The Guyana government has approved a proposal presented by Minister of Public Infrastructure, David Patterson, to contract Energy Narrative for an eight week desk study on the options, costs, economic impact and key considerations of transporting and utilising natural gas from offshore Guyana for electricity generation.
The company will be looking to also verify information supplied by ExxonMobil as it relates to the amount of natural gas that will be made available to Guyana as a result of the crude oil drilling activities to commence in 2020 offshore Guyana in the Stabroek Block.
Minister of State Joseph Harmon, today (April 27, 2017) announced that government has already inked a contract for the eight week study at a cost of US$70,000.
The news of the contract come days after Minister with responsibility for Natural Resources, Raphael Trotman, announced to a parliamentary committee that according to information supplied by ExxonMobil, some, “50 million cubic feet per day which, by calculation, may give the country a 200 megawatt natural gas energy generating plant.”
In announcing the contract for the study awarded to Energy Narrative, Minister Harmon told reporters at the Ministry of the Presidency, “Energy Narrative is an experienced company in the energy sector in the Caribbean and understands the challenges of developing natural gas infrastructure and adapting electricity sectors to accommodate natural gas.”
Energy Narrative, he said, was asked to submit a financial and technical proposal which would cover among other areas, the proposed work methodology and a review of the terms of reference among other considerations.
Minister Harmon said the company is expected to include in its study a verification of natural gas projections, a verification of natural gas demand projections, as well as to analyze the technical feasibility of a proposed natural gas pipeline.
According to Minister Harmon, the company will be looking to compare the use of a natural gas pipeline with other transportation mediums, as well as to analyze the technical feasibility of existing power generation equipment and integrating new natural gas energy generation equipment.
While there has been no firm proposal flouted as yet for the construction of a pipeline, Minister Harmon said the company will be studying the costs of delivering natural gas to power generation facilities along with the estimated impact on electricity prices locally. “It’s a desktop study and therefore it is expected that the company with the experience that it has in the Caribbean and further afield it will provide government with that information and they will basically generate their own information.”
Minister Trotman recently told the parliamentary committee tasked with oversight of the natural resources sector that Guyana would certainly not be flaring the gas but will be selling some of it to neighbouring countries and possibly power an alumina plant. “The idea of the alumina plant can now become feasible and real again because a plant of that nature and size requires high energy and the natural gas plant could produce that energy,” the minister said.
Guyana’s closed its alumina plant in 1982, resulting in the country exporting only unprocessed bauxite that is much cheaper than the refined mineral.
Trotman did seek to assure at the time that companies such as ExxonMobil would in fact seek to manage expectations in the data supplied but, “Government is using several different means of corroborating and cross referencing the information….so in the process that we are currently doing – that is approving or going through the application for the production license, this is one of the things that will have to be verified and we’re using other independent sources and contractors to tell us what there is,” he said.
He said, too, that at time of production government will install the relevant equipment to independently measure the oil and gas at the point of extraction. “At the time of production, one of the things we will have to do is put almost gauges and pumps so that we can independently verify quantities so, if it is that we are moving a hundred thousand barrels per day, that is what it is… There is going to be real-time monitoring onshore and on the vessel by personnel on a 24-hour basis to ensure that the production is as it said it would be,” said the Minister of Natural Resources.