Patterson demands Gas-to-Energy agreements be tabled in National Assembly

Nov 01, 2022 News

Kaieteur News – Shadow Natural Resources Minister, David Patterson has requested that any agreements signed by Government regarding the US$2 billion Wales Gas-to-Energy (GTE) project be laid in the National Assembly.

Shadow Natural Resources Minister, David Patterson

His request was submitted on October 18 last to Parliament, ahead of the November 7 Sitting. According to the document seen by this newspaper, Patterson has asked subject Minister, Vickram Bharrat to say whether any agreements have been inked with Esso Exploration and Production Guyana Limited (EEPGL), ExxonMobil’s subsidiary and operator of the Stabroek Block that will be pursuing the project. If the Minister responds in the affirmative, Patterson has already requested that the agreement be provided for scrutiny.

Additionally, the Opposition member has asked the Minister to provide a copy of the Environmental Permit issued to the oil company, if already granted.

In a brief comment to this newspaper yesterday, the former Public Works Minister said the gross lack of transparency regarding the largest financial project ever pursued by the country prompted his request for the agreements to be made public.

Moreover, he said it was recently published that Exxon is moving ahead with the investment after reaching an agreement with Government. To this end, Patterson noted that the country must know the terms Government has agreed to.

He explained, “That agreement obviously has to do with the cost of the project, it has to do with the responsibilities of the different parties and so on, so it should be known publicly what this agreement is so we can know what we are giving away and what we are getting and what Exxon is getting.”

On the other hand, the Shadow Oil and Gas Minister reasoned that this document would also specify which party would be liable for any incidents that may occur. As such he said, “I hope that when we do get it (the agreement), all these questions can be answered.”

So far, Patterson complained that the questionable project has been shrouded in mystery and secrecy. To rectify this, the former Minister said the PPP should honour the request it made while in Opposition for there to be full transparency.

“If you can recall how the PPP and the rest of the country were demanding that the 2016 oil contract be released and that there should be no secrecy in government, this is the same request that we are making now and I would hope that they don’t claim that it’s a confidential agreement because obviously full transparency is what is required,” he said.

In September, members of civil society told Kaieteur News that the agreements for the project ought to be made public even before Government attaches its signature. Economist Ramon Gaskin, Transparency Activist, Dr. Yog Mahadeo and Attorney-at-Law, Elizabeth Deane-Hughes all insisted that mistakes made in the 2016 oil contract must not be repeated in the gas deal with Exxon.

It must be noted that in August this year, Government invited proposals for expert advice on the upcoming natural gas project.

According to the notice published on the Ministry of Natural Resources (MNR) website, part of its budgetary allocation this year will be spent on the procurement of consultancy services for ‘Legal and Commercial Advisory Services and Negotiation Support’ for the massive project.

Among the successful consultant’s job description is to review the draft Gas Supply Agreement submitted by the Stabroek Contractor, provide detailed legal opinion, comments and advice, support the Ministry’s engagements with the contractor during the negotiations stage and document the review process and outcomes.

Consultants had until September 13, 2022 to submit their proposals to the Chairman of the National Procurement and Tender Administration Board (NPTAB).

The duration of the consultancy was expected to be 45 days, commencing around October 10, 2022.

Since the GTE project was conceived, Government has not hosted a Press Conference to address the burning issues relating to the venture. In fact, even as Government’s partner, ExxonMobil revealed that works have already started on the construction of the pipeline to transport the natural gas from the Liza One and Two projects offshore, to the onshore facility at Wales, citizens who live along the pipeline route are left exposed to potential dangers in the absence of insurance to cover any mishaps during that stage of the project.

When Vice President Bharrat Jagdeo was questioned on the subject of insurance at a Press Conference he hosted back in August, he said he believes it is ‘common sense’ for the total cost of the gas project to be decided on before any insurance policy is pursued. In fact, he even debated the need for insurance, prior to the pipeline becoming operational.

The GTE project will entail three components inclusive of the pipeline, a Natural Gas Liquids (NGL) facility to treat and separate the gas and a power plant to generate 300 megawatts of electricity.

The project has a planned life cycle of at least 25 years. Its main objective is to reduce the cost of electricity to 50 percent of what it is. Exxon’s pipeline so far is expected to cost US$1.3 billion, while Government anticipates the other two aspects would cost an additional US$700 million.