In a comprehensive presentation delivered at Moray House on March 9, 2024, Thomas B. Singh, Director of the University of Guyana GREEN Institute, offered an in-depth analysis of Guyana’s Gas Monetization Strategy (GGMS) and its implications for the nation’s energy future. The focus of Singh’s presentation was the Government of Guyana’s ambitious Gas to Energy (GtE) project, a key component of the country’s broader strategy to utilize its substantial natural gas resources.
Singh highlighted the Guyana-Suriname Basin’s (GSB) enormous potential, citing U.S. Geological Survey(USGS) estimates of 36.8 trillion cubic feet (Tcf) of gas, with 17 Tcf in the Stabroek Block alone. This vast resource could provide between 2000 and 3400 years of power supply at the current consumption rates, a staggering figure that underscores the importance of a well-considered approach to gas monetization.
A significant portion of Singh’s presentation addressed the challenges and considerations of managing natural/associated gas, a by-product of crude oil extraction. He noted the practices of reinjection and flaring, pointing out the environmental and economic implications of each. On November 24, 2023, for instance, 135 million standard cubic feet (MMscf) of gas were flared, more than double the daily requirement projected for 2030.
Singh took a critical look at the Guyana Gas Monetization Strategy’s (GGMS) emphasis on developing infrastructure necessary to transport (or “evacuate”) natural gas and on establishing an environment that encourages private companies to invest in and lead these gas infrastructure projects. His critique focused on several key areas:
- Comprehensive Nature of the Strategy
Singh questioned whether the GGMS thoroughly addresses all necessary aspects of utilizing Guyana’s natural gas resources and seemed to suggest that the strategy might not be fully developed in terms of outlining a complete plan for the gas sector’s development. - Contractual Aspects with Operators in the Stabroek Block
The Stabroek Block is a significant source of natural gas in Guyana. Singh raised concerns about the agreements between the Guyanese government and the companies operating in this area. These contractual aspects include the terms under which gas is extracted, shared, and managed, potentially impacting how benefits are distributed between the operators and the nation. - Pricing of Natural/Associated Gas
Associated gas is a by-product of oil extraction, and its pricing is crucial for determining the economic viability of gas projects. Singh highlighted concerns about how the gas, particularly the gas that is not used domestically and might be available for export or other uses, is valued. This pricing affects the revenue generated from gas and the incentives for companies to invest in infrastructure. - Utilization Post-Evacuation
Referring to how the natural gas is used after it has been transported from the production site, Singh questioned whether the GGMS adequately addresses the end-use of the gas. This includes whether the gas will be used for domestic energy production, exported, converted into other products, or utilized in other ways to benefit Guyana’s economy and meet its energy needs.
The presentation also touched on the International Energy Economics and Financial Analysis (IEEFA)’s assessment of the GtE project, pointing out concerns about the potential for an overbuilt electrical system, the project’s substantial cost, and the implications for Guyana’s commitment to renewable energy. Singh argued that the reliance on natural gas might lock Guyana into outdated technologies and overlook opportunities for economic diversification and decarbonization.
Singh’s call for a reevaluation of Guyana’s economic philosophy resonated with attendees, urging a future-focused approach that leverages the country’s natural wealth not for “a future of the past” but for a sustainable and innovative “future of the future.”