Jun 29, 2022 News
By Davina Bagot
Kaieteur News – Two weeks ago, Vice President Bharrat Jagdeo held a press conference where he used estimates to convince the media and viewers of the live broadcast that the US-multibillion gas-to-energy project will slash electricity costs by half. He gave this assurance even though the final cost for the project has not yet been solidified. To this end, transparency activist, Ramon Gaskin, has said that the leader must show the country the feasibility study, rather than use assumptions to force the project.
Gaskin gave this view during a recent interview with Kaieteur News.
He argued, “A billion dollars is a lot of money and we don’t have the details on it. Who is paying this billion US for the gas-to-shore? Who is making the money? Who is paying the taxes? Where is the agreement? Where is the numbers? We don’t have any information sufficient to really study this billion dollar gas-to-shore deal.”
The transparency activist also factored in the Amaila Falls Hydropower Project, in which the government of Guyana was looking to have a Chinese contractor Build, Own, Operate and then Transfer (BOOT) the project to the state. The Chinese investment was pegged at US$750 for 165 megawatts of electricity. Gaskin told this publication, “Similarly, the US$750 million Amaila deal, we don’t have the information on it and the Chinese walked away from it the other day on the BOOT arrangement…US$750 million for a 165 megawatts would never be feasible in this country because the cost of this thing is five times the cost of regular energy and if we have to buy energy at five times the cost, the electricity cost will be more than double any time of the day.”
He added, “This whole nonsense that the electricity rates would be down by 50 percent and cut in half is just nonsense. We haven’t seen the numbers…and now they want to talk about a billion US for over 200 megawatts all of which is craziness. In any proper country, you would get a medical doctor to examine their brains for lunacy cause most of them are mad people.”
The activist told Kaieteur News that the government must not keep the figures and details of the gas-to-energy project a secret but must produce the feasibility study to assure the public of its benefits.
Two Wednesdays ago when Jagdeo was questioned about the feasibility of the project by the Publisher of Kaieteur News, Mr. Glenn Lall, he explained that government is currently estimating how much it could gain from the venture, as no solid figure has been determined as yet.
The gas-to-energy project will encompass three major aspects, that is, the pipeline to transport the gas to Wales; the Natural Gas Liquids (NGL) facility that will treat and separate the gas and the power plant to generate the electricity. So far, Guyanese have been told that the pipeline aspect, which is being pursued by US oil major, ExxonMobil, will cost around US$1.3 billion. Even this is expected to increase when Exxon closes critical contracts for same.
The costs for the other two facilities had not been disclosed, prior to Jagdeo’s press engagement.
In addition, the public was told that a fee would have been attached to the transportation of the gas but the VP has since clarified that the natural resource will be supplied free of cost.
It must be noted, however, that the Guyanese public will be saddled with the debt for the gas-to-energy project over a 20 year period, to repay the investments made. The repayment will be done via their monthly electricity bills based on the overall cost for the venture. But since this cost has not yet been finalised, the cost of electricity too is still in limbo.
The VP shared, “We are doing estimates. We are saying one billion dollars now for the pipeline. That is where we run the numbers. So assuming it comes in at US$900 million, then if it comes in that will come down; the US$1.6 cents will come down to about US$ 1.4 cents so it comes down lower. If it goes to US$1.1 billion, it may go to US$1.7 cents…that’s just the pipeline part…then if you estimate the power plant and the NGL facility to be about US$700 million… that will add another one point something cents per kilowatt hour.”
VP Jagdeo said that if one were to consider estimates for paying for the pipeline, NGL and power plant, it can come down as low as four cents to about five cents per kilowatt hour. He said this would be paid back over 20 years.
He was keen to note that while the five US cents per kilowatt hour may be the cost to generate the electricity, another five cents may be lost in the transmission and distribution of the power, which could take the final price for the sale of the electricity to about US$0.15 cents, after adding five US cents as profits for the company.
The VP boasted that even though these numbers have not been confirmed as yet government will still be left with the other liquids from the NGL facility such as cooking gas, which will rake in additional revenue.
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