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Multibillion gas-to-shore project is “all craziness” – Ramon Gaskin says
: Transparency advocate and economist, Ramon Gaskin.
Kaieteur News – When asked by Kaieteur News during an interview to share his thoughts on the multibillion gas-to-shore project set to land at Wales, transparency advocate and economist, Ramon Gaskin, vehemently said that the entire development is “all craziness!”
During the interview yesterday, Gaskin premised his stance on his belief that the project is simply “not economically feasible.” Gaskin observed too that the People’s Progressive Party/ Civic (PPP/C) government is yet to publicize the analysis it had conducted to support the viability of the project.
Notably, preliminary reports that were done by the previous administration on the feasibility of bringing gas to shore from the Liza Phase One Project reveal that an offshore pipeline is estimated to cost between US$165 million and US$270 million to build, depending on the size and landing site location. As for the onshore compression and separation of the Liquefied Petroleum Gas (LPG), this is estimated to cost between US$43 million and US$114 million. Also, distributing the natural gas to the various electricity generation locations is estimated to cost between US$95 million and US$127 million depending on the landing site selected.
“So the cost to land the pipeline and build the infrastructure is roughly about US$400M. That is a hefty sum of money. And when you invest all of it how much power are you going to receive, and most importantly, what are you going to do with all that power once it has been produced?” Gaskin questioned.
Guyana is expected to handle the costs for the infrastructure of onshore facilities while ExxonMobil would take care of the offshore aspect of the project but all costs based on the terms of the Stabroek block PSA would be recoverable. Guyana would also have to pay ExxonMobil for the transportation of the gas, but that price is still being worked out between the oil giant and the PPP/C Government.
Specifically, in October last year, the government had said that it is negotiating the price for the gas that would power a 300MW power plant. It has said too that its appointed task force on the matter “will decide whether we will do a private/public partnership (PPP) or build, own, operate and transfer (BOOT) arrangement, or whether government will fund it totally.”
Once the price is settled, ExxonMobil will not only be able to recover all costs incurred on realizing the project, but it will have another cash cow on its hands.
Gaskin also challenged the decision to land the project at Wales on the West Bank of Demerara (WBD) and questioned what prompted the selection of that site. Rather than funnelling money into this project, the economist believes that the government should instead invest in renewable energy, which has been proven to be cleaner and cheaper.
Notably, International Environmental Lawyer, Melinda Janki, has since challenged President Irfaan Ali to provide the nation with evidence that the venture is economically sound. According to Janki in a January 13, 2021 letter to the Head of State, it is critical that this justification be provided to the citizenry in the interests of transparency, accountability and good governance. Towards this end, she has asked President Ali to provide a series of plans which span the economic spectrum of this major project that could cost almost US$400M.
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