Gas-to-energy project will bring desired benefits to all Guyanese – President Ali
Guyanese can now raise their expectations for cheaper, more reliable electricity as the highly anticipated gas-to-energy project is one step closer to realisation.
His Excellency, Dr. Mohamed Irfaan Ali said the multibillion-dollar project is geared at slashing electricity costs by at least 50 per cent, with massive cuts in fuel prices and electricity output by producing companies.
Outlining the project to representatives of ExxonMobil, the local private sector, and cabinet members at State House on Thursday, President Ali said the project has gone through immense levels of scrutiny.
“There are detailed studies and work that went into arriving to where we are at today. This is not guesswork. This is work that is based on the best possible existing information and data,” he noted.
In his detailed address, the President said the construction of the multifaceted project is linked to massive benefits for all Guyanese.
“At the end of this, the electricity generation cost is projected between 4.5 cents per kilowatt-hour…this 4.5 cents per kilowatt-hour includes paying back for the pipeline, the NGL facility, the power plant, and also the operational costs…in this model, the gas in this phase comes to the government, and the people of Guyana free of cost,” the President highlighted.
With just around 220,000 households connected to the grid, and with the Guyana Power and Light Inc. (GPL) raking in almost $40 billion in revenue, the establishment of the project will cut revenues in half, returning $20 billion into the pockets of Guyanese.
The President said that this too, will be widely appreciated by the private sector, as tremendous benefits will emanate.
“And the private sector people understand this. That is $20 billion of revenue that will now be freed up, and made available to be spent in the economy and expand the acquisition of goods and services,” he detailed.
Moreover, retail prices around the country for a 20-pound cylinder of Liquefied Petroleum Gas (LPG), better known as ‘cooking gas’, is approximately $4,500.
According to the President, the annual value of the LPG market stands at $10.1 billion. Through the project, the gas price will be substantially less.
“We are not going to tell you about a pie in the sky that is unsustainable, like free cooking gas for every single human. That is unsustainable…I am telling you about delivering cooking gas to you…at a price that would save $7 billion of what the market is now. That is $7 billion of savings going back to the household,” he assured.
The Head of State said the project will fit well into the seven-pillar transformational agenda on which the government has embarked. These include; infrastructural, technological, services, energy security, and food security.
The process, according to the President, is at the stage where proposals are expected by September from the nine shortlisted firms.
He congratulated ExxonMobil for being fair in the negotiation stage, seeking a win-win solution.
“I want to thank at this stage, all our partners. I would like to thank the executives and team of ExxonMobil…the partners did not go to the table looking for an all-out victory. They went to the table looking to derive the best possible output for all the stakeholders and I congratulate them for this,” he lauded.
President of Exxon Mobil’s Development Company, Liam Mallon in brief remarks expressed pride for the massive development taking place in the country.
Mallon said the gas-to-energy project on which Guyana is embarking, will bring economic prosperity to Guyanese in all sectors.
“We believe that creating these affordable low emission energy solutions do advance global prosperity…it will have far-reaching impacts across the globe. It really does exemplify that commitment to progressing meaningful development, and at the same time creating lower-emission solutions,” Mallon noted.
“It represents a huge shift from heavy fuel oil to a cheaper, cleaner more reliable energy source for the country that not only will improve the lives of our people here every single day, but will open up significant benefits in the broader economy,” he added.
The gas-to-energy project which is expected to come on stream by late 2024, is expected to reduce Guyana’s energy sector emissions. The project will also cut electricity cost by more than half. The cost has long been regarded by the private sector as prohibitive to investments. Hence, Government expects the gas-to-energy project to revolutionise and to significantly improve the ease of doing business in Guyana.
The coming together of these initiatives is the fulfilment of the commitments made in the PPP/C manifesto to produce more than 200 MW in the interim, from natural gas.