Dear Editor,
The financial aspect of the undertaking is indeed a “no-brainer”, as our VP indicated, when one examines the benefits that derive from the gas-to-shore project. It is clear that the potential benefits far outweigh any challenges that may be encountered along the way.
The gas-to-shore project is something that would be beneficial to all Guyana and to every Guyanese. This project would slash the cost of electricity, which would then have spin-off effects in which every Guyanese would benefit. The electricity tariffs in Guyana range between 25 cents and 35 cents per kilowatt hour, and that’s one of the highest electricity costs in the region. This is something that hinders business development and investors coming to Guyana. It discourages multinationals from establishing operations here.
The reason for this high cost is that our country relies heavily on power from generators that use diesel, which is expensive and isn’t effective in producing energy. It is evident through many studies that the gas-to-power project would cut the price of electricity by at least half.
Exxon have completed studies and offshore surveys on the pipeline, and they are ready to work with our PPP/C Government on the plans.
ExxonMobil had completed a technical feasibility study back in 2016, further cementing Government’s position that the project is financially feasible. Such a study assesses the details of how you intend to deliver a product or service to customers.
Back in 2017, a feasibility study was undertaken by the former administration to examine the costs and associated impacts of bringing natural gas to shore by way of a pipeline, and a number of sites were shortlisted for the establishment of a natural gas power plant.
Guyanese must know that there are clear benefits in having a gas-to-shore project for Guyana. It would reduce oil imports and reduce emissions.
Exxon made it clear that there are no technical barriers that exist for piping natural gas from the Stabroek Block to shore for power generation and other applications in Guyana, and the company remains engaged with the Government of Guyana for implementation of the project.
However, with Gross Domestic Product (GDP) expected to triple in the coming years, making this project a reality is key to wealth creation in Guyana. As the use of natural gas to provide energy in Guyana continues to form a major part of our Government’s plans to deliver significant benefits to our country and our citizens, piping gas to shore would allow for flexible power generation, with significantly reduced CO2 emissions at a competitive price, making it a long-term solution to meeting the country’s energy needs, which are expected to have a transformational effect on manufacturing, which would result in the sector becoming more competitive regionally.
With that being said, Exxon have identified, and they are certain they can deliver, the kind of volumes of gas that are needed to support a gas-powered plant, which is about 50 million cubic feet of gas per day. The gas-to-power project, which is a major initiative being undertaken in Guyana, would see a pipeline landing in Wales, where our Government is looking to develop a commercial zone. Among the facilities being considered for that area is a Liquified Petroleum Gas (LPG) plant, LPG is a flammable mixture of hydrocarbon gases used as fuel in heating appliances, as cooking gas, and to fuel vehicles.
In addition to power generation, there are other uses for natural gas, such as the production of feedstock and fertilisers which can be used in the agricultural sector, and for exports.
We will see development of agro-facilities, agro-processing facilities. Guyana will be on the cusp of transformation never seen before. Growth is expected to quadruple, and immense opportunities would be opened up for all Guyanese. The local Private Sector need not look towards only exponential growth, but to organising themselves for evolutionary growth, so that they can be competitive.
Our Government has a national energy plan that is looking at reducing the cost of energy by almost 50 to 60 percent, making Guyana now a competitive area for manufacturing within the region; for packaging and processing and integrating the opportunities in all the islands and communities with our national energy plan.
The piping of natural gas to shore in Guyana for the generation of cheaper power is expected to have a significant impact on the manufacturing and other productive sectors, and reduce the burden of high electricity rates for citizens, while leading to job creation from the establishment of new industries. The number of jobs to be created is approximately 3,000 as a result of those operations.
The question is: “What else do you need to know?” Once the proposed gas-to-shore project comes on stream, Guyana’s electricity costs could be reduced from 30 US cents to six, or even three US cents per kilowatt hour (kWh).
Outsiders are always quick to say, “Oh it’s going to be too expensive; you can’t do it.” Guyanese, we must not always buy that perspective. Let’s look at Norway. It was faced with a similar situation in the early 1970s, today Norway has one of the best gas-to-shore piping infrastructure networks in the world. Norway produces 5,763,408 million cubic feet (MMcf) of natural gas per year (as of 2015) ranking 7th in the world.
Guyana’s oil and gas sector is growing and developing, and we need the types of gas piping infrastructure similar to that which now exists in Norway. This is a matter of priority, and, as Guyanese, we must look very, very seriously before dismissing our gas-to-shore project as undoable in a country like ours, where, theoretically, we have already started to witness a much higher level of GDP per capita. It simply means building this type of infrastructure must be part and parcel of that kind of development and wealth creation for Guyana, making the project economically viable.
Sincerely,
David Adams
