The People’s Progressive Party/Civic (PPP/C) Government is moving ahead with the establishment of an oil refinery in Region Six (East Berbice-Corentyne) and will soon be inviting potential investors to submit their proposals for the construction of a 30,000-barrel facility.
This was revealed by President Dr Irfaan Ali on Friday evening at the opening of the Berbice Expo and Trade Fair at the Albion Community Centre Ground, Corentyne.
According to the Head of State, this refinery is to ensure Guyana’s energy security in the future.
“We are about to launch a new ad for a Request For Proposal (RFP) for a new 30,000 refinery, for national security, to be built in Guyana, here in Region Six. In two months’ time, we’ll be receiving the submissions from those who are interested in investing in this 30,000-barrel refinery to be established right here in Region Six,” he stated.
This announcement comes months after President Ali had first disclosed that the Government had received six proposals from investors interested in building small oil refineries in the East Berbice-Corentyne region.
At the time, the Guyanese leader was meeting with residents of New Amsterdam, Berbice, in April and told them that such a project can be the catalyst for transforming the region into an economic hub.
In fact, the Head of State reiterated during Friday’s address in Albion that “In all of this, Regions Six and Five (Mahaica-Berbice) are well positioned to be the centrepiece for growth and development… The opportunities this [oil refinery] will create for the transport and logistics, the services industry, the construction industry, and the rental industry are enormous and will bring tremendous benefit to the people of this region.”
President Ali further noted that this move is part of his Administration’s plan of positioning Guyana as an energy leader in the world – not only in fossil fuel but also in renewable energy.
“The potential of the Amaila Falls Hydro Project, the catalysing of our gas field will be an important part of the supply of energy around the Guyana Shield corridor,” he contended.
Currently, Guyana, Suriname, and Brazil are in talks on the establishment of an energy corridor and unlocking the potential for a series of manufacturing and industrial developments. Other Caribbean nations such as Trinidad and Tobago as well as Barbados are also looking to tap into this initiative.
Successive Governments have been cautious on the matter of building a refinery in Guyana that is State-owned, resulting in the only takers for this initiative coming from the private sector. The former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government had previously hired a consultant, Pedro Haas, to carry out a feasibility study into constructing an oil refinery.
The results of the study did not favour building a refinery, particularly one with a capacity to produce over 100,000 barrels per day. In his study, Haas looked at the cost of building an oil refinery with a capacity of producing more than 100,000 barrels of oil per day. The study had come up with a US$5 billion price tag in order to construct the refinery in Guyana.
The expert also suggested that as an alternative to the establishment of an oil refinery, the Government could pursue maximising income from commercialising crude oil. Another suggestion was that the Government swap or toll crude oil for products on the global market or create joint ventures with offshore refineries, as well as acquire stock in refining companies.
However, the study was done at a time when oil giant ExxonMobil was the only operator in Guyana’s waters to find oil in commercial quantities. Members of the private sector have previously urged that the construction of a refinery be re-explored when more operators find oil.
Back in August, Vice President Bharrat Jagdeo had stated that while the Government has received several proposals for big refineries to be set up here, there is a need for at least one small refinery in the country to process the crude for local consumption in order to ensure the country’s energy security in the future.
“Having a small refinery here could make a big difference for energy security because if we have, for example, hurricanes or any other disaster [in the Region] and we can’t get our supply of gas or kerosene or anything else, then having a local refinery – a small one – can make a big difference for national energy security,” the Vice President had posited.
In fact, VP Jagdeo had previously said that Government is prepared to support the establishment of a small refinery, and even sell limited amounts of Guyana’s crude to such a facility.
Already, a United States investor – Chemtech Limited – is planning to set up a US$200 million oil refinery and integrated petrochemical manufacturing complex on the East Bank of Demerara (EBD) that will employ some 750 persons during its construction and another 300 permanent workers.
According to Chemtech in its project summary, they have already received no-objection letters from the Guyana Office for Investment (GO-Invest) and the Region Four (Demerara-Mahaica) Regional Democratic Council (RDC) for the project which has a proposed site on 492 acres of land at Plantation York.
The company said the oil refinery will take between 24 and 30 months to construct, while the integrated complex will take between 18 and 24. The project, it assured, would not need natural gas but would utilise products already made from natural gas, such as methanol and urea.
Meanwhile, the Government of Guyana is currently progressing with its hallmark gas-to-shore project, which includes a power plant and a Natural Gas Liquid (NGL) plant, that is aimed at delivering rich gas by the end of 2024.
The US$900 million initiative is slated to generate 250 to 300 megawatts of power using natural gas from offshore production activities in the ExxonMobil-operated Stabroek Block, thus significantly reducing the country’s high cost of electricity.
