There are multiple media reports dating back to 2021 which quote Vice President, Dr. Bharrat Jagdeo as saying that ExxonMobil Corporation’s investment in a US$1.3B pipeline for the gas-to-energy project will be repaid from Guyana’s oil resources.
But ExxonMobil Guyana President, Alistair Routldge yesterday contradicted the VPs position. Routledge said Exxon will be selling Guyana the gas that will be transported from the Liza field to onshore facilities at the Wales Development Site. Routledge said categorically that this is how the company’s US$1.3B investment for the pipeline network will be recovered.
Routledge said the price for the gas is still being worked out but added that there is no profit element involved for Exxon.
The official said, “…We are selling the full 50 million cubic feet of gas per day to the government or a government entity that is being established in order to receive the gas and put it through the power station and at that point the government takes control of the gas and associated gas liquids…”
Routledge further noted that a Heads of Agreement was signed since last year June on the matter with government but a gas supply agreement, field development plan and update to the relevant production licences are still being worked out.
If done right, the gas-to-energy project is expected to be one of the most transformative initiatives in the country’s history. The project aspires to lower the country’s carbon foot print while reducing electricity costs by 50 percent.
While Exxon is in charge of implementing an intricate pipeline system for the project, government is working to establish two major parts that will collect the gas and process it into valuable by-products. Those two onshore facilities include a power plant and a Natural Gas Liquids (NGL) plant.
US-based partnership CH4/Lindsayca won the contract to construct the 300 megawatts (MW) combined cycle power plant and NGL facility. It is doing so at a cost of US$898 million.
As for the construction of the pipeline for which Exxon is responsible, this is expected to cost upward of US$1.3 billion. The current estimate for the project is therefore expected to be approximately US$2.2 billion.
Engineers India Limited will supervise the Engineering, Procurement and Construction (EPC) of the onshore plant facility. It is expected to hire another form to operate the project.