Vice President Dr. Bharrat Jagdeo has said the government will pursue loan finance from the United States Export Import Bank (US EXIM) to complement planned spending on the Gas-to-Energy project.
The government expects profits from the NGL plant to offset the loans to fund infrastructure, and the operation and maintenance costs for the facility.
Some government funds will also be plugged into the project. Dr. Jagdeo at a press conference on Friday reminded that Guyana approved GY$20.8 billion (approximately US$100 million), through its National Assembly, in January to support the Gas-to-Energy project. The government may also assign further funds for this project in its 2023 national budget.
Meanwhile, Jagdeo revealed that the administration finalised and approved a contract award to CH4/Lindsayca for the engineering, procurement, and construction (EPC) of the integrated facility, which will comprise a 300 megawatts (MW) power plant and a natural gas liquids (NGL) plant. He revealed that the finalised cost under the contract is US$759 million. As for the pipeline and associated facilities to be built by ExxonMobil, the major had estimated the cost would be US$1.3 billion, but indicated that a higher certainty estimate will be provided. The full cost for the project, based on the most recent figures, will therefore be more than US$2 billion.
Other costs associated with this project include those to pay for negotiation and advisory support, project management and supervision, and installation of new electricity transmission lines and substations.
The Environmental Protection Agency (EPA) recently approved ExxonMobil’s application for environmental authorisation for its aspect of the project. Minister of Natural Resources, Vickram Bharrat, said approval is expected in a few weeks for the onshore plants.
Based on the foregoing plans, the Vice President said the government’s plan to slash the cost of power by 50% remains even in the face of increased project costs. He said when the government ran the numbers, considering inflation, it remained resolute that it will be able to sell power at US$0.15 per kWh. He said currently, power is sold at US$0.30-0.35 per kWh.
Both the onshore plants and the pipeline are expected to be delivered by 2024.