President Irfaan Ali yesterday opened the Guyana Energy Conference and Supply Chain Expo and unveiled big plans for the country’s nascent gas industry including exports to CARICOM.
Speaking at the Marriott Hotel where the conference is being held under the theme ‘Fueling Transformation and Modernization’, Ali unfolded varying parts of a master plan for the country’s oil and gas which include supply and logistics. According to Ali, at full capacity Guyana is looking to supply Caricom’s gas needs.
Ali stressed that the conference is one that is different from last year’s noting that importantly the supply chain was added to the conference. Ali said that the role of investment in the logistics and transport system will be important in the building of Guyana’s economy as well as ensuring it is integrated within the region – CARICOM, South America and the Dominican Republic, etc.
According to the President, there can be massive energy potential, however, that will only be translated into value if there is a market “and if we can define our market space within the region ourselves then it points to very low hanging fruits but we have to build the infrastructure to facilitate this, to facilitate the movement, to facilitate the trade and to facilitate the integration and that is what we are focusing on in the logistic build up how do we build out this eco system to support the energy development.”
Noting the ongoing gas to energy project with the 250 kilometer pipeline from the Floating Production, Storage and Offloading platform to deliver phase one gas which is going to be 40% of the pipeline capacity, Ali noted that for the first phase they are looking at a power and Natural Gas Liquids (NGL) plant, “a 300 megawatt combined cycle and NGL facility.” He said, another investment which is critical to that project is the 85 kilometers of transmission line, three new substations and the upgrading of the present substations.
Ali stressed that the future depends on reliable, efficient energy which currently is not available in Guyana. The country currently also does not have the quantum of energy which is needed to drive the industrialization and manufacturing that is critically needed for Guyana’s development.
“So this project is extremely critical to give us the efficiency, the reliability but importantly it gives us the opportunity to be competitive because at the end of this project the cost of energy will be reduced by 50% and that then puts us in the game for manufacturing, agro processing and industrial development”, he asserted.
Ali said the pipeline which is an investment of about US $1b will come in in the fourth quarter of 2024, “we have an investment in the power plant, the NGL facility and the power plant is a combined cycle of US$759m and the transmission line substation of US$160m.”
He said that outside of the first gas supply which is the 40% of the pipeline that will come in, that will focus on this 300-megawatt power facility. “Based on pure interest by investors we are already seeing that the second phase of gas coming in will have to support a second power plant, that is based on the interest, just the interest in manufacturing, in industrial development, in agro processing, the growth in the demand of power is going to be enormous because we are going to propel that growth by the fiscal incentive regime, and the investment drive we are going to push forward for manufacturing, industrial development and agro processing”, the President said.
He added, “so in the first phase of gas, that is the 40% capacity of the pipeline you are looking at 4,000 barrels of propane retained per day… Our local consumption now is 800 barrels per day so we will be producing at least 4,000 barrels and that is in phase one, immediately we have 3,200 barrels available for export, this has to be moved, this has to be transported and here is where the bridge link to Suriname across the Corentyne River is key and critical.”
Excess
Ali said that this is why his government is pushing to advance the building of the bridge over the Corentyne River so that the market in Suriname becomes available in the first phase of the excess, “then of course we are now building out the road to northern Brazil, 122 kilometers of that road is under construction, 45 bridges, all of that investment we are already making so that that market becomes immediately available.”
Looking at full capacity which they don’t foresee to be long after phase one, Ali said that the target is 10,000 barrels per day “this means for us that even with a growth in our demand we will have 9,000 barrels a day ready for export.”
“This translates to us being able to fulfil to a large extent all of Caricom needs, (and) lead us to the fulfilment of all of Roraima’s (in Brazil) needs, so this is the link between investment when people ask why build roads, why build bridges this is the economic link that it will create, if we don’t have it we will sit on 9,000 barrels of propane and it can’t hatch”, he argued.
Ali then pointed out that some of the “experts” question and wonder why major investments are being made in roads and bridges, however, he said that it was a “critical link” to open up opportunities for the country.
“So you have 9,000 barrels immediately we are a major player, do you know what that means for supply chain, transport, logistics, transportation, the type of jobs which will be created, the types of small businesses, medium size businesses, industries that will be accelerated, the types of revenue stream, the types of trickle down benefit because in Lethem, in Linden you will then have to have mechanical facilities, servicing facilities, depots and the lists goes on”, he contended.
Noting that it will also allow the opportunity to link with the Dominican Republic (DR) which has a very high demand with approximately 5,400 barrels per day, residential and commercial, he said, “so it is important from a policy perspective that the mechanism to … allow this trade with DR … be seamless.”
Additionally, Ali stressed that development in Guyana especially within the energy sector will benefit the entire region, “at home we see these future projects benefiting all Guyanese through additional revenue creation, for socio economic development, increased foreign direct investments and local content development through increased supply chain activities, skill development and employment and of course associated industries which are important for economic diversification.”
Masterplan
Meanwhile, noting that the country is working on an overall gas strategy, Ali stated
that in “northern Brazil they import about 8 million tons of food-related imports and they export 13 million tons but guess what, to move this to the port it takes them two weeks, two weeks”, however, he said “coming through Guyana will take less than two days.”
“Our geographic position now places us on a competitive path to be the shipping logistics solution for northern Brazil and more importantly to make them more competitive and that justifies and adds to the rate of return for the deep water port and that is what is linked in to the supply chain and this is the direction we are going in”, he said.
According to him, a recent study revealed that from Lethem to New Amsterdam, Region Six, where the deep water port is foreseen, is a distance of 540 kilometers with a time of five hours and four minutes. “You are talking about agriculture, it is perishable, it is getting to the market as quickly as possible because there is a value of getting to the market as freshly as possible, you are talking about a game changer here for northern Brazil, a game changer for Guyana, a game changer for transport and logistics.”
According to Ali, this is not the only link to the master plan, stressing that bauxite is also an important link. He said, that with Suriname and Guyana combined there is about 1.5 billion metric tons of bauxite reserves “with the natural gas and the cost of energy coming down we can now move to upscale high-value manufacturing in an aluminum plant, building an aluminum plant to support the deep water port.”
He stressed, “this is the value addition, this is the value creation, this is what it opens up but none of this can take place if we don’t make the investment now, make the investment in infrastructure.”
After this he said that the building out of a marine economy then becomes important, “shipping, dry-docking, servicing, and once we build out that economy and build the infrastructure to support that economy then we can do more high value integration with the movement of food and these are where the real opportunities and real revenue streams will come in and that is why this forum is so critical. It is understanding the holistic approach, and it is linking those with the technology, those with the capital those with the know-how from the international perspective, the regional perspective to the local investors creating the relationship, creating a network and building out the ecosystem and making the necessary investment to make all of this now a reality.”
The conference which is bringing together over 800 delegates from around the world will run until February 22.
