Prime Minister Mark Phillips has disclosed that ExxonMobil subsidiary – Esso Exploration and Production Guyana Limited (EEPGL) –  is funding the construction of the pipeline for the Gas-to-Shore Project at a cost of US$1 Billion.

“EEPGL is funding the…US$1B project cost from cost oil,” Prime Minister Phillips said in his written response to a series of questions posed by the Opposition Member of Parliament, Volda Lawrence.

Last December, the Government signed a US$759M contract with CH4 Lindsayca for the construction of a gas-to-shore project at Wales, however, according to the Prime Minister, that cost did not include the pipeline cost.

“The pipeline cost is US$1B which includes the entire pipeline, enabling works, contingencies, and supervision by Exxon for infrastructural development,” the Prime Minister explained.

It was explained that the Engineering, Procurement and Construction (EPC) cost – US$759M – for the 300 MW CC Power Plant and the Natural Gas Liquids (NGL) plant, also does not include the supervision contract of US$23M.

According to the Prime Minister, while the Government is funding the EPC costs through the National Budget over a multi-year period – 2022 to 2025 – it will be required to repay the oil company over a 20-year-period.

“When the project is completed, Government will make an annual payment to EEPGL co-venturers over a 20-year period to recover the cost of their investment in the pipeline used to deliver a minimum of 50 million cubic feet of gas/day (MCFD) to Wales. The total cost of electricity exiting the power plan which includes (i) the payment to EPPGL Co-Venturers, (ii) operating costs of power plant/NGL plant, and (iii) recovery of capital costs, shall be less than US 5 cents per KWh,” the Prime Minister explained.

He noted that too that while the Government looks to fund the EPC costs through the National Budget, it expects to fund a portion of the EPC Contract from loan financing to be pursued in 2023.

Related posts:

Guyana to pay ExxonMobil US$55M per year for 20 years for gas-to-shore pipeline Jagdeo dismisses criticism of multi-billion dollar gas to energy project Exxon to recover investment in gas to energy project through sale of gas to power plants Contractor identified for gas-to-shore project at Wales -President Ali announces