President Irfaan Ali yesterday pleaded with Guyana’s citizenry to trust his government to give them a gas-to-shore project that will bring not only lower power costs but put savings into their pockets while expanding development and prosperity for the nation.
“There is absolutely nothing to hide in this process or project. It is above board, it is transparent, it is open. It has undergone every single test of scrutiny. But the time has come for us to move forward… in bringing the desired benefits to the people of this country,” the President yesterday said at a forum held at State House to give an overview of the project.
And as he announced that no cost has yet been put to the project estimated by analysts to be over US$1.3 billion, the President said that by the end of this year that sum would be known as the nine firms which have been shortlisted to bid for its construction have up to September to submit their proposals and government estimates a contract signing in the last quarter of this year.
“I hear people talking about different figures; US$500 million, US$700 million, US$1 billion. We operate and we are going on with this project in a very open and transparent way. It is a public bid. It is a public bid! Companies put in their figures… it is not someone sitting in an office saying ‘this is the project cost’. It is a process that is arriving at a cost based on an open and transparent (process). So whether it comes in at (US)$700 million or US$1 billion, that is what the process would decide. Not influenced by anyone. We would like for it to come in as less as possible but we have to go with what the process delivers.”
With executives from ExxonMobil’s United States headquarters, the diplomatic corps, civil society, the private sector, and other representatives present, the forum’s timing was unusual as there had been no prior notification that Ali would be giving a broad-based public overview of the project.
In his address, Ali said that he wanted to make the ordinary citizen aware of what the project entails and what it would mean to them, as there has been much criticism from sections of society.
So confident is his government that this project will serve as a catalyst for Guyana’s economic sector growth and help in the fight for poverty alleviation that Ali said that it would not abandon it and would press on to make it reality .
“Let me be very clear, we are not going to abandon this project. If we have to go out [to tender] again and again, we will go, because we know that the studies and everything, including the independent review by Norway has pointed to this project as being good for Guyana, good for the environment and bringing prosperity. So this project will get underway,” he contended.
On the financial side, Ali acknowledged that negotiating was difficult as “negotiating power with Exxon is like negotiating with a super power state.” Nonetheless, he said that Guyana’s negotiating team’s capabilities should not be doubted as in this phase of bringing gas from the Liza project, Guyana gets the gas free.
Of the US4.5 cents per KWH that will be paid, he said it “includes paying back for the pipeline, the LGN, facility and the operational costs.”
“The gas comes to the people free of cost!” Ali declared.
He assured that as the nine companies are being evaluated, it would be done in a transparent process, the same way expressions of interests calls were made, by technical experts, and neither government or its partners in Hess, EEPGL and CNNOC would “sit down and say, ‘you, you, and you come”.
By the end of next week, a notice for a supervisory firm for the project will be publicized, Ali disclosed.
“This will not be done by the VP, the government, Exxon…we are going out again for a firm that has the capability to provide the supervisory services. Another layer of advanced transparency on this project,” he said.
Ali said that as the project cuts across sectors, he is urging the public to see beyond a pipeline. “The benefits of this project is not only about electricity and the cost of electricity. That is for those who want to structure it in a narrow construct. This project is a transformational project that must be structured in the transformational construct because it is directly linked to all the other sectors. It is national and transformative in nature and which cuts across sector and which every stakeholder will benefit from.”
The pipeline is expected to land at Crane/Nouvelle Flanders, West Coast Demerara, and make its way to Wales on the West Bank of the Demerara. Some 150 acres of land at Wales has been allocated for the project slated to cut power costs by 50 per cent.
The government’s power plant is expected to utilise “dry gas” for electricity generation. The impacts of that power plant have not been addressed in the Environmental Impact Assessment for the pipeline, since it will not be constructed by EEPGL.
EEPGL estimates the current project cost at approximately US$1.3 billion (GY$260 billion) and adds that a “higher certainty cost estimate” will be developed following the negotiation of all major contracts. The company states that if all approvals are granted in a timely manner then it is aiming for an early start on construction.
The project aims to employ approximately 800 workers during the peak construction stage and 40 full-time workers during the operation phase.
It will be executed in three phases – construction, operation and decommissioning. It entails three aspects as well – an offshore pipeline which is approximately 220 kilometres of a subsea pipeline extending from new subsea tie-ins at the Destiny and Unity FPSOs in the Stabroek Block to the proposed shore landing, located approximately 3.5 kilometres west of the mouth of the Demerara River; onshore pipeline that is a continuation of the offshore line and extends about 25 kilometres from the landing site to the NGL plant; and the NGL plant and associated infrastructure that will be located about 23 kilometres upstream from the mouth of the Demerara River on the west bank.
Both the Destiny and Unity FPSOs have pre-installed facilities to allow for the export of the associated gas with crude production.
President Ali said that government expects $20 billion in savings from the project to “go back” into the pockets of citizens, thus improving their spending power.
“That will now be freed up and made available to be spent in the economy,” he said.
He dismissed claims that cooking gas will be free but said it would be so economical that persons would save $7B annually.
Ali declared: “We need to have a mental transformation in our society. Because the scale of what we are doing is different to what we think… what we imagined.” He said that it requires more than “gyaffing scenarios” as it is here Guyana will show critical thinking skills, as they evolve to developing “a mindset change”
In brief remarks, ExxonMobil’s Upstream Oil & Gas President Liam Mallon assured that his company was committed to creating sustainable solutions and pointed out that the project will lower emissions here as it cuts current emissions by more than half.
Mallon said that while he has worked on many projects across the globe nothing brings more excitement to him than working on the Guyana project.
He assured that the creating of sustainable solutions ensures lower emissions and meeting the Paris agreement.
“In meeting that goal we have several strategic priorities and right at the top… is being an essential partner,” he said pointing out that the project is a “win –win” for the people of this country.
“It exemplifies progressive development and lower emissions” he said… “Not only will it improve the lives of people every single day but open up opportunities in every area in Guyana.”
