– Chinese, South American firms lead the way
At least five Chinese companies are among 27 firms which have expressed interest in operating the Guyana Power and Light (GPL)’s natural gas-fired power plant, under a 25-year agreement, in Demerara.
GPL, the state-owned electric utility invited technically and financially sound business parties to submit an expression of interest (EoI) for Independent Power Production (IPP) on a build, own and operate 50- megawatt (MWs) Capacity Natural Gas Power Plant.
The EoI period ended yesterday, with senior GPL officials unveiling the names of the companies which responded to the company’s request.
Inside GPL’s boardroom at Duke Street, Kingston, the official documents revealed a large interest from South American states, especially Colombia and Venezuela. Companies in Qatar, Dubai, Trinidad and Tobago, United States and the United Kingdom, also made EoI submissions.
Scope of work for the project comprises all activities necessary to develop, finance, insure, install new plant and equipment, test, commission, own, operate and maintain the power generation facility.
The project also entails the construction of associated substations, fuel storage facility and other related facilities for complete operation, generation and transmission of electricity to the national grid.
Among the requirements for the EoI, was access to competent construction, commissioning, operation and maintenance contractors of at least two similar-sized facilities, a strong balance sheet with a minimum capital of US$25 million, audited financial statements for the last three years and a bank credit reference.
Companies were also required to demonstrate the ability to raise funds to undertake a project with a notional capital cost of US$100 million, at competitive terms with a debt/equity ratio within the range of 80%:20% and 70%:30%.
The next phase is for the EoI submissions to be evaluated.
Initially, GPL last September had invited EoI for a 50 MW dual-fuel power plant with a mix of heavy fuel oil and natural gas. The plant was to be built within the specific areas of Georgetown, East Coast of Demerara and the East Bank of Demerara.
The decision by GPL to move in the direction of natural gas only is interesting, given that the coalition government said as recent as last week that it has not decided whether to utilize the excess natural gas from ExxonMobil operations.
Minister David Patterson has disclosed that it is estimated that the natural gas to be produced daily is between 30-50M cubic feet. A portion of that amount is to be re-injected into ExxonMobil’s operations with the remaining amount to be disposed of or likely utilized by Guyana.
Patterson stated that at this time the Government remains focused on continuing developmental work based on a specific location for the landing of the natural gas pipeline.
The Minister, who is part of the Government team of Cabinet members overseeing the developing of the oil and gas industry in Guyana, disclosed that indeed the administration is exploring the commercial use and development of natural gas. The current assessments being done are both for downstream power generation through the development of a new power generation facility – and as a medium to long-term investment opportunity.
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