Gas to energy project awaits review with govt- ExxonMobil

Last Updated on Thursday, 9 February 2023, 15:39 by Denis Chabrol

ExxonMobil is awaiting the outcome of a review of the multi-million United States (US) dollar gas-to-energy project before making its Final Investment Decision (FID), though preliminary works have started along the route of the pipeline in the West Bank Demerara, a senior official said Thursday.

“We are in review process with the Ministry of Natural Resources currently on the Field Development Plan and the update to the licence for the Liza field. Once we have gone through that step,  we’d be able to make all the Final commitments, Final Investment Decision around all the investments that are needed,” President of ExxonMobil Guyana Alistair Routledge told a news conference. He said in order to ensure that the gas-to-energy plant begins electricity generation in 2024, the company has been pushing ahead with “early works” for roads, bridges and laydown areas on the West Bank Demerara. The Guyana government has already contracted an American joint venture, CH/LINDSAYCA, to build the natural gas-fired electricity plant and the natural gas liquids plant for US$759 million.

Mr Routledge said ExxonMobil last year submitted revisions to the Lisa Field Development Plan that are required in order to lay the pipeline, the risers and other equipment to connect the offshore facilities to onshore and to amend the Field Development Plan accordingly.

Mr Routledge said ExxonMobil  would be selling the 50 million cubic feet of natural gas per day to the government entity for use at the electricity generation and natural gas liquids plants. “We will be selling the full 50 million cubic feet a day to the government or a government entity that is being established in order tor receive the gas and put it through the power station,” he said.

He added that the revenues from the sale of gas to the Guyana government are expected to cover the cost of the more than 200 kilometre long gas pipeline that is pegged just under US$1 billion while delivering low-cost electricity to Guyanese. “In some way, it needs to recover that cost so the way that’s been agreed is ok, let’s make sure that a price is put on the gas that reflects just that cost of infrastructure; no profit, just the cost of infrastructure and what that means is that it delivers gas at a very low price to the country, very competitive,” he added. Mr Routledge said it is on that basis that the Guyana government has been saying that natural-gas produced electricity would cost 50 percent less than current fuels.

So far, ExxonMobil last year November obtained the environmental permit for the gas-to-energy project

The ExxonMobil President restated that the operator in the Stabroek Block has verified that 50 million cubic feet of natural gas could be supplied to the government plans without adversely affecting the extraction of oil.  “We’ve done a lot of studies on the reservoir, on how its performing, the injection of gas, the injection of water and we’ve determined that we can release up to 50 million cubic feet a day of gas without impacting in any significant way on recovery of the oil,” Mr Routledge added.

ExxonMobil is currently producing more than 380,000 barrels per day of crude from Liza 1 and Liza II and intends to push that up to more than 600,000 barrels per day when the Payara field comes on stream.

The company is pushing ahead with plans to eventually develop the Yellowtail, Uaru and Whiptail fields.