The gas-to-shore project took center stage on Monday when Vice President Bharrat Jagdeo met with publishers, media house owners, editors-in-chief and senior media workers at the Arthur Chung Conference Center where he and senior officials working on the project shared a number of pertinent details.
One such detail was the fact that Crane on the West Coast of Demerara (WCD) has been settled on by the Government as the landing site for the pipelines that will then transport the gas to the power plant in the Wales Development Zone.
“There (were) two routes there that (were) being examined for the pipeline to come in. The current area where it would land would be about around Crane Village. The pipeline will not follow the route of the Demerara River,” Vice President Dr Bharrat Jagdeo told the gathering on Monday.
“The pipeline runs almost throughout the entire scheme because the power plant is going to be located almost to the southern end of the layout, because of wind patterns and a whole range of other patterns,” Jagdeo explained.
According to Jagdeo, the commercial and other areas will be to the north. He also explained that no decision was made on the beginning of the project when the PPP assumed office.
Jagdeo noted that the first thing they did was select a site, before they could even move the project forward. There were a number of options, including Crab Island (Berbice), Mahaica and Wales.
“We examined the numbers. Crab island versus Wales. And Wales came out much more feasible in terms of the cost. Crab Island is very swampy and very low, so the development cost would have been extremely high and as was pointed out, Wales is less prone to flooding.”
Jagdeo also shared some interesting information.
It turns out that during negotiations on the volume of gas ExxonMobil would be providing Guyana from its Liza Field offshore, the company had been reluctant to provide the volume needed for the project to work.
“We had a contentious situation with Exxon. They did not want to give us more than 30 million cubic feet of gas per day. And that was a point of contention and that went up… 30 Million cubic would not have allowed us to generate 250 megawatts from a 300-megawatt power plant we hope to build.”
“So the 50 million cubic now, will allow us to generate 250 megawatts and still have some additional gas that will remain for other purposes. There’s currently work being done to determine whether we’ll use it for some polymers, basalt fiber, looking at Protein for the agricultural sector. Its not a gas field, it’s the associated gas.”
Meanwhile, head of the Gas-to-Shore Project Advisory Taskforce, Winston Brassington, who was also present, revealed that at least five studies on the gas to shore project have been done over the past five years, including studies by the Inter-American Development Bank (IDB).
“This project has been under study since 2016. In 2020, when the PPP came to power…we started negotiations with Exxon in October of 2020. We also had a commitment by the end of last year that we would have the bringing up of 50 million cubic feet of gas per day which would be enough gas to allow us to power a gas project with a inaudible capacity of 250 megawatts. We also agreed a timeframe.”
According to Brassington, it was agreed that the project would come online in 2024 and that the first 18 months would be used to complete all of the requisite studies and conduct a competitive tender for construction of the pipeline.
“We also reached an agreement on some of the key considerations. First, we had an upper limit on the capital cost of the project. Secondly, we agreed that Exxon will fund the pipeline out of cost oil. Thirdly, we had an upper limit of the estimated cost of kilowatt hour of power from gas delivered at the Wales location. That upper limit was three and a half cents per kilowatt hour.”
“Now, in the press, many have said there were not studies, it is not true. There have been at least five studies completed between 2016 and 2020. We have a list of these studies on the board. These studies, some were completed by the IDB, one was done by the Japanese group.
These studies looked at all of the key aspects of the project,” he said, adding that the chosen location was studied extensively and out of 20 different locations, the Wales location was superior.
The gas-to-shore project is a game-changing initiative that will see gas from the Liza Field offshore Guyana being pumped onshore to generate power. The main objective of the initiative is to transport sufficient gas from the Stabroek Block’s petroleum operations to supply some 200-250 megawatts of energy to the national grid, leading to a significant reduction in electricity costs.
President Dr Irfaan Ali had previously said the landing of the gas-to-shore pipeline in Region Three would lead to “big industrial development taking place there that is linked to not only power generation and a power plant.” He also said the investment on the Demerara River’s shoreside would create massive opportunities and a trickle-down effect.
Soon after the Government issued permit licences to Exxon for the Payara Development Project last year, Jagdeo had announced that the Government would turn its attention to negotiating the gas-to-energy project.
A number of factors including geotechnical, geophysical and environmental were examined before Vice President Jagdeo announced recently that the Government had settled on Wales to land the pipelines for the project.
Meanwhile, Prime Minister Mark Phillips, who has responsibility for the energy sector, has previously said that the Government is looking to produce 200 megawatts of power from the gas-to-shore project by 2024.
Exxon has said that around 30 to 35 million cubic feet of natural gas would be required for the gas-to-shore project. Recently-released data from Norwegian research company Rystad Energy had indicated that less than 20 per cent of the 1.8 billion Barrels of Oil Equivalent (BOE) discovered last year was gas.