Vice President Dr. Bharrat Jagdeo, during a press conference on Wednesday, confirmed that the government is likely to fund both the establishment of the natural gas liquids (NGL) plant and the accompanying power plant at Wales on the West Bank of Demerara (WBD).
Both plants, in addition to an approximately 250 kilometres (KM) subsurface pipeline that runs from the Stabroek Block offshore Guyana, form the Wales gas-to-energy project.
With the current administration and even regional economists backing this project, Jagdeo noted that the government plans big spending here.
“… we have the option of funding both the NGL plant and the power plant, which we are more likely to pursue,” Jagdeo said.
An ExxonMobil official recently alluded to this.
The government proposes to bring in natural gas produced in offshore oilfields to fire a power plant producing 300 megawatts of electricity- double Guyana’s current production. This is expected to slash the cost of energy and spur manufacturing and industrialisation.
Through the NGL plant, other products such as cooking gas may be produced.
Dr. Jagdeo also touted the transformative capacity of this project, noting that it represents one of the tangible avenues of increasing value from offshore oil production.
The Vice-President emphasised that with this project, there will be “no escalation” in the cost of electricity- even as production increases to meet Guyana’s growing demand.
Power, he said, can be generated for about five to six cents per kilowatt hour (KW/h), compared to the current 30 cents cost.
“In 20 years, we can fix the price of energy without escalation,” Dr. Jagdeo said pointedly.
Estimates for the pipeline are pegged at about US$1 billion, but the actual costs for the pipeline and the plants will soon be known as the projects will go out to tender.
Jagdeo also said the gas transported from offshore will be free. As such, the government will only be paying the costs associated with the pipeline and plants.
An Environmental Impact Assessment (EIA) has been completed following Esso Exploration and Production Guyana Limited’s (EEPGL) request for environmental authorisation from Guyana’s Environmental Protection Agency (EPA).
EEPGL is ExxonMobil’s local affiliate. The EIA considered the impact of the NGL plant and pipeline specifically, though a cumulative impact assessment includes some consideration for the nearby power plant.
The NGL plant is expected to process the natural gas produced offshore to remove other substances (including propane, butane and pentane liquids) for sale to third-party users.
The remaining dry gas would be treated for use as fuel to support the third-party power plant.
The Vice-President also said that Guyana will soon invite bids for a project management group to manage the project on the country’s behalf.
