–says gov’t will fight for country’s future well-being

VICE-PRESIDENT Dr. Bharrat Jagdeo has called on Guyanese to reject those naysayers who have a prejudicial agenda to kill the Wales Gas-to-Energy (GTE) project.

This call comes following the circulation of more misinformation in the media about the project.

Despite the government continually being thoroughly transparent about every stage of the project, the Vice-President noted that the main political opposition, the A Partnership for National Unity (APNU), and certain sections of the media continue to peddle misinformation.

“We are fed up of people who want to destroy the future well-being of this country. Many of them have lived their life; they don’t think of the young people. We are never going to tolerate that; that is not what the PPP/C is about. We’re not into that; we’re going to fight them every single day,” Dr. Jagdeo declared during a recent interview broadcasted on his official Facebook page.

The VP was at the time addressing an article in another section of the media that attempted to contradict announcements by the government that the natural gas that will be supplied to the project by ExxonMobil subsidiary Esso Exploration and Production Guyana Limited (EEPGL), will not be free of cost.

EEPGL has guaranteed the government that a minimum of 50 million standard cubic feet of gas per day (mmscfd) will be transported through the pipeline from the Liza Phase One and Liza Phase Two Floating, Production, Storage, and Offloading (FPSO) vessels, to a power plant and Natural Gas Liquids (NGL) facility that will be built in Wales, on the West Bank Demerara.

The conversion of natural gas from ExxonMobil’s offshore operations to electricity is a key component of the People’s Progressive Party/Civic (PPP/C) Government’s objective to lower energy costs by at least 50 per cent, through an energy mix which incorporates gas, solar, wind, and hydro power.

The power plant in the GTE project is expected to see electricity costs in Guyana being reduced by 50 per cent.

Meanwhile, aside from the natural gas being used to fuel the power plant, Guyana could generate somewhere between $70 – $100 million from the sale of cooking gas produced by the NGL facility.

The pipeline to transport the gas will be funded from ‘cost oil’, and the government would later retain ownership of the pipeline, through amortisation, which is the process of gradually writing off the initial cost of an asset.

In recent remarks, ExxonMobil Guyana Country Manager Alistair Routledge noted that there will be a cost associated with the GTE that the government will have to repay.

Media houses took this to mean that the gas will not be free. However, Dr. Jagdeo, during his interview, clarified that the cost that Routledge in fact referred to is the amortisation of the pipeline.

“We said that we are developing the pipeline jointly with Exxon; we’re financing it out of cost oil. So, because it’s coming from cost oil, we have to pay it back; it’s not free. They’re putting in some money, and we have to put in some money. So, we decided that over the 20 years that Exxon has to put a 52 per cent of that cost [and] we have to come up with 48 per cent of it,” Dr. Jagdeo explained.

Cost oil is the money deducted from the oil revenue for production costs. Cost oil is deducted before either EEPGL or the government can collect profit from the oil production.

The amortisation is being done so that Guyanese can own the entire GTE structure, and derive full benefit.

“We explained many times that the gas-to-energy project, we are going to own 100 per cent of it. The power plant and the NGL facility to process the gas, the People of Guyana will own that,” Dr. Jagdeo noted.

To come up with a calculation of Guyana’s 48 per cent of the cost oil, Dr. Jagdeo explained that it was calculated based on the amount of gas being piped in.

“We have to pay yearly to amortise our share of the pipeline over 20 years to pay back for it; so we took the figure to pay back for the pipeline, and we divided that figure by the 50 million cubic, and said this is the commercial agreement. It’s not like you’re paying for the gas, but we’re just for convenience taking that figure to amortise. It’s reflected as a gas payment, but we’re paying zero for the gas. We are paying to amortise the pipeline; it is easier commercially for us to do that, so it’s that simple. We’re paying back over 20 years for 48 per cent of the pipeline,” Dr. Jagdeo added.