains the register of Ghanaian companies. Section 7 of the Companies Act 2019 governs company incorporation. The Ghana Revenue Authority (GRA) administers corporate tax under the Income Tax Act 2015 (Act 896). The Commercial Division of the High Court in Accra adjudicates business disputes. The Ghana Investment Promotion Centre (GIPC) regulates foreign investment under the GIPC Act 2013 (Act 865). Forms-legal.com provides this template as a starting point for Ghana-compliant documentation.
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Natural gas supply in Ghana is regulated by two principal bodies: the Energy Commission of Ghana, established under the Energy Commission Act 1997 (Act 541), which licenses gas suppliers, transporters, and distributors; and the Public Utilities Regulatory Commission (PURC), established under the Public Utilities Regulatory Commission Act 1997 (Act 538), which regulates gas tariffs and service standards for regulated utilities. The Ghana National Gas Company Limited (GNGC), incorporated under the Ghana National Gas Company Act 2013 (Act 852), is the state-owned midstream gas company responsible for gas processing, transportation, and bulk sales. The Ghana National Petroleum Corporation (GNPC) under PNDC Law 64 oversees upstream gas development in partnership with international oil companies including Tullow Oil, Aker Energy, and ENI in the Jubilee, TEN, and Sankofa fields. The National Petroleum Authority (NPA) under Act 691 regulates the downstream LPG sector, which is separate from the natural gas sector.
A take-or-pay obligation in a Natural Gas Supply Agreement in Ghana requires the gas buyer to pay for a minimum daily or annual quantity of gas — the daily contract quantity (DCQ) or annual contract quantity (ACQ) — regardless of whether the buyer actually takes delivery of all that gas. If the buyer takes less than the contracted minimum, the buyer must still pay the full contract price for the shortfall quantity as if it had been delivered. Take-or-pay provisions protect the gas supplier — typically the Ghana National Gas Company Limited (GNGC) or an independent upstream producer — from the revenue risk of underperforming offtake during periods of low demand. Most Natural Gas Supply Agreements in Ghana include make-up gas provisions: the buyer may carry forward unpaid-for gas quantities and take them in later contract years at no additional charge, subject to a defined make-up window of typically two to three years.
Any person wishing to supply, transport, or distribute natural gas in Ghana must hold a licence issued by the Energy Commission of Ghana under Section 10 of the Energy Commission Act 1997 (Act 541). The Energy Commission issues separate licence categories for gas supply, gas transportation, gas distribution, and gas processing. An applicant for a gas supply licence must submit a detailed business plan, evidence of technical capacity, financial statements demonstrating the ability to fund gas procurement and infrastructure, and compliance with the Environmental Protection Agency (EPA) requirements under Act 490. Operating as a gas supplier without an Energy Commission licence is a criminal offence under Act 541. The Energy Commission publishes the list of licensed gas suppliers, transporters, and distributors on its official website, which parties should verify before executing a Natural Gas Supply Agreement in Ghana.
Natural gas in Ghana is typically priced in US Dollars (USD) per MMBtu, reflecting the international commodity nature of gas and the USD denomination of upstream petroleum agreements under the Petroleum (Exploration and Production) Act 2016 (Act 919). Payments by Ghanaian buyers to the Ghana National Gas Company Limited (GNGC) or other suppliers may be made in USD or in Ghana Cedis (GHS) at the Bank of Ghana official exchange rate on the payment date, depending on the terms of the Natural Gas Supply Agreement. Foreign currency transactions must comply with the Foreign Exchange Act 2006 (Act 723) and Bank of Ghana foreign exchange regulations. Industrial buyers purchasing gas through the GNGC's domestic gas distribution system typically pay in GHS at a tariff set in consultation with the Public Utilities Regulatory Commission (PURC). The Ghana Revenue Authority (GRA) taxes gas revenue in GHS at the applicable corporate tax rate under the Income Tax Act 2015 (Act 896).
Force majeure events in a Natural Gas Supply Agreement in Ghana typically include upstream disruptions such as well blowouts, GNPC-declared production curtailments, or force majeure events declared by international oil companies (Tullow Oil, Aker Energy, ENI) operating the Jubilee, TEN, or Sankofa fields; midstream pipeline outages affecting the Western Corridor Gas Infrastructure operated by the Ghana National Gas Company Limited (GNGC); hydrological shortfalls at the Akosombo Dam affecting the Volta River Authority's (VRA) demand for gas for power generation; acts of God declared by the Ghana Meteorological Agency (GMet) or the National Disaster Management Organisation (NADMO) under Act 517; government actions including Energy Commission licence suspensions or PURC regulatory orders; and civil unrest. The force majeure clause must specify the notification deadline (typically 5 to 14 days), the mitigation obligations of the affected party, and the maximum period of suspension before either party may invoke termination rights.
Gas supply disputes in Ghana may be resolved through several mechanisms. The Energy Commission of Ghana has authority to mediate and adjudicate disputes between licensed gas market participants under the Energy Commission Act 1997 (Act 541), and parties may refer technical or regulatory disputes to the Commission before commencing formal legal proceedings. Commercial disputes — such as payment defaults, measurement disagreements, or take-or-pay claims — are typically resolved through arbitration at the Ghana Arbitration Centre (GAC) under the Alternative Dispute Resolution Act 2010 (Act 798), which provides a confidential, expedited process for complex commercial disputes in Accra. Arbitration is strongly preferred over court litigation for gas supply disputes due to the technical expertise of arbitrators and the confidentiality of the proceedings. Where arbitration is not agreed, the Commercial Court in Accra (a division of the High Court of Justice of Ghana) has jurisdiction over all commercial contract claims including Natural Gas Supply Agreement disputes.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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