Key Investment to Boost Power Generation and Energy Security

The government of Guyana has approved a substantial investment of $51.2 billion as part of its broader $141.45 billion budget. This will advance the country’s gas-to-energy (GtE) project. This Guyana gas-to-energy project investment aims to harness offshore natural gas resources. The project will expand electricity production and enhance the nation’s energy infrastructure.

The GtE project will feature a 300MW combined-cycle power plant and a natural gas liquids (NGL) facility. The goal is reducing reliance on imported fuel and lowering electricity costs. It is expected to significantly boost national energy security and contribute to the country’s long-term energy sustainability.

Energy Infrastructure Investment and Project Developments

A key part of the budget, $88 billion, will be allocated to strengthening Guyana’s energy infrastructure. This includes investments in natural gas and renewable energy projects. The government has emphasized that the GtE initiative is vital to achieving these goals. Additionally, the Guyana gas-to-energy project investment includes $36.2 billion for the construction of the natural gas power plant and the NGL facility. State-owned Guyana Power and Light (GPL) will receive $18 billion for the enhancement of electricity distribution networks.

Over $1 billion will be allocated for consultancy services to support ongoing energy projects. Another $18 billion will be used to manage fuel price volatility and ensure stable electricity rates for consumers.

The GtE project will involve a 225km pipeline. It is being constructed by an ExxonMobil-led consortium, which will transport natural gas from the Stabroek Block offshore oil fields to onshore processing facilities in Wales, West Bank Demerara. With significant investment, the Guyana gas-to-energy project will supply up to 130 million standard cubic feet of gas per day. ExxonMobil is working with contractors including Subsea7, Van Oord, TechnipFMC, SICIM, and GAICO for the pipeline installation. CH4 Lindsayca is overseeing the development of the power plant and NGL facility.

Delays and Future Expansion Plans

Despite initial expectations to begin operations by 2024, the project has faced delays due to equipment delivery issues and contractual disputes. Therefore, the startup date for the Guyana gas-to-energy project investment has been revised to Q4 2025, with total costs rising from $1.7 billion to approximately $1.9 billion.

In addition to the first phase, the government has indicated that a second phase of the GtE project is under consideration. This phase would further expand power generation capacity and support industrial growth. Plans for an additional gas-to-shore initiative, to complement the ongoing development in Wales, are also being evaluated.

In support of the project’s financing, the Guyanese government has applied for a $660 million loan from the US Export-Import Bank. This follows preliminary approval for a loan guarantee exceeding $500 million in November 2024.