Dear Editor,
I am a concerned Guyanese living in Toronto and I have been following with great interest the discussions and public information around the proposed Gas to Shore (GtS) project in Guyana.
I appreciate that I don’t have all the details surrounding the project but given the scale and complexity of the project, I am not sure anyone does at this time.
This Gas to Shore project is vital for the development of Guyana and I fully support it.
The most important feature is the supply of cheap and reliable energy for citizens and businesses, and the creation of skilled, long-term, high paying jobs locally.
The emphasis seems to have been focused on an undersea pipeline from the Stabroek Block to the former sugar industry at Wales, WBD.
While a Gas Pipeline to Shore may be feasible, it may not be the best option for Guyana at this time.
I would like to provide my thoughts on the subject:
A feasibility study should be conducted to look at all means for bringing Gas to Shore, including the pipeline, Liquefied Petroleum Gas (LPG) using floating vessels and Compressed Natural Gas (LNG) using floating vessels. These options should be investigated by an independent experienced firm to assess technical, financial, social, as well as short and long-term strategic benefits of each option. Note that, while a pipeline could be a long-term plan, there are many benefits to consider, for example, LPG using floating vessels.
Benefits of an LPG project using floating vessels as compared to the pipeline are:
Accelerate the timeline and reduce the risks (costs, technical and schedule) of bring Gas to Shore.
Ability to bring Gas to Shore at onshore terminals located at different parts of the country. For example, there could be LPG terminals in Berbice, Demerara and Essequibo, and even to neighbouring Suriname.
Reduce upfront the cost of implementation of bringing Gas to Shore. The government can focus on developing one or more LPG terminals along the coast in close proximity to existing power generating plants. This will accelerate the implementation of lower-cost power to the citizens of Guyana so they can realize the benefits sooner.
Gas to Shore with floating vessels can take gas from different blocks as they come online rather than a pipeline only to the Stabroek Block. Once the oil from the Stabroek Block is depleted or becomes uneconomical for whatever reason and Exxon and its partners decide to stop or reduce production from that block, then what happens to the Gas to Shore pipeline? We grew up learning that we should not “put all our eggs in one basket” and I think a pipeline to one producing Block is doing just this.
3. There are essentially three components to the Gas to Shore project, namely 1) bringing the gas to shore; 2) processing and storing of the products from the gas onshore; and 3) power generation using cleaner and cheaper fuel. The government could split these into separate or integrated infrastructure projects with financially strong and reputable counterparties. The focus should be Gas to Power as the driving force, rather than Gas to Shore.
4. Guyana should focus on building out its electrical generation and distribution infrastructure using power generated by cleaner and cheaper gas and other more environmental means. The pipeline is a long-term, very expensive approach which can be considered down the road as Guyana develops as a nation with the skills, expertise and infrastructure to utilize the volume of gas from a pipeline. The world is changing rapidly to electrification of important energy consuming activities such as transportation, industrial and residential uses (like cooking), so getting Gas to Power as soon as possible is vital for the development of Guyana and for citizens to see the benefits immediately. There is no need to start building out gas distribution infrastructure, but rather to enhance and upgrade the existing electrical power infrastructure and supported by cleaner/cheaper power generation using Gas to Power.
Note that I have no personal or vested interest in this project or any related to projects but I do have knowledge and experience in infrastructure project development. I understand some of the risks related to large infrastructure projects and allocation of risks and benefits. I would be happy to provide any support and advice as needed.
As for my background, I am a Guyana Scholar (Queen’s College 1984) with 30 years of international engineering and management experience, and Chemical Engineering degrees from University of Cambridge (UK) and University of Toronto.
Yours sincerely,
Deo Phagoo, P.Eng.
Toronto, Canada
