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Gov’t to use other funds for Gas-to-Energy project until U.S. approves loan – Jagdeo
Kaieteur News – The Government of Guyana (GoG) does not intend to allow delayed financing from the United States Export Import (US-EXIM) Bank to stall the highly touted Gas-to-Energy (GTE) project, this is according to Vice President, Bharrat Jagdeo.
During his weekly press conference on Thursday last at Freedom House, Robb Street, Jagdeo said that the loan has not yet been approved, but government is confident that the green light will be given soon. To this end, he explained, “If there is need for, we can have bridge financing until that comes on stream and from what I gather, the loan can fund retroactive expenditure so if you have bridge financing then you can go back and clear it easily once the loan comes on stream.”
Jagdeo told reporters that President Irfaan Ali met with the President of the US-EXIM Bank during his recent visit to the United States. While providing an update on the state of financing for the massive gas project, the VP said, “President Ali met with the President of EXIM Bank and (had) really good discussions. It’s moving forward. It’s moving apace.”
Vice President, Bharrat Jagdeo
He was keen to note that though the loan has not yet been approved, there will no impacts to the stipulated timeframe for completion, December 2024. The GTE project entails three components, a 12-inch pipeline that will transport the gas from the Liza One and Liza Two fields in the Stabroek Block, as well as a Natural Gas Liquids (NGL) facility that will treat and separate the resource; a portion will then be utilized to generate some 300 megawatts (MW) of cleaner electricity.
ExxonMobil, the operator of the Stabroek Block will be financing the pipeline aspect of the project, while government is seeking to finance the other two components through the loan agreement with the US lending institution. While the project has the potential to supply the nation with a cleaner, more reliable source of power, it has been subjected to criticisms, given its astronomical price tag, backed by no feasibility study.
Government has said the pipeline aspect is expected to cost US$1B, while contracts have been inked for the gas plants at a cost of US$759 million. Other costs to support the project include land acquisitions by the state for the pipeline and transmission and distribution costs. A damning international report by the Institute for Energy Economics and Financial Analysis (IEEFA), a US think tank has pointedly underscored that going solar is a less costly alternative to the gas project.
Kaieteur News reported on Sunday that in the report, co-authored by Tom Sanzillo, Director of financial analysis for IEEFA and Cathy Kunkel, an Energy Consultant at IEEFA, it was explained that distributed (rooftop) solar power provides an alternative to the gas-to-energy project that can be built out in small increments to avoid overbuilding the generation system.
The experts stated that a rooftop solar and storage system consisting of 2.8 kilowatts (kW) of solar panels and 10 kWh of battery storage would be more than sufficient to meet this level of current and projected consumption, producing approximately 368 kWh per month. “We estimate that such a system would cost approximately US$7,800,87 and would generate power at approximately 15 cents/kWh less than the cost of GPL’s current rates (20 cents/kWh for residential customers) or of a diesel generator,” the IEEFA experts said.
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