Proposals for gas monetisation strategy models to be explored

…public comments on gas strategy being included in initial draft

The Government plans to go out, in a week’s time, and seek proposals for a workable model of how Guyana can most effectively monetise its gas resources.
Last year, the Government had put out its draft Gas Monetisation Strategy for public feedback. On Tuesday, President Dr. Irfaan Ali announced that the Government is including the comments it received in the initial strategy.
“We’re looking, now that we’ve received all the comments in relation to the national gas strategy – we’ve received all the comments – we’re integrating all the comments with the initial document,” he said.
Moreover, the President announced that the Government would soon be putting out Requests for Proposals (RFP) on how best to monetise the gas resources, estimated at over 17 trillion cubic feet of gas.
“In another week, we expect to go out to request for proposals, to move towards implementing or looking at models, requesting models through which we can move as quickly as possible to monetising the total gas assets we have in our country,” he disclosed.
The monetisation of Guyana’s gas reserves has been described by Vice President Bharrat Jagdeo as the next wave of economic opportunity for Guyana. This is especially since the country has some 17 trillion cubic feet of associated gas.
Back in October, Government had released the draft National Gas Monetization Strategy to the public for their feedback. The aim was to simultaneously work on finalising the strategy while getting comments from the public, thus saving time.
Government has already made it clear that its goal is to find the best option forward to monetise its gas resources. The Government has already said that a large number of comments were received on the strategy.
Last month, the Vice President had said that all these comments would be included, and a total review of the strategy done.
Further, the Vice President had said that after the finalization of strategy, Government would like to nudge the gas development process along, and bringing in another partner will help to underwrite some of the expenses and the risks associated with monetising the gas.
Government is planning to pipe the natural gas onshore for its gas-to-energy project at Wales, West Bank Demerara, where an Integrated Natural Gas Liquid (NGL) plant and a 300-megawatt power plant will be built.
With Guyana seeking to develop the infrastructure to transport and store gas, a pertinent question will be capital costs. According to the draft gas strategy, the Government will be seeking to attract private funding for the gas infrastructure.
It was pointed out that gas transmission pipelines usually require Government investment in the early stages. When it comes to domestic gas and power projects, the strategy pointed out that initial Government investment is particularly done in countries with minimal existing gas infrastructure.
The strategy notes, however, that once the sector is more developed and private companies have the capacity, the Government’s direct participation in these projects may be reduced, and the projects themselves privatised.
“Infrastructure investments such as gas transmission pipelines and gas distribution systems typically require initial Government investment, particularly in countries with minimal existing infrastructure. When the sector and regulations are more developed, private companies can build and operate whole integrated systems. At which point, the Government’s participation may be reduced to regulation and the collection of taxes and fees. As projects for which Government has provided the initial investment near the point of becoming economically self-sustaining, there is then the opportunity for the Government to divest the project through privatization,” the document states.
One benefit of this, according to the strategy, is for the State to avoid the risks and debts, as well as diversify the investment in the sector. It was noted that private investment is necessary, considering Stabroek Block operators ExxonMobil and its partners, as they produce oil from the floating, production, storage and offloading (FPSO) vessels. (G3)