With works progressing on the gas to energy project, private sector officials are confident that when the initiative is ignited, it will bring tremendous benefits to all local industries, including agriculture – which is a key part of the government’s efforts to diversify the economy.
This position was delivered by Chairman of the Private Sector Commission (PSC) Komal Singh during a social media programme, “The Guyana Dialogue” where he noted that from the cheaper electricity produced through the project, Guyana’s agricultural produce can finally compete internationally.
“One of our problems is: our cost of production is so high and because of that you can’t do value-added products and that is why Trinidad is ahead of us. But with the development of the gas to energy project, whereby we will see a reduction in our power cost, that’s going to reduce [the] cost of production in a very good way.”
“That will allow more people to go back to the farm, it will allow more people to invest in value-added products, especially in the agro-processing sector. I think that’s a good initiative we have seen from [the] government, pushing to get that project out of the way as quickly as possible and it will have a rippling effect with farmers and the entire abundance of land that we have around the place, we will see more investors,” Singh emphasised.
With cheaper electricity in the pipeline, the PSC Head emphasised the need for better access to capital as well as for innovation.
“What we need to do however, when it comes back to access to capital and how much capital our local people have to develop those, to make sure we do it in a way where we have economies to scale, we mechanise the operations so you can compete on an international market when it comes to pricing.”
Singh meanwhile noted that the country has an abundance of undeveloped land which can be tapped into for agricultural purposes.
“Guyana has an abundance of land, and not just an abundance of land, very fertile land which was not developed over the last couple of years. And the lack of development especially from the agriculture side is basically as a result of not having adequate market.”
“We have seen, outside of the sugar industry and the rice industry, a lot of people are moving away from farming because of marketing. Recently we have seen the development of large-scale farming, especially on the Soya side. Within a year, we have seen that aspect of the agriculture sector develop significantly.”
Nevertheless, Singh explained that government’s renewed focus on the agriculture sector will catapult it into a modern industry.
The multibillion-dollar transformational gas to energy project includes the construction of an integrated Natural Gas Liquid (NGL) plant and a 300-megawatt (MW) combined cycle power plant at Wales, West Bank Demerara (WBD).
So far, Government has spent $24.6 billion on the start-up of this project. This includes $400 million for the acquisition of private lands to facilitate the laying of pipelines in Region Three and the remaining $24.213 billion was a 15 percent payment on the Engineering Procurement and Construction (EPC) contract, which was awarded to US companies CH4 and Lindsayca late last year. The total cost of the EPC contract is US$759.8 million.
In addition to the EPC contract, the supervision of the NGL and power plant components of the project will cost another US$23 million.
With a timetable to deliver the power plant by the end of 2024 and the NGL plant to be online by 2025, works are progressing on getting the gas-to-energy project off the ground.
