Gov’t extends Request for Proposals for Phase Two of Gas to Energy project

The government is advancing the second phase of the landmark gas-to-energy project, which is expected to reduce electricity costs by 50 per cent.

A request for proposals (RFP) was extended to qualified firms to design, finance, and operate Phase Two of the project, under a 20- to 25-year Power Purchase Agreement (PPA).

The project will use natural gas from ExxonMobil’s offshore oil fields, transported via a 200-kilometre pipeline to a new facility on the West Coast of Demerara.

The gas will be processed at a Natural Gas Liquids (NGL) plant in Wales before powering a combined-cycle power plant.

The government has secured additional gas from ExxonMobil Guyana Limited to fill the 250 km pipeline to Wales, with an estimated supply of 75 million cubic feet per day (MMCFD) of rich gas.

Phase One will utilise 50 MMCFD, representing 40 per cent of the pipeline’s capacity.

The remaining 60 per cent will be allocated to Phase Two, which involves the construction of a 250 MW combined-cycle power plant and an NGL facility.

The power plant is expected to produce 2,100 gigawatt hours (GWh) of electricity per year, while the NGL facility will produce approximately 6,000 barrels per day of NGL products, utilising 75 MMCFD of ‘rich gas.’

This phase will also see the transfer of excess ‘lean gas,’ estimated at 30 MMCFD, at no cost, for use in downstream industries, such as fertiliser production, to be established at Wales.

According to the RFP, Phase Two will be located on no more than 100 acres of land, immediately adjacent to the existing 300 MW Integrated facility.

“The project will be owned and financed 100 per cent by the private sector, under a project finance structure, which will design and construct the integrated facilities, to a standard and specification that meets and or exceeds that of Phase One of the GTE,” the RFP stated.

Once completed, the NGL facility will enable Guyana to produce gas domestically, reducing dependence on foreign energy sources and making the country less vulnerable to global market fluctuations and supply disruptions.

Beyond domestic consumption, Guyana aspires to become a leading supplier of Natural Gas Liquids (NGLs) to neighbouring markets including Brazil’s Roraima state, the Dominican Republic, and the Caribbean region.

Other aspects of the project are expected to be completed by early next year, which include the installation of the pipeline, and the 230 KV transmission lines.

It was also noted that only firms found to be experienced in Engineering Procurement and Construction (EPC) and Financing of comparable facilities, will be evaluated.

Interested parties can obtain a copy of the RFP document from the Permanent Secretary of the Prime Minister’s Office for a fee of $25,000.

Proposals must be submitted to the National Procurement and Tender Board Administration (NPTAB) by 2 PM on November 14, 2024. Proposals should include detailed financial projections of revenue, expenses, and investment returns.

Upon completion, the gas-to-energy project will have a significant impact on the country’s economy, attracting sustainable investments across various sectors and creating numerous job opportunities.

The project aligns with the administration’s plan to secure reliable, cheap electricity, while also transitioning the country from a net importer to a net exporter of cooking gas.

The government is also awaiting a US$660 million loan from the US EXIM Bank to advance the project.

Consultants hired by the bank spent several months in Guyana conducting thorough assessments of the project’s environmental and technical feasibility.

According to Vice President, Dr Bharrat Jagdeo, the assessments confirmed that the project is technically sound.

With the due diligence phase complete, the project will now be submitted for review by the EXIM Bank’s Board.

“They’re aiming to go to the board by [the] October board meeting but all of the technical and environmental work has been completed and they have all of the information necessary to go to the board,” the VP said during a previous press conference.

Despite delays in securing the US$660 million loan from EXIM Bank, the government has allocated US$400 million from its resources to ensure continued progress on the project. In addition to the Gas-to-Energy (GTE) project, the Guyanese government is exploring the development of a second major gas project. The government has initiated discussions with the US-based company, Fulcrum LNG, to assess the feasibility of this new venture.