Govt gets $5B in supplementary funding for gas-to-energy project

…monies also passed for Linden & Lethem power companies

The Government went before the National Assembly on Wednesday to request an additional $5 billion in supplementary funding for the gas-to-energy project, which will go towards the necessary infrastructure to support the project.
During the 67th Sitting of Parliament, Finance Minister Dr Ashni Singh provided details on the $5 billion being requested for the gas-to-power project, prior to it being passed, as part of the $61 billion supplementary paper. Specifically, the money for the project will be used for upgrading the electrical distribution network necessary to integrate energy from the power plants in the project.

“This line item finances a number of interventions associated with the gas-to- energy project, including the EPC contract for engineering procurement and construction of the power plant itself; project management and supervision expenses; components in relation to upgrading through the transmission and distribution network, in order to adequately and efficiently offtake the power being generated by this project; and associated other interventions.”
The Finance Minister pointed out that the contracts for this project have already been awarded. These include the US$159 million engineering, procurement and construction (EPC) contract awarded to Kalpataru Projects International Limited (KPIL) last month.
“And so what this amount represents is, given the updated projections of how each of these contracts will be advanced, the EPC contract, for which an international firm was contracted, and the supervision of the EPC contract, again an international company doing that,” the Finance Minister said.

“What this amount represents is what we anticipate will be the additional resources needed, given the pace at which these various components are progressing, and payments we anticipate will follow through. This represents, now, the latest estimate of what we anticipate will be the totality of the project.”
The funding, according to the Finance Minister, is being sourced out of the Consolidated Fund. The minister also confirmed that land acquisition for the purpose of the project is an ongoing exercise. However, this is not currently being funded from the $5 billion supplementary provision.
In Budget 2023, the gas-to-energy project received a $43.3 billion allocation. This allocation is in addition to the $24.6 billion injected into the start-up of the transformational project, which includes the construction of an Integrated (Natural Gas Liquid) NGL Plant and the 300-megawatt (MW) Combined Cycle Power Plant at Wales, West Bank Demerara (WBD).
The NGL and 300MW power plant components of the gas-to-shore project are meanwhile expected to cost US$759.8 million, and will be financed through sources that include budgets and loan financing.
The scope of Guyana’s gas-to-energy project consists of the construction of 225 kilometres of pipeline from the Liza field in the Stabroek Block offshore Guyana, where Exxon and its partners are currently producing oil.

Power companies
Questions were also asked about the additional $927 million that the Government is seeking under the Office of Prime Minister for the Linden Electricity Company and the Lethem Power Company, which are receiving $663 million and $264.7 million respectively.
It was explained by Dr. Singh that due to the increased cost of fuel, the Government had no choice but to request the supplementary funds. He also informed the Opposition that requests for extra funds were only received from the two power companies.
Meanwhile, in response to questions from A Partnership for National Unity (APNU) Member of Parliament David Patterson, Minister within the Public Works Ministry, Deodat Indar, explained why additional funds are needed in spite of the one-megawatt solar farm in Lethem.
“I remember when this facility at Lethem was established, and commissioned to provide supplemental power to the Lethem Power Plant. Solar power is intermittent power. It doesn’t run 24 hours. So, it’s intermittent power, fed into the generation capacity at Lethem.
“It is designed to reduce fuel costs. You have intermittent power, so only some parts of the day you have sunlight. So, when you have sunlight, that power is pushed into the power plant and reduces the cost of power,” Indar said.
According to the minister, an analysis was done by the Hinterland Electrification Company Incorporated (HECI) on the Lethem Power Company, and it was found that extra money was needed to run the plant due to the increase in fuel costs. Indar also acknowledged that some of the generation sets at Lethem are old, and thus burn more fuel. Demand for power in Lethem has also increased. (G3)