Minister of Natural Resources Vickram Bharrat.
GEORGETOWN, Guyana--Once gas production exceeds local demand, Caribbean Community CARICOM Member States will be given first preference to purchase the excess commodity.
This is according to Minister of Natural Resources Vickram Bharrat, who said a number of those countries have already approached the Guyana government.
“Once we develop that and we have excess gas, obviously our CARICOM partners will be persons who we will turn to and speak to, because we’ve developed a good relationship through the chairmanship of our president at CARICOM. CARICOM has been re-energised and revitalised and they’re looking to Guyana for support especially from the oil and gas sector, so I don’t see us looking past our CARICOM sister countries before we go to other countries,” he stated during a press conference on Wednesday.
Works are currently progressing on the Gas to Energy (GtE) project, which will utilise gas from the Liza Phase 1 and 2 projects in the Stabroek Block, offshore Guyana. This project includes the construction of an integrated natural gas liquid (NGL) plant and a 300-megawatt (MW) combined cycle power plant at Wales, West Bank Demerara (WBD).
With an expected startup timeline of early 2025, the project will bring 50 million standard cubic feet of gas per day onshore.
But Minister Bharrat noted that the demand for energy is constantly increasing and therefore, the government will need to look at a second major gas project to offset local demand in the near future.
“The demand for energy will increase, so we will require far more than the 300MW in a couple years’ time. [Therefore – Ed.,] it is a bit premature now to say who we can sell to and how much we can sell to them,” he explained.
Recently, Vice President Dr. Bharrat Jagdeo had announced that the government’s second major gas project is expected to launch in Berbice.
Currently, ExxonMobil Guyana, which is the operator of the oil-rich Stabroek Block that it co-owns, is responsible for laying the pipeline that will transport associated gas from the Liza Phase 1 and 2 Projects offshore to the onshore gas-processing facilities at Wales.
While the government is working with a number of partners to establish the NGL and the power plant components, ExxonMobil is laying 200 kilometres (km) of subsea pipeline from the “Liza Destiny” and “Liza Unity” floating production, storage and offloading (FPSO) vessels to the shore. Upon landing on the West Coast Demerara shore, the pipeline will continue for approximately 25km to the NGL plant at Wales.
The pipeline will be 12 inches wide and is expected to transport some 50 million standard cubic feet per day (mscfpd) of dry gas to the processing facilities, but it can push as much as 120mscfpd.
Even as ExxonMobil is expected to deliver the pipeline by year end, the construction of the power plant and NGL facility has been delayed by at least six months.
The contractor, a US-based consortium – Lindsayca CH4 Guyana Inc. LNDCH4, is engaged in a disagreement with government over the timelines of the project and associated costs.
LNDCH4, which was awarded a US $759 million contract in November 2022 to build the power plant and NGL facility, is making financial claims to the tune of US $50 million over delays from other components of the project that were overseen by ExxonMobil, saying that the late handover would affect its delivery according to contractual timelines.
The Guyana government has rejected the claim, resulting in the contractor moving to a dispute resolution mechanism that would see a three-member board set up to mediate between the two parties. In light of the delays, government has extended the deadline, but the contractor is not satisfied and wants more time.
Meanwhile, other projects including Hammerhead and Longtail will eventually begin production and will produce even more gas.
“We were told too that the Longtail development will provide more gas than the other two developments,” the natural resources minister explained.
In the Stabroek Block, some 17 trillion cubic feet of gas have already been found, with the Pluma and Haimara wells being proven gas fields. The government is currently actively seeking to develop this gas. A technical team has already been assembled to examine its viability.
Bu the vice president had explained that the government does not intend to participate financially in the second gas project.
Requests for Bids (RFBs) for the design, financing, construction and operation of essential gas infrastructure to support upstream developments in Guyana were published both locally and internationally.
In response, 17 companies, including the US energy firm Fulcrum LNG, submitted proposals. The US energy firm was identified as the most responsive and compliant bidder, ranking number one. As a result, Fulcrum LNG was selected as the company that will support the government and the Stabroek Block operator ExxonMobil in utilising the non-associated gas.
The Guyana government has openly stated that one of its primary objectives in the oil and gas sector is the development of the country’s natural gas resources, with a gas monetisation strategy already developed.
With this drive to push gas development, the government has already informed ExxonMobil that it will have to relinquish the gas fields if it does not seek to develop the gas.
It was reported in May that the company’s drill programme for the year includes plans to further appraise two well sites, to gauge the commercial potential for gas in the Haimara gas field.
Back in 2019 and 2023, ExxonMobil had drilled for gas at the Haimara 1 and 2 wells, though with varying degrees of success. The oil giant is now gearing up for further appraisal drilling, this time at the Haimara 3 and 4 gas wells. ~ iNews Guyana ~
