LATE last year, President, Dr. Irfaan Ali presided over the signing of the US$759 million contract to begin work on the much-anticipated Gas-to-Energy (GTE) project expected to be completed in 2024.

This is expected to be one of the largest civil infrastructure projects undertaken in Guyana’s history; it will include a Natural Gas Liquids (NGL) Plant and the 300-megawatt (MW) power plant at Wales on the West Bank Demerara.

Speaking at this year’s CERAWeek energy conference, Vice President Bharrat Jagdeo spoke to Guyana’s ambitions to utilise the estimated 17 trillion cubic feet (Tcf) of associated gas in the Stabroek Block.

“We’re having a different kind of conversation to move to monetize this gas,” Jagdeo said, adding: “They’re [Exxon] doing some studies and we are also getting some external help to do a gas strategy, but we believe that’s the next [energy] wave… because we believe that Guyana has a huge potential for becoming a gas producer.”

When complete, the GTE project will be a huge leap forward for Guyana, reducing the price of electricity by an estimated 50 per cent and increasing the reliability of the power grid. This represents a significant step forward for a nation that has suffered from energy insecurity throughout much of its history and a landmark moment for Guyana’s independence from expensive imported fuel.

Guyana, like many Caribbean countries, has long suffered from high energy costs and the impacts of global commodity prices for oil. Decoupling electricity production from the fluctuations and costs of the global oil market through local gas and eventually hydropower is a significant milestone.

The use of associated gas in the power sector will see the replacement of expensive and polluting heavy fuel oil (HFO), which will lower overall emissions from the sector and move Guyana closer to fulfilling the Low Carbon Development Strategy 2030.

There are studies of how natural gas emits less than half as much carbon dioxide as HFO and more than 95 per cent less particulate matter, nitrogen dioxide, and sulfur dioxide—the pollutants most damaging to human health.

The GTE project will diversify Guyana’s energy mix and significantly reduce the cost of electricity to the benefit of households and businesses, thereby catalysing rapid growth in industrial activity.

The 2023 national budget allocated G$43.3 billion to advance construction of the plant and associated facilities.
The gas project should start lowering household electricity costs by as much as half when it comes online in 2024 or 2025, although many more improvements will also be required to fully modernise the infrastructure of the electric grid and improve reliability.

Minister of Natural Resources, Vickram Bharrat, in a recent virtual programme, said that Guyana could save US$150 million to US$200 million annually on fuel imports once the project comes online.
He went on to highlight how integral this project will be to non-oil sectors that feel the brunt of energy costs in the country.
“Many of the stakeholders, be it in agriculture or forestry, or any other sector, when you try to encourage them to go into value-added, that is the first issue they raise with you — the cost and reliability of power generation,” Minister Bharrat said.

If other sectors are unable to afford high energy costs, then it stifles growth, which in turn stifles Guyana’s ability to diversify beyond its oil and gas sectors. Ending dependence on expensive imported fuel could go a long way towards ending that traditional obstacle to opportunity. As Guyana’s gas sector matures, the government is making it clear that GTE is an investment in energy independence, lower electricity costs, and diversification away from imported fossil fuels.

Looking ahead, Guyana is on track to transform the economy and the lives of the Guyanese people with the GTE project. This project is a sign of the progress underway in Guyana and the opportunities yet to come as the country develops and becomes a more significant player in global markets on its own terms.