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PPP still to secure funds for notorious US$2B Gas-to-Energy project, one year before 2024 goal
Kaieteur News – The People’s Progressive Party (PPP/C) government has engaged in a lot of fanfare about the notorious Gas-to-Energy project, which it says will cut the cost of power for Guyanese households in half. But despite all that has been said, the project is yet to achieve takeoff.
It is clear that the project is hampered by the fact that the government does not have all the money it needs. Kaieteur News reported in January that out of the G$199.2B (US$955.5M) the government needs for the Gas-to-Energy plants, the transmission network upgrades and the consulting costs, G$134.7B (US$646M) is supposed to come from the United States EXIM Bank, according to budget 2023. This is two-thirds of the cost of the government’s aspect of the project that has not been secured yet.
The government plans to pursue the financing sometime this year. The government appears set on capitalising on a US$2B Memorandum of Understanding (MOU) it signed with the US EXIM Bank in 2022 so Guyana would get help to undertake infrastructure and energy projects.
On the other side, the oil companies have not set aside the requisite funds needed for the pipeline.
According to OilNOW, the President of Esso Exploration and Production Guyana Limited (EEPGL), Alistair Routledge, said since July that the oil companies expect to make a final investment decision on the project before the end of 2022.
EEPGL is ExxonMobil’s local subsidiary and the operator of the Stabroek Block. When oil companies make their final investment decision on a project, it means they have set aside the requisite funds and are ready to move forward with the project. Yet, in the second month of the year, this decision by Esso, Hess and CNOOC has not been made.
They are expected to commit US$1.3B to the project.
When added up, the cost of the project is nearly US$2.3B.
In addition to financing woes, key studies have not been shared with the public. When Opposition Member of Parliament (MP), David Patterson raised questions about the gas leak management plan, Minister of Natural Resources, Vickram Bharrat said that the operator is still conducting studies related to the project.
Prime Minister Mark Phillips when asked about the Gas-to-Energy project during consideration of 2023 budget estimates last week said the government is committed to transparency.
“We will communicate to the general Guyanese public and certainly to the members of the opposite side of the House. This is a project for all of us, all of us will benefit from this project,” the Prime Minister said.
In spite of this, a clear outline of the financing and repayment mechanisms for the benefit of transparency advocates has not been forthcoming.
- eople’s Progressive Party (PPP/C), Gas-to-Energy projec, Government, Memorandum of Understanding (MOU), OilNOW
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