Kaieteur News ( Guyana )
27 May 2023 ( Page 3 )
Gas-to-Energy project nearing US$3 billion with new contract to be awarded soon for transmission of electricity
The cost for the GastoEnergy (GM) is nearing the US$3B mark, even as the feasibility of the nation's single largest financial project remains questionable. Vice President Bharrat Jagdeo during a press conference at Freedom House two weeks ago updated that three bids were received by government for the transmission of the electricity. The contract will allow for power generated fran the natural gas to be supplied to the national grid, fran the generation port at Wales, West Bank Demerara. The cost of this aspect of the project has not yet been revealed as the bids are still being evaluated, according to the VP. He told reporters, "All the bids are in place. The only one that we are working at now is the bit about evacuating the power, building the substations and we went out to tender, we had three bids for that, we hired Stantec a Canadian company to help us evaluate the bids because it's very complex and we are now in the process of awarding that contract soon." He said the contractor will be responsible for taking sane of the power back into West Demerara, but transmitting the bulk to the other parts of the interconnected system. Jagdeo noted that this contract is expected to be executed in time to facilitate the project startup by 2024. So far, government anticipates the pipeline aspect of the project to cost US$1.1B. It is being financed by American oil giant, ExxonMobil and would be paid back by Guyana, over a 20year period, through purchasing the gas. Meanwhile, a Natural Gas Liquids (NGL) facility to treat and separate the gas, along with the 300megawatt power plant, are expected to cost just over US$1 billion, considering a repayment of US$51 million annual payback, over a 20year period. https://www.lcaieteurnewso nline.corn/2023/02/19/guya nasaddledwithus106myearlyfor20years/ Government has approached the United States Export Import (EXIM) Bank fa financing of those components. Additionally, Head ofthe GTE Taskforce, Winston Brassington had announced during this year's International Energy Conference, hosted at the Guyana Marriott Hotel, that $400 million approximately US$2 million had been set aside to compensate land owners that would be affected by the pipeline. This means the project price stands at US$2.3 billion presently, considering the !mown costs, shared by government. Attempts made by the Opposition in Parliament to ascertain the final cost ofthis project has been unsuccessful. The project is likely to cost US$3 billion when additional expenditure is considered for the transmission of the electricity and the new substation being constructed at Eccles, East Bank Demerara to support the initiative. It was explained that the Eccles substation would receive power from both the new natural gas facility as well as the Amaila Falls Hydro project which is yet to commence. https://www.kaieteurnewso nline.corn/2022/04/24/gpltoestablishcontrolcentreatoccles/ In addition to those charges, Jagdeo explained that government has hired a consultant to assist the nation in evaluating the bids. This will attract a separate cost which has not yet been announced. Even though concerns have been raised regarding the escalating cost of the project, the government is reluctant to conduct a feasibility study. Vice President Bharrai Jagdeo theproject. At the end of 2022, the In fact, the VP believes is a "notrainer" given his country's total stock of the viability of the initiative "estimates" on returns from public debt stood at US$3.6B. This means, with one project, Guyana could be doubling its total public debt.