Patterson says Jagdeo misled nation on Gas-to-Shore project

May 01, 2021 News

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…Says it is not economically, environmentally sound as presented
…will leave Guyana saddled with largest PPP white elephant

Vice President, Dr. Bharrat Jagdeo, this past week misled the nation when he provided a briefing on his administration’s much vaunted gas-to-shore project and has in fact, not disclosed the truthful figures on the financial and economic impact on the country.

To this end, the Alliance For Change (AFC), in rubbishing the sentiments expressed by Vice President Jagdeo, is calling for more studies to be done on the initiative, before the country is left with the greatest and largest People’s Progressive Party (PPP) ‘white elephant.’
These views were expressed by the Opposition’s Shadow Minister for Oil and Gas, David Patterson—himself a former minister with responsibility for the sector—during a party press engagement on Friday.
Pointing out that the PPP administration has in fact acknowledged the depth of the studies done by the coalition administration, Patterson accused the Vice President of ‘cherry-picking’ aspects of the studies, that lends support to the PPP’s position and more so, its choice of the Wales, West Bank Demerara (WBD) site for the termination point for the pipeline.
According to Patterson, none of the studies that were referenced by the Vice President in his presentation on Monday last, as the basis for moving forward with the project, support landing the pipeline at Wales, nor are they in agreement with the costs being put forward by the gas-to-shore working group.

Patterson in fact disclosed that while the Wales location was among 10 other sites examined, that location was in fact rejected and had suggested selecting a site closer to the shoreline, which would in fact be far more cost effective.
Rejecting the US$900M price tag that is being promulgated by Jagdeo and the gas-to-shore working group, Patterson quickly pointed out that the figures referenced by the Vice President does in fact ignore key spending, including amounts for the actual power generation plant.
According to Patterson, the figure for the project is closer to US$1.25B.
He said in his remarks that the project cost provided by Jagdeo, “is exclusive of the cost of the power generating plant as well as transmission of the power to GPL (the Guyana Power and Light Inc.).”
According to Patterson, the studies utilised by the PPP, lists the cost for the power plant and the transmission line to be US$240M and US$85M respectively, “which would make the total project cost approximately US$1.25B.”
According to Patterson, “this is an astonishing sum which will be added to Exxon’s cost recovery total during the next five years.”
As such, he posited, it “would further delay the opportunities of our country’s citizens to benefit from our natural resources.”
Speaking to additional flaws in the reasoning proffered in support of the gas-to-power project, the former government minister told media operatives that the Vice President’s assertion of a 20 year-life span for gas to be had from the field is in fact incorrect.
He told media operatives it was established that collecting the associated gases from the Liza I field at 35 million cubic feet per day would give the project a lifespan of about 18 years, while using the amounts referenced by Dr. Jagdeo—50 million cubic feet per day—could only be sustainably had or guaranteed for some 11 years.
Dismissing any current decisions on the gas-to-shore project as premature, Patterson also addressed the fact that the Vice President was also misleading on the uses of the excess gas to be had, above what is needed for power generation.
He explained saying, the PPP administration claims that urea would be a by-product at the stated volumes of gas of 50 million cubic feet per day, but “this claim is not supported by any of the studies.”
According to Patterson, the studies in fact state that for urea production, a minimum excess of 70 million cubic feet per day will be required.
As such, he reminded that the projected excess of gas after utilisation for power production is calculated at 15 million cubic feet per day, “which makes it uneconomical and impractical, yet the PPP has used this promise as one of their justifications for moving ahead with the gas-to-shore project.”
Accordingly, Patterson re-iterated that more studies are needed on this project’s concept.
He noted to that in justifying pursuit of the project, “…the PPP has presented a proposal to install an LNG (Liquefied Natural Gas) plant which it claims will produce approx. 3,400 barrels a day.”
Patterson noted however that Guyana’s total domestic consumption of LPG (Liquefied Petroleum Gas) is approximately 2,000 barrels a day.
He said, “…they (PPP) have decided on a plant without the provision of any plan for utilisation of the excess volume; the study clearly states that exporting a small amount is not economically viable.”
Patterson used the occasion to recall too, that the coalition had been exploring, using a revived public transportation system in order to use the limited excess gas in order to make the investments feasible.
Additionally, Patterson noted, “…What should be of great interest to the Guyanese public is that using these same studies the Coalition government planned to deliver a project that produced 188MW of power plus 2,200 barrels of LNG daily for a price tag of under US$600M – half the amount that the PPP is demanding, and they have shown no additional value as a justification for these huge increases in expenditure.”
He reiterated that the project appears to be the typical “money for the boys.”
Patterson noted too that the Coalition had based its decision to utilise the lower quantity of 30 million cubic feet of gas per day, “not only because of cost but more so, because of our commitment to transition the country to one hundred percent renewables by 2040.”
According to Patterson, the Power Generation Study completed by the Coalition, provided a roadmap to this transition, “with the introduction of a mid-scale hydro plant project by 2030.”
As such, “the decision to expend an additional US$600M at the expense of six years guaranteed gas supply is quite frankly – voodoo economics.”
He was adamant, “we therefore demand that further detailed studies be conducted before the country is saddled with its largest ever PPP white elephant.”

 

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