By Shikema Dey
The multi-billion-dollar plan to bring gas from offshore Guyana is a viable one to solve Guyana’s energy needs at a sustainable cost, Vice President, Dr Bharrat Jagdeo reaffirmed on Monday.
“Even as a layman, when you go through the numbers you will see…you can have a fixed input at three and a half cents per kilowatt hour – which includes paying back the capital cost for the pipeline and the cost of the gas… and even going lower.
“…Compare that to 10 cents per kilowatt-hour that you are paying now to import fuel that is dirtier and save (US) $150 million dollars (per year)… then it is financially feasible,” Jagdeo said at a briefing with the media at the Arthur Chung Conference Centre.
It was stated that the pipeline will land at Crane, West Coast Demerara and then stretch to Wales, West Bank Demerara, where the plant is expected to be situated based on the studies. The government estimates that the project will cost approximately US$900 million. With fuel savings and stability of gas supply, the project will benefit short repayment term.
At Monday’s briefing, which featured representatives of a task force set up to manage the development of the project, it was explained that the five previous studies done are being used to inform decisions regarding the project.
The studies were: the Gas to Power Feasibility Assessment in Guyana by K&M Advisors; an Oil and Gas Master plan by Japan Cooperation Centre Petroleum Chiyoda Corporation – updated February 2021; a Study on System Expansion of the Generation System by Brugman SAS; a Desk Study of the Options, Cost, Economics, Impacts, and Key Considerations of Transporting and Utilising Natural Gas from Offshore Guyana for the Generation of Electricity (2017) by Energy Narrative; a Feasibility Study for Guyana’s Offshore Natural Gas Pipeline, NGL Separation and LPG Production plant, and related electricity infrastructure – 2018 by Energy Narrative; and a Feasibility Study for Guyana’s Offshore Natural Gas Pipeline, NGL Separation and LPG Production plant, and related electricity infrastructure – Revised Final Report: Appendix C by Energy Narrative.
Further reasoning why the project is practicable, Jagdeo said: “What this brings is long term stability to the price, not the wild fluctuation in prices so we are immune from future market fluctuations, especially the upward movement of the cost of the bunker and other fossil fuels.”
Per the agreement reached with Stabroek Block operator ExxonMobil, the Vice President said funding for the pipeline will be taken from cost oil.
ExxonMobil also committed to increasing the gas from 30 million cubic feet (mcf) to 50 mcf, which will see the provision of power increasing from net 150 MW to 250 MW.
“And the 50 million cubic feet would allow us to generate 250 megawatts and still have some additional gas that will remain for other purposes that we are hoping to utilize,” the VP explained. “There are currently work done to see maybe urea and some polymers, looking at basalt fiber, looking at protein for the agriculture sector.”
It is envisaged that the project could come on stream by 2024.