Minister of Natural Resources Vickram Bharrat highlighted the transformative impact of the ongoing Gas-to-Energy (GTE) project on Guyana’s economy, specifically its potential to enhance the country’s manufacturing sector significantly. At the launch of Massy Gas Products’ Air Separation Unit (ASU) last Thursday, Minister Bharrat underscored how the project’s reliable and affordable energy supply would drive industrial growth by reducing electricity costs and creating new opportunities in key industries.
Minister Bharrat pointed out that high electricity costs have long hindered manufacturers from setting up operations in Guyana, stifling industrial expansion and diminishing competitiveness. He explained that many potential investors are deterred by operational costs, particularly the expense of power generation, which undermines profitability.
“The cost of power generation and its reliability in Guyana have been major challenges. It’s not that businesses don’t want to invest in Guyana, but with the high operational costs, especially in energy, their profit margins shrink. This is why many hesitate,” the Minister said. He added that the Gas-to-Energy project would be “the most transformational project” in the country’s history, addressing this long-standing issue.
Guyana currently has some of the highest electricity costs in the region, at over 20 US cents per kilowatt hour, a stark contrast to neighboring countries that generate electricity for under 10 US cents per kilowatt hour. Minister Bharrat explained that this disparity makes it almost impossible for local businesses to compete in energy-intensive industries like manufacturing.
“If I were an investor, I would think twice about investing in a country with energy costs over 20 US cents per kilowatt when I could invest in a neighboring country with half that cost,” Bharrat reasoned.
The Minister acknowledged that while critics may argue against the GTE project for political gain, the benefits it will bring to the Guyanese economy will be undeniable, with all citizens standing to benefit.
The GTE project is being advanced in partnership with ExxonMobil Guyana and its co-venture partners, Hess Guyana Exploration and CNOOC Petroleum Guyana. The project involves constructing a 200-kilometer pipeline that will transport natural gas from the Liza Phase One and Liza Phase Two Floating, Production, Storage, and Offloading (FPSO) vessels to a power plant and Natural Gas Liquids (NGL) facility located in Wales, West Bank Demerara.
With a total estimated cost of US$1.8 billion, the project is expected to be operational by the end of the first quarter of 2025 and has a projected 25-year lifespan. Once completed, it will contribute to the government’s goal of reducing energy costs by at least 50 percent through an energy mix that includes gas, solar, wind, and hydropower.