When one considers the high costs of electricity in Guyana and the extent to which it hinders the development of businesses, one can surely appreciate the great financial burden that would be removed or eased if a gas-to-shore project were to be realized says Senior Analyst at Americas Market Intelligence (AMI), Arthur Deakin.
According to the columnist who pays rapt attention to Guyana’s oil sector, the project would be beneficial for all Guyanese when one also takes into account that electricity tariffs range between 25-35 US cents per kW per hour. Deakin said, “And that’s probably one of the highest costs in the region. It is something that hinders business development; it discourages multi-nationals from establishing operations there.”
Expounding further, the analyst said, “The reason why it is so expensive is that Guyanese businesses rely on generators that use diesel, which is very expensive and isn’t as effective as producing energy. So that high cost is something that is going to be reduced by this gas to shore power plan. Studies have been conducted to show that prices can be halved or even cut even greater than that if this gas-to-shore project comes online.”
While he supports the project, Deakin was keen to note that finding the right split between government and Exxon’s investment in the gas plant is important. Deakin said he is aware work is being conducted in this regard. “But with the large electricity losses in Guyana, the high electricity tariffs, it makes economic sense to have this gas-to-shore plants,” expressed the analyst.
The AMI Co-Director on Energy also cautioned that there needs to be thorough and independent studies to figure out what makes sense in terms of the scale of development of the project.
Vice President, Dr. Bharrat Jagdeo who holds an oversight responsibility for the oil sector has since disclosed that the proposed site for the landing of the pipeline from the Liza field in the Stabroek Block would be Wales, West Bank Demerara (WBD). But the environmental and economic studies to support the selection of this location are still to be released.
