Joy Business has gathered that state power generator has turned down a request by Tullow to supply gas from Jubilee Field for the T2 thermal plant in Takoradi.

This could have implications on utility tariffs and crude oil production at the jubilee field.

Sources say having completed works on the jubilee compressor, which broke down last month, Tullow  Oil, is now willing to increase gas supplies from the current 54 million standard Cubic feet a day to about 120 million standard Cubic feet over the next three days. 

This should mean that there will be more gas available for the Atuabo gas processing plant, for onward supply to Volta River Authority (VRA).

It will also reduce the cost of production, since gas is much cheaper compared to crude oil, a development that could possibly lead to a slight reduction in utility tariffs. 

However, managers of the T2 thermal plant Takoradi International Company (TICO), have turn down request by Tullow through the Ghana Gas Company to supply gas to the plant.

This means that Tullow might be forced to flare the gas, to ensure that the infrastructure on the Jubilee field is not affected or cut crude oil production.

But source close to VRA, which provides fuel for the T2 plant says the issue is more of a technical challenge than just an outright rejection.

The source says they were forced to turn to crude oil to power its plants, when they realized that it would be difficult to depend on Tullow for gas supply.  

The source maintains that from the way its plants operate, it might be difficult to quickly switch from crude to gas, that is why they need some time before they start taking gas from the Atuobo processing plant.