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Natural gas-powered electricity generation feasible; East Demerara site identified for pipeline

ExxonMobil’s Stabroek Block concession offshore Guyana.

The use of natural gas for the state-owned Guyana Power and Light Inc. (GPL) to generate electricity has been found to be feasible and a site has already been identified to land a pipeline to bring the fuel ashore, Minister of Public Infrastructure, David Patterson said.

“It has been confirmed that it is feasible. It has been confirmed that it will be an absolute benefit to the country, has been confirmed-and I can say this and I will go out on a limb and say the numbers are all sub US 10 cents per megawatt hour,” he said.

Patterson said that now a location has been identified to land the natural gas pipeline, government would begin talks on the model to be used to competitively procure the power generation plants, enter into gas power sales agreement with GPL. “The main off-take of that natural gas in the initial stage will be for power generation,” he said.

“The question of the natural gas site, cabinet has pronounced on a site and which obviously triggers further technical studies which have commenced and are ongoing,” he told a cocktail reception to introduce newly-appointed GPL Chief Executive Officer, Albert Gordon. Patterson said government has been discussing with ExxonMobil taking the gas pipeline onshore Guyana to deliver the fuel.

A usually reliable ExxonMobil official was not immediately aware that a decision has been taken.

The gas pipeline is expected to come ashore at an East Coast Demerara village. Liza 1, the first well with commercially viable oil reserves was located more than 120 miles off Clonbrook-Mahaica.

Initially, ExxonMobil had said that commercial extraction of associated natural gas from its wells offshore Guyana would not be feasible and would be used to sustain the required pressure to extract oil and then pumped back into the reservoir.

ExxonMobil’s seventh oil discovery has since pushed up Guyana’s projected estimated daily oil production at 500,000 barrels.