Government has approved the takeover of the Ghana National Gas Company by the Ghana National Petroleum Corporation (GNPC).

Finance Minister Seth Terkper announced this when he presented government’s financial statement for 2015 to Parliament on Wednesday.

“The consolidation of GNPC and GNGC will make it possible to enhance a more integrated management and continue financing of projects in the oil and gas enclave immediately,” he said.

He further noted that, “It will make it possible to ease the conditions that investors impose for the national gas aggregator and start financing projects in the oil-and-gas enclave immediately.”

The GNPC recently indicated plans to secure a $700 million loan to support its exploratory activities.

The Minority in Parliament have accused the Corporation of engaging in an illegality.

Some MPs argue the loan agreement is an international transaction which should have come to Parliament for approval.

The GNPC has parried those arguments, insisting it has the backing of the law.

Supporting the Corporation’s argument, Seth Terkper said, "I would like to emphasise that this loan is a GNPC loan and not a central government loan. The cost of borrowing at around 5 percent is highly competitive. The uses, as outlined by GNPC, are very clear and compelling, both commercially and strategically. The facility, together with GNPC’s other resources, will be used to support such investment needs as the pipeline and receiving facility in the Offshore Cape Three Points Project (OCTP), which GNPC will finance with US$493 million out of the loan proceeds, to provide a significant boost to monetizing Ghana’s natural gas."

"Similarly, the US$36 million to US$45 million investment to link the Tweneboa natural gas to the Jubilee FPSO," the Minister told Parliament, "will enable cheaper processing of the gas by the Atuabo Plant. In addition, GNPC plans to use between US$200 million and US$300 million as part of measures to provide adequate financial security for the OCTP gas project."

According to him, the $700 million loan facility "is expected to be as much a game changer as the investment of about US$1.0 billion in our first gas infrastructure. These are all critical to our long-term national energy security."

He said, "It is in this vein that Government has approved the takeover of the Ghana National Gas Company Limited (GNGC) by GNPC to create a gas subsidiary for the latter. The consolidation of GNPC and GNGC will make it possible to enhance a more integrated management and continue financing of projects in the oil and gas enclave immediately. It will make it possible to ease the conditions that investors impose for the national gas aggregator and start financing projects in the oil-and-gas enclave immediately."