The loan that the Government will eventually have to take to finance its portion of expenses for the over US$1.7 billion gas-to-energy project, can help repay for itself when natural gas liquids are sold from the project.
Giving this update, Vice President Bharrat Jagdeo in a side interview with journalists on Friday explained that the Government will acquire a loan from an Export Import Bank to finance the gas-to-energy project.
The total that will be borrowed and its details will be made public.
According to Jagdeo, the loan and their share of the expenses can be repaid by selling natural gas liquids. He further assured that all the financing of the project will be above board and visible for all to see over the coming years.
“The pipeline aspect is through the sale of the liquids. So, when we sell the liquids at the current price it is, we’ll probably get upwards of $100 million from the sale of the cooking gas and other liquids. That could repay the loan to EXIM bank and our share of the cost of oil,” Jagdeo further explained.
So far, it is known that the pipeline component of the Gas-to-Energy project will cost US$1 billion. Meanwhile, the natural gas liquid and 300-megawatt power plants will cost US$759 million.
In fact, in his budget presentation, Finance Minister, Dr Ashni Singh revealed that 43.3 billion will be allocated for the gas-to-shore project.
Prime Minister, Retired Brigadier Mark Phillips, who has responsibility for the energy sector, had recently informed the National Assembly that the latter component of the project will be financed through budgets and loans.
The PM had also assured that no contingency liability is likely and that the Government will make annual payments to Exxon subsidiary Esso Exploration and Production Guyana Limited (EEPGL).
“When the project is completed, the Government will make an annual payment to EEPGL co-venturers over a 20-year period to recover the cost of their investment in the pipeline used to deliver a minimum of 50 million cubic feet of gas per day to Wales.”
“The total cost of electricity exiting the power plant which includes the payment to EEPGL co-venturers, operating costs of the power plant/NGL plant and recovery of capital costs, shall be less than US 5 cents per kWh,” the Prime Minister also said.
With a timetable to deliver rich gas by the end of 2024 and the Natural Gas Liquid (NGL) plant to be online by 2025, works are progressing on getting the Gas-to-Shore Project off the ground. When it comes to the construction of a combined cycle power plant, a net total of 250MW is expected to be delivered into the Guyana Power and Light Grid at a sub-station located on the East Bank of the Demerara River.
The scope of the Gas-to-Shore Project also consists of the construction of 225 kilometres of pipeline from the Liza field in the Stabroek Block offshore Guyana, where Exxon and its partners are currently producing oil.
It features approximately 200 kilometres of a subsea pipeline offshore that will run from Liza Destiny and Liza Unity Floating Production Storage and Offloading (FPSO) vessels in the Stabroek Block to the shore. Upon landing on the West Coast Demerara shore, the pipeline would continue for approximately 25 kilometres to the NGL plant at Wales, West Bank Demerara.
The pipeline would be 12 inches wide, and is expected to transport per day some 50 million standard cubic feet (mscfpd) of dry gas to the NGL plant, but it has the capacity to push as much as 120 mscfpd.
The pipeline’s route onshore would follow the same path as the fibre optic cables, and will terminate at Hermitage, part of the WDZ which will house the gas-to-shore project.
