Latest update January 17th, 2025 6:30 AM
Govt. hoping US$2B natural gas project does not explode – Jagdeo
…says “other” revenue streams will be used to service US$106M annual payment on loans
Kaieteur News – A question from this newspaper on how Guyana would manage to repay US$106 million annually for the Gas-to-Energy (GTE) project over the next 20 years, should an unfortunate incident- such as an explosion- render the facility inoperable, no doubt caught Vice President (VP) Bharrat Jagdeo by surprise.
Not only was he unprepared for this line of questioning, but he also became very apprehensive in his response.
The VP yesterday hosted his first press conference since the commencement of 2023 to offer an update into his recent trip to India.
Vice President Bharrat Jagdeo
Jagdeo was however asked by this newspaper to enlighten the nation as to how the gas project would be repaid for should there be an incident when he responded, “can we get out of this morbidity, is Kaieteur News a morbid? Imagine we must not build the power plant because we might have an explosion there. This is in effect what you are saying…which government starts off by… anywhere in the world… by saying that oh we are not going to pursue a development or we are gonna make mitigating plans to pay back a facility if we have an explosion?”
He continued, “Nobody builds a facility on the basis of that. Nobody builds a facility on the basis of future explosion.”
The Vice President then went into detail to regurgitate the benefits of the project, insisting that once operational, some 300 megawatts of electricity will be available to the national grid.
Not only that but he explained the cost of power will also be reduced by 50 percent. In addition, the VP reminded that Guyana will be able to export cooking gas and other liquids that will be available from the Natural Gas Liquids (NGL) facility to be constructed.
He is adamant that the sale of the liquids will be able to pay off the investment for the project, however government is hoping that the facilities will remain functional to ensure it is able to service its annual loans.
Guyana will be paying U.S oil major ExxonMobil some US$55 million each year for 20 years to repay the company for its investment in the pipeline. In addition to this, Guyana will also be expected to repay another US$51 million annually for 20 years on a loan the country will take to pay for the NGL facility and the gas-fired power plant. This amounts to an annual debt of US$106 million.
The former Head-of-State argued, “But what if anything happens tomorrow? What if the existing power plant we took a loan for what? Let me say something else, if we had a loan in GPL and the GPL blows up tomorrow, what are we gonna do? We’d have to repay the loan through some other means, the existing means.”
Jagdeo continued, “How can a government operate on what ifs? We are hoping that we, in these issues nobody builds anything.”
He even sought to put in perspective that if the Publisher of this newspaper, Mr. Glenn Lall was considering an unfortunate incident, he may not have “put up that big building” but if it were to collapse, the loan would be repaid through another source.
As such, he contended, “You can’t build these things, it’s a morbid, you’ve run out of things on the gas to energy now we gone to if what if it breaks up? What if it falls in the sea? What if the pipeline gets a little hole there…I can’t understand it, when are we gonna end with this morbid, sour kind of approach here all the time?”
The GTE project entails three major aspects, that is, the pipeline to transport the gas to Wales, the NGL facility that will treat and separate the gas, and the power plant to generate the electricity.
There has been no updated feasibility study since the cost of the project jumped from US$478 million to over US$2 billion.
A Guyanese engineer, Fitzroy Fletcher, with over 50 years of expertise has so far challenged each aspect of the project, insisting that its viability is simply no longer relevant owing to the mammoth increase in cost.
He explained, “The pipeline costs have escalated too much and have made the project no longer feasible. Clearly, we should go back to the drawing board and rethink the whole project. It is certainly not beyond our ingenuity to find a solution, with the help of carefully selected international experts.”
Fletcher believes government’s figures “appear to be figures drawn out of a hat, and wishful thinking.” See link below for more.
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