Several essential pieces of equipment for the landmark initiative that promises to transform Guyana’s energy have arrived signaling a significant step towards harnessing the vast natural gas reserves discovered offshore.
This project will change the country’s landscape as it will provide a cleaner, more efficient, and cost-effective energy source. Progress on the construction front has been encouraging. The project involves the establishment of a natural gas pipeline from the Liza Phase 1 and 2 operations in the Stabroek Block offshore, stretching to the Wales Development Zone (WDZ) onshore.
The development of the pipeline and the onshore facilities is well underway, with both local and international contractors working to meet the timelines set by the government.
The Gas-to-Energy Project is expected to be a game-changer for Guyana. At present, we rely heavily on imported fossil fuels for electricity generation, making the country vulnerable to global oil price fluctuations.
By tapping into our natural gas resources, Guyana will now achieve greater energy security and independence. The project is also poised to significantly reduce the cost of electricity in Guyana. Lower energy costs are expected to stimulate economic growth, attracting investments, and boosting the manufacturing and industrial sectors.
Added to this natural gas is a cleaner alternative to the heavy fuel oil currently used for electricity generation and the switch to natural gas will reduce greenhouse gas emissions helping Guyana meet its climate commitments and improve air quality.
Moreover, the project brings cutting-edge technology and expertise to Guyana, fostering a knowledge transfer that will benefit the local workforce. The construction and operation of the gas processing and power plants will require skilled labor, thereby enhancing the technical capabilities of the Guyanese.
When this project is completed, it has the potential to make Guyana a regional energy hub. The Gas-to-Energy Project lays the foundation for future energy exports, which could strengthen Guyana’s position in the regional energy market. However, the project is not without its challenges.
Ensuring that construction stays on schedule and within budget requires meticulous planning and coordination among various stakeholders. The Gas-to-Energy Project represents a monumental stride forward for Guyana.
With careful management and continued collaboration, the project will not only revolutionize Guyana’s energy sector but also set the stage for sustainable and inclusive growth for years to come.
But before, this becomes a reality certain infrastructure has to be put in place but more importantly, adequate funding. With respect to infrastructure, a subsea pipeline will be installed on the seafloor to transport natural gas from the Liza field to an onshore pipeline on the West Coast of the Demerara River.
The onshore pipeline will deliver the gas to an integrated facility at Wales, on the West Bank of Demerara. At this facility, a natural gas liquids (NGL) processing plant will treat the gas to remove NGLs for commercialization, and a 300 megawatts (MW) power plant will use the dry gas to generate electricity for domestic use.
In terms of financial investments, already, ExxonMobil is expected to spend about US$1 billion on the onshore and offshore pipeline and ancillary infrastructure. This is just a portion of the US$1.8 billion that is needed to finance the project.
The government – the other partner in the project has applied for US$646 million (approximately GY$135 billion) in loan support from the United States Export-Import Bank to help meet the cost of its side of the project.
That loan is still to be approved by the US-based financial institution more than a year later although it has conducted an independent assessment of the entire project, including the environmental issues.
Only recently, Vice President, Barrat Jagdeo had stated that Guyana is still pursuing the project, with or without the US Bank’s loan – with the focus of providing cheap electricity to the citizens.
