Latest update June 2nd, 2023 12:49 AM
Mar 27, 2023 News
…K/News Publisher demands proof initiative will not sink country into debt trap
Kaieteur News – ExxonMobil in a full page advertisement published in the Sunday edition of Kaieteur News sought to promote the US$2 billion Gas-to-Energy, citing the initiative as a means to improve local healthcare.
According to the advertisement, “Reliable energy can open up massive opportunities to diversify and strengthen Guyana’s economy and support service improvements. Any doctor will tell you that hospitals and healthcare facilities can always use more resources, and that effective healthcare is dependent upon a reliable source of energy.”
The oil company also noted, “affordable energy can power computers and diagnostic equipment and help raise the level of care for patients. Through the Gas-to-Energy project, ExxonMobil Guyana is helping to support affordable, reliable energy for Guyana that can open up so many new opportunities for everyone.”
What the oil company did not outline however, is the probability of the project affecting lives and livelihoods, as clearly outlined in the Environmental Impact Assessment (EIA) its consultant, Environmental Resources Management (ERM) conducted. That study was done for the 12-inch pipeline and Natural Gas Liquids (NGL) facility that will process the resource to generate some 300 megawatt of electricity.
The document states, among other things in the Environmental Impact Statement (EIS), that the project may “impact resources outside the NGL Plant boundary included a boiling liquid expanding vapor explosion (BLEVE), a flammable gas cloud, and a jet fire.” These can be caused by a hydrocarbon release at the NGL plant. Explosions and gas leaks along the pipeline are also likely, thereby exposing citizens to potential danger from the toxic releases.
ExxonMobil Guyana (Esso Exploration and Production Guyana Limited- EEPGL) was nonetheless granted a Permit by the Environmental Protection Agency (EPA) on November 25, 2022; to commence the construction of the pipeline that will be used to transport natural gas from the offshore Liza Fields in the Stabroek Block, to the Wales Development Zone on the West Bank of Demerara. Another application is presently before the EPA being processed for the power plant.
Where is the proof?
Since the inception of the controversial project, citizens have been demanding that an updated feasibility study be conducted. In the absence of such a study, government is still confident in its ability to reduce the cost of electricity. In this regard, Publisher of the Kaieteur News, Mr. Glenn Lall is now challenging the oil company to present proof of the project’s viability, since it took on the role of publicly promoting the venture. Lall said, “What guarantee is Exxon giving Guyana that electricity bills will cut in half? What guarantee do we have from Exxon that this Wales project will better medical facilities in Guyana?”
Importantly, the newspaper publisher queried, “will Exxon stand the responsibility of its failure; meaning would they reimburse Guyana for the US-billions we are earmarking for this project?” “Don’t sell us dreams and put us into debt traps like the African countries, show us the proof that this project will be beneficial to Guyana and its people. That’s all the nation is asking for,” he added.
It was reported last month that Guyana will be saddled with an annual debt of US$106 million annually for 20 years to cover the costs associated with developing the GTE project. This was revealed when Head of the Project, Winston Brassington offered an update during the International Energy Conference and Expo, hosted at the Marriott Hotel in Georgetown. Based on his presentation, it is now clear that the project will cost US$2.1 billion (GYD$424 trillion). This is more than half of the country’s total debt, according to statistics from the end of 2022. These statistics show the country’s total public debt stood at US$3,654.9M at the end of last year.
Brassington explained that Guyana will be required to pay back ExxonMobil some US$55 million each year for 20 years to repay the company for its investment in the pipeline. “That US$55 million is the amortized cost of US$1 billion for 20 years at a discount rate,” he said.
In addition to this, Guyana will also be expected to repay another US$51 million annually for 20 years on a loan the country will take to pay for the Natural Gas Liquids (NGL) facility and the 300 megawatts power plant. Brassington explained, “The government is funding the power plant and the NGL plant and the EPC contract price, which is a lump sum fixed price is US$759 million (or) US$760 million. We allocated this based on the pricing at about 63 percent of US$477 million to the power plant and US$282 million to the NGL facility.”
“Now if we were to amortize the US$759 million over a 20 years period at three percent, that annual payment would be about US$51 million,” he added. These costs are not the final investment for the project however as the Government of Guyana (GoG) is gearing to pay out $400 million to land owners who would be affected by the 12-inch pipeline that will be used to transport the natural gas.
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