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More detailed studies needed to ensure GTE project is not Guyana’s biggest white elephant – Patterson
…cites constantly moving deadlines, ballooning costs
Chairman of the Alliance For Change (AFC), David Patterson
Kaieteur News – The Government of Guyana should conduct additional detailed studies into the infamous Gas-to-Energy (GTE) project to prevent it from becoming the country’s biggest white elephant, Chairman of the Alliance for Change (AFC) and spokesperson for the party on oil and gas, David Patterson said.
Patterson told reporters on Friday, during the AFC’s weekly press conference, that the latest saga surrounding the government’s “flagship” project is further confirmation that it is being poorly planned and executed.
He reminded that the project was launched in 2021 at the State House in the presence of the diplomatic community. Its initial price tag stood at US$900M with a completion date of September 2024.
“On April 30, 2021, the Alliance For Change warned the country that the project proposed by the PPP was not economically, technically or environmentally sound or sustainable, the promises reduction of US$0.05 per MW was based on “voodoo economics” – we further urged the PPP to conduct further detailed studies before the country is saddled with the largest ever PPP white elephant project,” Patterson stressed.
He said that within the last four years, instead of taking the cautious route, the government has instead chosen to “recklessly plough ahead with this project, completely disregarding all warning signs, launched personal attacks against any citizen or political party who dared questioned what was plainly obvious to entire nation, a project that was failing.”
The projected final cost of the project now stands at over $US2.4B and it continues to climb, an increase he estimated to be over 170%. In addition, the completion date has moved from September 2024 to September 2026, even though the listed project deliverable of 300MW has not changed.
“Over the last four years, the PPP has changed their promises made to the country, at the launch in 2021, they promised electricity rates would be US$0.05 per MW, two years later that promise was changed to “will cut electricity bills in half” to the current promise – on completion, the project will “reduce electricity bills”,” the former Minister of Public Infrastructure lamented.
To date, the GTE project has been subjected to two international arbitrations, and there are rumours that an additional claim is being prepared. It has been confirmed that the joint venture partnership will soon be dissolved, further delaying the project.
“In 2021, the PPP sought to justify that this project was urgently needed, since the electricity demand was slated to peak at 407MW by 2025, a figure that the AFC challenged as inflated and unrealistic, and simply a figure used to justify the project. Currently, the current peak demand is estimated at 220MW, almost 50% below this projection,” Patterson added.
Patterson said while the party is acknowledging that there is need for improved power generation in order to meet the energy demands of the country’s citizens, it is maintaining that the project has been poorly designed and executed.
“…to ensure that the country receives value for money, immediately after September elections, we will conduct a full audit (financial and technical) of the project, and with the help of qualified resource personnel, seek to ensure that the final project will deliver to the nation a workable power solution,” Patterson said.
On July 4, Kaieteur News reported that Vice President Bharrat Jagdeo stated that the Government of Guyana (GoG) is aware of a split between the joint venture involving CH4 and Lindsayca, the two companies hired for the GTE project.
The GTE project, located in Wales on the West Bank of Demerara, includes a Natural Gas Liquids (NGL) facility and a 300-megawatt power plant. Natural gas will be transported from the offshore Stabroek Blocks Liza oilfield via a 12-inch pipeline to the site, where 50 million cubic feet of gas will be converted to electricity daily.
Back in 2022, government hired CH4 (Texas) and Lindsayca (Puerto Rico) for the construction of the power plant and NGL facility at a cost of US$759 million.
“We’ve been hearing about the breakup of the consortium, and we’re told that this is to facilitate – because they have internal disputes – to facilitate the completion of the project by that deadline,” Jagdeo said in relation to the split.
He outlined that the split would allow the companies to accelerate work due to “internal wrangling” that had affected the pace of implementation of the project.
“So, I’m told that it’s a positive thing that is happening, but the technical people have to examine that,” Jagdeo told reporters.
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