Gas-to-Energy Project: Phase 2 could be completed in two years – VP Jagdeo

As the Guyana Government moves ahead with Phase Two of its model Gas-to-Energy (GtE) Project to match the rapid growth in electricity demand across the country, Vice President Bharrat Jagdeo believes that the second power plant and Natural Gas Liquids (NGL) facility could be completed within two years.
During his recent press conference, Vice President Jagdeo was asked about the likely timeline for the construction of the second phase of the project.
“We anticipate that this could be done in two years… And that, we believe, is an outside limit. So, depending on the date we start, we can kick this in or have it ready in two years,” he stated on Thursday.
Only two weeks ago, the Government invited interested companies to submit proposals for a second power plant and NGL facility at Wales, West Bank Demerara, – the project site for the current Gas-to-Energy project.
ExxonMobil, the operator of the oil-rich Stabroek Block, is laying 250 kilometres of 12-inch pipelines that will bring the gas onshore. However, only 40 per cent of the pipeline’s capacity will be used in Phase One to gas up the first power plant and NGL facility at Wales, bringing 50 million standard cubic feet per day (mmscfd) of dry gas onshore.
But with the pipeline having the capacity to push as much as 120 mmscfd of gas, Government is now moving ahead with Phase Two of the GTE Project that will utilise the remaining 60 per cent capacity of the pipeline and will see an additional 75 mmscfd of rich gas brought onshore.
Consequently, qualified firms are now being invited to respond to the Government’s Request for Proposals (RFP) to “design, finance, and operate” Phase Two of the Gas-to-Energy Project on the basis of a 20-to-25-year Power Purchase Agreement (PPA).
This second phase includes the design, construction, and operation of a 250 megawatt-MW combined-cycle power plant, to deliver 2100 gigawatt/hours of electricity per annum, which will be sold to the Guyana Power and Light (GPL) Inc. It also caters for the design, construction, and operation of another NGL facility to produce approximately 6000 barrels per day of NGL products such as propane, butane, and C5+gasolene.
Additionally, Phase Two also includes the transfer, at no cost, of excess “lean gas” estimated at 30 mmscfd, for utilisation in downstream industries, eg fertiliser production, to be located at Wales.
Based on the RPF document, the Phase Two projects will be located on no more than 100 acres of land, immediately adjacent to the existing 300 MW Integrated facility at Wales and will be 100 per cent owned and financed by the Private Sector – similar to the project finance structure of Phase One of the GtE Project.
It was noted that only firms (consortia) adjudged to be experienced in Engineering, Procurement and Construction (EPC) and Financing of comparable facilities, will be evaluated. Government also said it intends to appoint an independent supervision firm to ensure the project is built per approved contract quality and specifications.
This move to establish a second power plant at Wales is part of the People’s Progressive Party/Civic (PPP/C) Government’s efforts to transition to clean energy, slash the costs of electricity and provide reliable energy sources for the country’s booming economy.
VP Jagdeo reasoned that it would be better to have private investors develop and generate the power then sell this back to GPL at a much cheaper rate than the 50 per cent reduction that the current Gas-to-Energy Project would offer.
“Now that we’ve established the cost structure by making our own investment, we could easily buy the power, now, from a private investor… If an investor were to invest there to amortise their capital cost and pay for the power at, say, current prices at Henry’s hub for the gas, they should be able to supply power competitively – maybe around six cents per kilowatt hour or even lower,” he noted.
Currently, GPL is generating power at 22 cents per kilowatt hour, but when the GtE Project’s first phase comes on stream next year, this cost is expected to be slashed in half
According to Jagdeo, Government is anticipating buying power at an even much lower rate – six cents per kilowatt hour from the private investors, even with them paying for the rich gas from offshore.
He noted that all of these and other variables would have to be discussed as part of the bid document.
Additional details are outlined in the RFP document, which can be obtained from the Permanent Secretary of the Prime Minister’s Office for a fee of $25,000.
Interested parties must submit their proposals, which have to include financial projections of revenue, expenses, and investment returns, by 2: pm on November 14, 2024 to the National Procurement and Tender Board Administration (NPTAB).