–with landmark gas-to-energy project, President Ali says
MORE than just saving the country billions of dollars through reduced electricity and cooking gas costs, the landmark gas-to-energy project will cut across sectors and contribute holistically to the improvement in the quality of life of all Guyanese.
This was according to President, Dr. Irfaan Ali, on Thursday, during an engagement at State House, where he outlined the benefits of the much anticipated project which is expected to come on stream by 2025.
According to President Ali, the project fits into the national transformational agenda, which is built on seven pillars: infrastructural transformation, technological transformation, services, energy security, food security, human transformation and mental transformation.
“The benefits of this project is not only about electricity and the cost of electricity… that is for those who want to structure it in a narrow construct. This is a transformational project that must be structured in the transformational construct because it is directly linked to all the other sectors,” The Head of State said.
He added: “This is a project that is national and transformational in nature, one that cuts across varied sectors. It is directly linked to poverty reduction, opening up of opportunities, creation of new growth poles and growth hubs. It is one of those projects that brings direct benefit to the pockets of people.”
According to the President, the project will free up a lot of revenue that could be used in poverty alleviation areas, directly linking the project to outcomes in poverty reduction.
“The project also has a direct link to our long term and medium term plan of being food secure and expanding our market to the region. This project also is part of our climate resilience plan. That is where our thoughts have to go now… what are the best possible opportunities to bring even greater return and greater good,” President Ali said.
Through the project, there will be the establishment of a gas-processing plant (GPP) and a natural gas liquids (NGL) facility, which will be capable of producing at least 4,000 barrels per day, including the fractionation (or separating out) of liquefied petroleum gas (LPG).
The natural gas will be coming from the Liza area in the Stabroek Block and will be piped to a location stretching 150 acres in the Hermitage section of the Wales Development Zone (WDZ).
The WDZ was selected as the landing facility for the pipeline, following the consideration of more than 20 potential locations.
ExxonMobil’s local affiliate, Esso Exploration and Production Guyana Limited (EEPGL), has guaranteed the government that a minimum of 50 million standard cubic feet of gas per day (mmscfd) will be transported through the 225km pipeline by 2024. The pipeline will have a maximum capacity of 130 mmscfd.
The power plant is expected to generate up to 300 MW of power with net 250 MW delivered into the Guyana Power and Light (GPL) grid at a sub-station located on the east bank of the Demerara River.
The project shall include a 230 KV substation and back-up fuel capacity, while the NGL plant will have the capacity to process 60,000 cubic feet per day (MCFD) in the first phase and up to 120 MCFD in the second phase.
Through the use of natural gas as opposed to fossil fuels, the country will be able to reduce its carbon emissions; this forms part of the government’s overarching Low Carbon Development Strategy (LCDS).
In terms of direct savings, President Ali said that Guyana could save as much as $27 billion per month from the electricity cost and cost of cooking gas.
From electricity, for the approximately 220,000 households currently on the GPL grid, the government spends $40 billion per month of which US$11 million is spent on fuel. With the gas to energy project, which is estimated to produce power at US$0.04 to US$0.05 cents per kilowatt hour (kWh), Guyana is expected to cut spending on electricity by half, which equates to $20 billion.
“That is $20 billion in savings for the households of Guyana. That 220,000 households, $20 billion will go back to their pocket. That is $20 billion of revenue that will be freed up and made available to be spent on the economy, and expand the acquisition of goods and services,” the Head of State said.
The US$0.04 to US$0.055 cent per kWh will cover the money needed to pay back for the pipeline, the NGL facility, the power plant, and also the operating cost.
This is so because the gas coming to the power plant and NGL facility will be free of cost. Having the natural gas provided free of cost was agreed upon following negotiations with ExxonMobil.
“I want to thank all our partners. This was no walk in the park. Negotiating with ExxonMobil is like negotiating with a super power state. Don’t doubt our technical capability that we brought to this. This came with tremendous hard work,” President Ali said.
The facility is expected to produce 3,500 barrels, allowing Guyana to not only satisfy the local demand, but also to look at opportunities for the exportation of cooking gas.
President Ali said too that the project will enable the government to fulfil several promises made in its manifesto including the provision of affordable, stable, reliable energy, a mix of energy sources, increase of the electricity production to 400 MW and the reduction of the cost of energy to the consumer.
“In terms of the manifesto, we have passed the test of soundness,” the President said.
Also making remarks at the event was President of ExxonMobil Upstream Oil and Gas, Liam Mallon, who noted how proud he was of the progress being made in Guyana.
“You should be tremendously proud of what you are accomplishing. I am proud and optimistic of what’s to come,” he said.