By Mark DaCosta- This article is the first leg of our two-part exploration series, we will examine the details of the People’s Progressive Party (PPP) regime’s Gas-to-Energy project – a controversial venture that elicits both promises on the one hand, and skepticism on the other. This – Part I of the series – aims to educate fellow Guyanese about the project’s objectives and benefits as claimed by the PPP and ExxonMobil, with Part II scrutinising the criticisms, objections, questions, and alternate perspectives.
At the heart of the grand initiative is the establishment of massive infrastructure, ushering natural gas from the offshore Stabroek Block’s Liza oilfield to an integrated gas processing facility at Wales, on the West Bank of Demerara. The project, spearheaded by ExxonMobil and the PPP government, envisions delivering natural gas liquids (NGL) and dry gas to benefit our nation, the PPP says.
A significant subsea pipeline, bridging the Liza field and the onshore pipeline at the West Coast of the Demerara River, forms the backbone of this ambitious project. The integrated facility at Wales is poised to host a natural gas liquids (NGL) processing plant and a 300-megawatt power plant. The PPP and ExxonMobil say that this promises a sustainable source for domestic electricity.
ExxonMobil Guyana, tasked with the offshore pipeline, collaborates with the Guyana government, responsible for the integrated facility at Wales. The colossal financial investment, reaching approximately US$1.8 billion, includes ExxonMobil’s expenditure on the pipeline and ancillary infrastructure, with a US$759 million contract for the integrated facility awarded to CH4-Lindsayca.
The PPP regime justifies this grandiose undertaking by highlighting the dire need to alleviate our country’s soaring electricity rates, among the highest in the region. The Gas-to-Energy project is touted by the PPP as the beacon of change, promising to slash power costs by a remarkable 50 percent.
While replacing imported heavy fuel oil with our natural gas is hailed by the PPP as an environmental triumph, the PPP further claims plans to offer cooking gas and fertilisers at reduced rates to local consumers. Head of the Gas-to-Energy Task Force, Winston Brassington, outlines a financial model wherein the government commits to an annual payment of US$55 million to co-venturers for 20 years.
The PPP regime claims the Gas-to-Energy project will be a game-changer, but with a cynical eye, we ponder the validity of these assertions. The quoted cost of US$1.8 billion appears staggering, prompting questions about the feasibility of this colossal investment, especially when considering our nation’s economic context and capacity.
The promise to cut electricity costs by 50 percent raises many eyebrows, and one must wonder about the distribution of these benefits among our nation’s citizens. Will the ordinary Guyanese truly experience the proposed reduction in power bills, or will the gains be confined to select pockets and Louis Vuitton bags in Pradoville?
As we conclude Part I of our series, it’s essential to acknowledge and understand the PPP’s narrative regarding the Gas-to-Energy project. However, Part II will illuminate the other side of the story, scrutinising expert criticisms and alternative perspectives. Stay tuned as we explore the ins and outs of this ambitious project, weighing its potential impact – positive or negative – on our Guyana’s future.
