Govt. nor Exxon made final investment decision on Gas-to-Energy project

Dec 27, 2023 ExxonMobil, News, Oil & Gas

As 2023 nears closure…

Kaieteur News – The final investment decision (FID) on the Gas-to-Energy project remains unmade, just months before the year the project was initially intended to be delivered, casting uncertainty on its timeline and execution. The lack of an FID prevails as the country persists through energy challenges, marked by frequent blackouts and an unstable power supply.

The Gas-to-Energy project, a cornerstone of the People’s Progressive Party Civic (PPP/C)’s energy strategy, initially promised to deliver power by 2024. However, recent disclosures from a public request for proposals (RFP) related to the Amaila Falls Hydropower Project indicate a shift in the project’s startup to 2025. This postponement signifies a longer wait for the Guyanese public, who expect a reduction in power costs as part of the PPP/C’s 2020 elections manifesto.

Central to the project’s delay may be ExxonMobil’s yet-to-be-announced FID on the project. ExxonMobil is tasked with installing the pipeline to transport gas from its offshore operations to the power plant at Wales. Some installation activities have commenced, despite the absence of a formal investment decision. Alistair Routledge, ExxonMobil’s Country President, has indicated that the decision is forthcoming, though it was expected in 2022. Now, 2023 has almost ended, but no one has explained the reason for the delay.

The government faces its own challenges in financing its aspect of the project. It is responsible for upgrading the transmission system and establishing an integrated gas processing facility at Wales, which includes a power plant and a natural gas liquids (NGL) facility. A significant portion of the funding is anticipated from a loan of US$660M from the United States Ex-Im Bank. Vice President Dr. Bharrat Jagdeo revealed that while awaiting the loan’s approval, bridge financing might serve as a temporary funding source, and that the government also has contingencies in the case of the loan request not being approved. However, during his most recent press conference, Jagdeo said Guyana has been assured that the US Bank’s loan is forthcoming. In the meantime, early development works at Wales are being funded by a US$100M withdrawal from Guyana’s treasury.

The Gas-to-Energy project, expected to add 300 megawatts (MW) of power to Guyana’s grid, is a crucial component in addressing the country’s power generation instability. The Guyana Power and Light Inc. (GPL) has been struggling to meet the increasing power demands, exacerbated by rapid economic growth and higher temperatures. The project, planned to utilise natural gas from the Stabroek Block, involves substantial financial investment, with total costs, including the pipeline and gas processing facility, estimated between US$1.8 billion and US$2 billion.

Recent developments in the project include GAICO Construction and General Services Inc. announcing the completion of the materials offloading facility (MOF) and the ongoing laying of 26 kilometers of onshore pipelines.

Further, the US-based CH4/Lindsayca is contracted to construct the integrated facility which includes the power plant, a project estimated at US$759M. The government is also investing GY$5B for project management, supervision expenses, and upgrades to Guyana’s transmission and distribution network. Kalpataru Projects International Limited (KPIL), an Indian company, has secured a US$159M contract for the development of transmission lines and substations, aiming for completion by 2024.

cornerstone, Exxon, gas-to-energy, investment, Wales gas-to-energy project

Latest News

Govt. nor Exxon made final investment decision on Gas-to-Energy project

As 2023 nears closure…

Related

Similar Articles

The Glenn Lall Show|| April, 14th, 2025

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Baksh half century inspires Herstelling’s 50-run victory

CARIFTA Games athletes depart for T&T

Shattas meet Botafago, Capital FC battle Milerock...

Dujon remembers Pydana – former Guyana and West...

St. Rose’s crowned Georgetown champions in...

Guyana’s Seon Bristol and Dexter Patterson...

Features/Columnists

Hope is what you rely on when you do not have a plan

Collaborative Government–Private Sector Action Imperative for a Resilient Trade Future

Politicians in houses of worship

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]

Govt. nor Exxon made final investment decision on Gas-to-Energy project

As 2023 nears closure…

Share this:

Related

Similar Articles

The Glenn Lall Show|| April, 14th, 2025

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Features/Columnists

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]