Wales gas project could cost over US$3B - Patterson

Wales gas project could cost over US$3B – Patterson

Jan 29, 2023 News

Kaieteur News – The Gas-to-Energy (GTE) project was initially pegged at US$700M when it was first conceived under the A Partnership for National Unity + Alliance For Change (APNUAFC) Coalition government. The cost has now jumped to US$2B even though the same components remain in place, with the exception of changes to the location.

Highlighting this in the National Assembly on Thursday was Shadow Minister of Natural Resources, David Patterson who also warned that this venture may very well cost more than US$3B when other costs have been factored in for the acquisition of lands and associated infrastructure.

Shadow Minister of Natural Resources, David Patterson

This newspaper has attempted on several occasions to ascertain from government the cost attached to the lands being acquired to facilitate the 12-inch pipeline that will be used to transport the natural gas from offshore to Wales, West Bank Demerara (WBD).

On January 16 when the Budget was read in Parliament, Kaieteur News requested the information from Attorney General, Anil Nandlall S.C who said he did not have the figures on hand. He said too that the process was still ongoing and that some residents have accepted alternative plots of land for their property along the pipeline route. Nandlall said he would share the details once the process is completed.

The Government of Guyana between January 4 and 6 this year commenced the issuance of Orders in the Official Gazette for the acquisition of lands for its Gas-to-Energy (GTE) project.

In the public documents, it could be understood that the Administration will be acquiring a total of some 70.6 acres of lands between Crane, West Coast Demerara and Wales, West Bank Demerara.

In the meantime, Patterson told the National Assembly that this project is unlikely to deliver electricity at a lower cost, similar to that of the Amaila Falls Hydro Power Project (AFHP).

“In similar fashion to the AFHP, the PPP has announced that when completed, this project will deliver power at a cost of US5¢, based on the costs for the pipeline, and the power plants, but have excluded costs for land acquisition, GPL infrastructure and as well costs associated for providing redundancy (fuel storage/wharves/etc.) – if these are added, the total project costs will be well over US$3B,” The Opposition Member of Parliament (MP) argued.

At the same time, the former Minister of Public Infrastructure pointed out that the country is still in the dark as it relates to the gas agreement inked with the contractor, ExxonMobil; the costs associated with the operations of the Natural Gas Liquids (NGL) and power plant; the necessary transmission grid upgrade; transmission lines crossing over the Demerara River; Gas dispersion Patterns in the event of any gas explosion and more importantly, Insurance and liability coverage among others.

With several factors still missing from the equation, Patterson said the government still wants the people of Guyana to accept that this will not be another white elephant project just as the Skeldon Sugar Factory and the Fibre Optic cable project. These projects saw billions in taxpayers’ dollars spent to no benefit of the population.

The GTE project has 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. Exxon’s pipeline so far is expected to cost US$1.3 billion, while the other two aspects- being pursued by government- are now pegged at US$759M.

Government said the venture will lower electricity costs by 50 percent, however independent analysts have said this may not be possible due to the increased price tag of the project.

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A Partnership for National Unity + Alliance For Change, David Patterson, ExxonMobil, gas, Gas-to-Energy (GTE), Parliament, Patterson, Shadow Minister of Natural Resources, Wales, West Bank Demerara (WBD)

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