Guyana could save US $ 160M annually in energy from the onshore gas project – VP Jagdeo

… Says a notional price of US $ 800M for a pipeline that is likely to be broken

The Government expects Guyana to save as much as US $ 160 million a year in power costs, when the onshore gas project, which will feed gas from Guyana offshore Liza Field, comes on stream.
During a recent interview, Vice President Bharrat Jagdeo pointed out that crude oil is currently around US $ 75 per barrel, while the cost of power generation is US 14 cents per kilowatt. Guyana, on the other hand, sells power at US 30 cents per kilowatt.
“The cost of generating power is 14 US cents per kilowatt hour / hour, we sell power at around 30 US cents per kilowatt hour / hour. Now, with the pipeline coming in, they have given the pipeline a notional figure of between 800 to 900 million, ”said Jagdeo.
“But we think when we go out to tender, the price will drop significantly, but you have to build the project on the outer limits, the external numbers. But when you go to tender, we think it will reduce a couple hundred millions of dollars. ”
The onshore gas project is a game-changing initiative that will see gas from Guyana’s offshore Liza Field being pumped onshore to generate power. The main objective of the initiative is to transport sufficient gas from the Stabroek Block petroleum operations to supply approximately 200-250 megawatts of energy to the national grid, resulting in a significant reduction in electricity costs.
President Dr Irfaan Ali had previously said that landing the gas pipeline ashore in Region Three would lead to “a major industrial development taking place there that is not only related to power generation and power plant. ” He also said the investment on the Demerara seafront would create huge opportunities and have a trickle down effect.
Shortly after the Government issued license licenses to Exxon for the Payara Development Project last year, Jagdeo had announced that the Government would turn its attention to discussing the gas-to-energy project.
He had pointed out that Guyana was producing at nearly 17 to 20 cents per kilowatt / hour. As such, he noted that the project could cut the cost of electricity in the country by more than half. To this end, it had announced that a team had been set up to begin negotiations on the gas-to-energy project, with the Government looking forward to 2023 to bring the project to fruition.
And, indeed, a Gas to the Beach Project Advisory Committee headed by the former head of National Industrial and Commercial Investments Limited (NICIL) Winston Brassington was set up shortly thereafter to look at different locations for the onshore gas project .
A number of factors including geotechnical, geophysical and environmental were examined before Vice President Jagdeo recently announced 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 generate 200 megawatts of power from the onshore gas project by 2024.
Exxon has said that the onshore gas project would need about 30 to 35 million cubic feet of natural gas. Data released recently by Norwegian research firm Rystad Energy indicated that less than 20 per cent of the 1.8 billion barrels of oil equivalent (BOE) discovered last year were gas.