Latest update March 28th, 2024 12:59 AM
Apr 29, 2022 News
…government continues to downplay importance of study
By Zen Henry
Kaieteur News – The ambitious gas to energy project that is slated for the Region 3 community of Wales is being touted as one of the single most transformative projects that Guyana has embarked on so far.
This project has the potential to provide significant benefits to Guyanese. The country’s major problem when it comes to business, in particular, has always been cost of power generation and its reliability, Minister of Natural Resources, Vickram Bharrat related during an address at Exxon Mobil’s signing agreement to lease a shore base facility from a local company for its Yellowtail and other developments.
Bharrat said that, “That project will deliver cheaper electricity, cleaner electricity and reliable electricity,” to Guyanese, while moving the country forward in its value added sector. Guyana has not been able to access its full value of natural resources since the nation continues to export raw materials, the minister pointed out. He said that the production of processed or value added goods is where Guyana will see real benefits. This gas to energy project will therefore help local businesses to realise that dream and create significant opportunities for goods and services, employment, and also cut the cost of importing goods that can be produced locally, but currently are not.
“So it is a win-win situation,” Minister Bharrat told those at the signing event. “There is no way we can lose from the gas to energy project and from going into value added produce,” he continued.
However, despite this flowery vision of success and development, the natural resources minister is yet to submit any updated information that promotes the 21 plus kilometre gas to energy project as being right for Guyana. Just after divulging his support for the rising US$1.3billion project cost, Minister Bharrat was asked by reporters whether citizens could expect an updated feasibility study that would address the concerns of those unconvinced sectors of society. To this, he responded, “Sometimes we have to look at the benefits of projects too.” After repeating this statement, he further told reporters that instead of recognizing the recently constructed four lane highway, “…you know what they (citizens) are talking about- the eagle. It’s as if they didn’t notice a brand new four lane highway that is easing the traffic congestion on the East Bank and relieving hundreds of people that traverse there every day.”
The Minister’s deflection from the question comes in spite of calls from civil society groups, opposition members, sections of the media and dozens of regional and international experts warning Guyana to be prudent in its bid to move forward with the contentious gas to energy project. What has basically stirred concern with this project is that despite preparatory works on the way, Guyanese are deliberately being kept in the dark as to the total cost of the project, how much citizens will be charged for the gas and its ability to efficiently deliver the product to citizens without indebting them.
So far, what is available is a feasibility study that was conducted in partnership with the Inter-American Development Bank (IDB) under the Coalition administration. The objective of that study which was conducted by international agency, Energy Narrative was to determine the overall feasibility of transporting natural gas from offshore Guyana, building an Natural Gas Liquids (NGL) separation plant and a Liquefied Petroleum Gas (LPG) production plant to market the liquids from the natural gas stream, as well as building a new electricity generation station to use the remaining dry natural gas.
The study found that the project’s financial feasibility hinges on the price of natural gas that will be negotiated between Guyana and ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), a discussion that is said to be ongoing.
As it relates to other aspects of the project, media operatives were informed that the costs were still being worked out, but that did not stop senior government officials from pronouncing on the project’s expected success with Vice President Bharrat Jagdeo calling the project a “no brainer” considering the massive cost cut backs that were expected. During a press conference in February last, he told the media that the pipeline could cost US$500M to US$800M while the power plant could be approximately US$300M, but offered no assessment or study to support those claims.
Taking into consideration predicament that has befallen other oil producing nations, international experts such as Trinidadian Energy Strategist, Anthony Paul, Chatham House Associate Fellow, Dr. Valerie Marcel and most recently, former Director of the Economics Department of the Caribbean Development Bank (CDC), International Economist, Dr. Justin Ram, have urged Guyana to do the right thing concerning the project. While they noted that there were significant benefits for Guyana given the venture’s transformative potential, all the answers rest in that of a feasibility study and Guyana’s ability to bargain for a cheap commodity price. As it relates to government’s contractual pay arrangement with its oil partners, that information is also not available to the public. This information would divulge the pay arrangement between Guyana and its suppliers. For example, if Guyana were to agree to a take and pay contractual arrangement like other oil producing nations, then a feasibility would definitely be necessary to assess the amount of gas the country needs and how much that would be supplied daily to prevent the country from over supplying and having to pay for the gas that it would be unable to utilise.
Last year, Vice President Bharrat held a briefing with media operatives at the Arthur Chung Conference Centre where he told reporters not to record his statements. Since then, no other information has been forthcoming from the government.
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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