The Government’s decision to pursue the multi-billion-dollar Gas-to-Energy project at Wales was driven largely by Guyana’s uncompetitive electricity prices, which have discouraged investment and hampered economic growth, Minister of Public Utilities and Aviation Deodat Indar has said.
He was speaking about the country’s development plans on Thursday at the sod turning ceremony for the new US$75 million Houston Massy hub at Montrose, East Coast Demerara. Guyana’s electricity costs, which he pegged at around US$0.24 per kilowatt-hour, remain among the highest in the region, he said, and have been a major obstacle to industrial expansion and foreign investment.
“Energy costs in Guyana have not been competitive. We are around 24 cents per kilowatt. It is one of the highest… That is why our government saw it fit to invest in a power plant so we can cut the price in half,” Indar said, adding, “It has stymied development, it has stifled growth.”
According to him, high electricity costs account for approximately 30 per cent of operating expenses in the manufacturing sector, making Guyana an unattractive destination for many investors. It has discouraged investment in Guyana with many potential investors deciding against pursuing projects once electricity expenses are included in their costs, he said.
He said the gas-to-energy project is expected to substantially reduce the cost of cooking gas through domestic production of liquefied petroleum gas (LPG), while also laying the foundation for fertilizer manufacturing and other industries. “Cooking gas will be dirt cheap because it is our gas and we will manufacture the bottles right here. Right now, it’s about $5,000 for a bottle of gas.”
Furthermore, he noted that the availability of natural gas would also facilitate the local production of fertilizer, observing that natural gas accounts for between 70 and 90 per cent of fertilizer production costs. This, he said, would help reduce expenses for farmers and create opportunities for the establishment of a glass manufacturing industry in Guyana.
“So the next stage of our development is not just to continue infrastructure build-out but it’s the industrialisation of the country to manufacture things that we never did before,” the minister said.
The Wales Gas-to-Energy project, the largest infrastructure investment ever undertaken by the government, is designed to transport natural gas from the ExxonMobil-operated Liza fields offshore Guyana via a 225-kilometre pipeline to Wales, where the gas will be processed and used to generate electricity. The project includes a 300-megawatt power plant, a natural gas liquids (NGL) processing facility and associated transmission infrastructure.
The project, however, has faced several delays due to engineering challenges, including soil stabilisation issues at the Wales site and disputes with contractors. While the offshore pipeline component has already been completed by ExxonMobil, government officials now expect initial power generation to begin before the end of 2026, with the full 300-megawatt combined-cycle facility expected to become fully operational in 2027.
Critics have said that the long delay in completion of the project has meant that Guyana has had to spend massively on electricity generators powered by Heavy Fuel Oil. They point to the deals that were struck for two Turkish power ships as a prime example.
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