Reduction in energy costs will improve export capability – GMSA President

…Gas-to-Energy project will propel small businesses

The manufacturing sector in Guyana will see substantial growth with the reduction in the cost of energy when the Gas-to-Energy project is launched.
According to the Guyana Manufacturing and Services Association (GMSA) President Ramsay Ali, this reduction will improve export capability significantly.
Ali was at the time speaking during a recent edition of the Energy Perspectives podcast, and stated that most local manufactures are not competitive in the export market due to the high cost of production.
He noted that one of the main factors that contribute to high production costs is the cost of energy. On this point Ali emphasised that if businesses are able to reduce their production cost, due to a decline in the cost of energy, their export capability would be improved significantly.
“But really and truly, you don’t make a significant amount of profit in exports, simply because of the cost of production. So, there you go. if you can have that kind of reduction in your production cost, because of energy, and then you’re going to talk to us now about the quality of energy, your export, these companies I’m talking about, their exportability will significantly be raised,” he asserted.
Moreover, Ali noted that the US$1.7 billion Gas-to-Energy project will bring major benefit small businesses.
He noted that most large manufacturing companies have already invested in energy generating systems, when the new project comes online these companies will most likely utilise a hybrid system, which will use energy from the grid combined with energy generated from their systems. However, for the small businesses, he noted, this project will improve their trajectory on the export market by reducing the overall cost of energy by up to 30 per cent.
“I’m even more excited for small businesses with this project than for larger companies. Because some of the larger companies have invested so heavily in their generating systems. But for me personally, I am so excited about the effect, the positive effect we will have for the smaller businesses. If they can see a 20% reduction in their costs, or 30% reduction in their overall cost because of energy, that’s going to be amazing for them. It can be a game changer for them” he stated.
Additionally, the GMSA president highlighted that low energy cost, coupled with the increase in consumption of local products and the implementation of new agricultural practices will transform the agro-processing landscape in Guyana.
He noted that Guyana is poised to become a regional leader in agro-processing once the Gas-to-Energy project comes on stream in 2025. However, Ali stressed that for the benefits of the new energy project to be maximized the government must continue to invest and improve the power grid to equip these companies with reliable energy.
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.
It features approximately 200 kilometres of a subsea pipeline offshore that will run from Liza Destiny and Liza Unity floating production, storage and offloading (FPSO) vessels in the Stabroek Block to the shore. Upon landing on the West Coast Demerara shore, the pipeline would continue for approximately 25 kilometres to the NGL Plant at Wales, West Bank Demerara.
As of January, this year, the marine offloading facility has been completed, and 26 kilometres (km) of onshore pipelines have been installed. Once completed, the project will allow Guyanese to benefit from 50 per cent reduced electricity costs. As it is now, the demand for electricity has been steadily rising.