Last year, the famously aggressive Stephen Sackur (Jamaicans will remember his interview with former Prime Minister Bruce Golding), host of BBC’s programme HARDtalk, went to Guyana. In an interview with Guyana’s president, Mohamed Irfaan Ali, Sackur observed that US$150 billion of oil and gas will be extracted off its coast, ultimately producing two billion tonnes of carbon.

Guyana’s President Ali sharply rebutted that Guyana had kept “a forest the size of England and Scotland combined alive” that held 19.5 gigatons of carbon that you “don’t pay us for”, with “the lowest deforestation rate in the world”, and even with all the oil and gas to be extracted, “we will still be at net zero”.

It was, therefore, very topical that the head of Guyana’s Gas-to-Energy Task Force, Winston Brassington, provided an update on their Gas-to-Shore project at the recent Caribbean Renewable Energy Forum (CREF) organised by Matthew Perks at the end of April in Miami. Brassington noted that, “Guyana is already net carbon-neutral and will be for the foreseeable future” and has “numerous strategies to ensure the standing forest” remains, including carbon credits for sale on the carbon market, for example, to the Hess Corporation, with “still significant credits available on the market”.

Phase one will see the construction of a 250-kilometre, 12-inch diameter pipeline to transport 50 million cubic feet of natural gas from the two existing oil offshore floating production storage and offloading (FPSO) platforms,
Liza Destiny and Liza Unity or roughly 40 per cent of the pipelines actual capacity of 120 million cubic feet at an estimated cost of US$1 billion.

Exxon Guyana will fund the initial cost of the pipeline, which the Government of Guyana will pay back at an annual rate of US$55 million over a 20-year period based on a US$2.40/MMBTU price per unit of gas for the power plant, the “effective” price for the Government’s guaranteed 50 million cubic feet of gas per day. Currently, as is the normal practice worldwide, the gas produced as part of the oil extraction process would be flared, which is both highly environmentally unfriendly and a waste of what is now regarded as the key transition fuel to the net zero future.

What Exxon CEO Alistair Routledge last year described as “no-cost” gas will be sent to a new natural gas to liquids plant, which will separate the gas that will then be used to power a 300-megawatt combined cycle plant. Brassington projects that the first half of 2025 will see the first phase as a 200-megawatt plus single-cycle power plant (one expert observed these normally operate at a 35 per cent energy conversion ratio), with the full capacity combined cycle (steam recovery boiler normally allows a plant to operate at a higher conversion ratio of around 65 per cent) of 311MW, greater than 2,600 GWH per annum, available in the second half of 2025, or just below peak load of 327 MWs estimated by Guyana Power and Light for the year 2026 (the current 2023 peak was 181 MW).

The power plant and associated gas to liquids facility will cost US$759 million, which the Government hopes to finance at 3 per cent (they have been in discussions with a number of lenders, including the US Government’s Development Finance Corporation, according to vice-president of Guyana Bharrat Jagdeo) and the transmission line substations will cost US$160 million. One key issue will be the split in costs between the power plant and the gas-to-liquids plant, which the Government suggests could be split 60/40 (liquids are a valuable by-product of the gas condensation process).

The punchline is the Government hopes to reduce the cost of electricity generation in Guyana to five cents per kilowatt hour, based on a cost of generation from gas estimated at three cents per kilowatt hour for the fuel and two cents for operations and maintenance at 95 per cent of power generated, compared with the current 17 cents for heavy fuel oil and 29 cents for light fuel oil.

We will leave the last word to former Caribbean regional Inter-American Development Bank (IDB) head Gerard Johnson (2010 to 2016), who worked closely with the Guyana Government on the Amaila Falls Project also mentioned by Brassington in his presentation as one of the projects the Government is again working on.

According to Johnson, “Guyana’s development strategy has climate change at its heart. Nevertheless, it would miss a unique opportunity to develop if it failed to exploit its blessing of hydrocarbon reserves. The pragmatic strategy of preserving forests and promoting renewable energy, including the emblematic Amaila Falls hydro project, while gleaning the windfall from oil and gas exploitation is laudable.” He adds, “Since China is a joint venture partner with Exxon, it would be interesting to know whether they will also participate in the gas-to-shore pipeline.”