Exxon starts talks today on bringing natural gas to shore for electricity

Sep 19, 2017 News

Government is hoping that it can eventually strike a deal where natural gas from Exxon’s Liza1 well can be brought to shore to help power Guyana.

The first in a series of continued discussions on commercial and power generation issues will be held when officers of the Government of Guyana and technical members of ExxonMobil meet in Georgetown today.
The technical working group is scheduled to convene today and tomorrow. It will feature technical persons from the Ministry of Public Infrastructure, Ministry of Natural Resources, Ministry of Finance, Ministry of Business, Guyana Energy Agency, and the Guyana Power and Light Inc., along with ExxonMobil’s power generation specialists and analysts.
According to the Ministry of Public Infrastructure (MPI) yesterday, the working group will focus on natural gas and the surrounding commercial and economic issues as it relates to offshore transportation for onshore power generation.
Compared to Guyana’s current use of liquid fuels for electricity generation, natural gas is cleaner. Its use for energy production could reduce the country’s fuel bill, and in turn, reduce the cost of electricity.
Guyana is heavily dependent of importation of fossil fuel for the running of its engines across the country for fuel generation. It accounts for a major chunk of foreign exchange with the Guyana Power and Lights Inc. (GPL) which spends up to US$100M annually to import oil.
MPI said that the working group will continue dialogue on local and international power generation experiences, including domestic infrastructural requirements and considerations for the potential of natural gas into gas-fired power generation.
It has been said that Guyana’s current engines, the majority of them Finnish-made, by Wartsila, can easily be configured to use natural gas, from the normal diesel and heavy oil.
“The agenda will also include an overview of commercial power generation structures and approaches to power investment. It is expected that capacity building for local and key technical government officials will be the major output of the two-day session,” MPI disclosed.
ExxonMobil, a US-owned company, and its partners have discovered a major oil deposit in its concessions about 100 miles offshore Georgetown. A number of other wells have tapped the oil to be around 2.8B barrels of oil.
ExxonMobil is planning to start pumping gas in 2020.
With a natural gas likely to be produced during the process, which is way cheaper and cleaner than fossil fuel, Guyana has been talking about configuring its engines to use natural gas. The problem will be bringing it to the shore.
According to MPI, today’s talks will be particularly important in light of the recent consultations held by the Ministry of Natural Resources on local content policy and its focus on maximising benefits and value retention from Guyana’s petroleum resources through local content and capacity development.
“As the first of such sessions, the Government of Guyana looks forward to furthering its understanding of the technical and key dynamics of proposed projects in an effort to diversify the energy mix in Guyana,” Minister of Public Infrastructure, David Patterson explained.
Patterson further emphasised that the sessions will not serve as an occasion for negotiations or review of contractual obligations between Guyana and ExxonMobil.
Rather, he said, “It is intended to continue dialogue, with an intended wrap-up summary, including presentations, updating key ministries on the joint discussions having taken place over the two day session.”
Guyana has been seriously exploring other sources of electricity with the now infamous Amaila Falls Hydroelectric Project falling through a few years ago.

Manufacturers have been complaining that electricity is costly and accounts for a major part of their expenditure, making them uncompetitive.

7 thoughts on “Exxon starts talks today on bringing natural gas to shore for electricity”

powerplayer September 19, 2017 at 12:03 pm

Another reason for Refinery in Guyana
1. Kassem_B September 19, 2017 at 4:19 pm
  
  But Co-Own by the people of Guyana
2. sep timo September 21, 2017 at 12:42 pm
  
  Refinery is a risky business (not saying Guyana shouldn’t own or co-own) just be aware of the risks before going in. There is a lot to worry about with refineries, and many of them we would have little or no control over, which may put us at a distinct disadvantage compared to others (whether its a public or private sector venture). Since Guyana would be the supplier of Oil to the refinery, there is already a good opportunity to make money there without worrying about the risk of ownership. They could also consider a deal where Guyana can take a minimal stake (3-5%) at the beginning and have the option to get more shares in the future. A good way to hedge on the potential risks without putting the money of the people of Guyana at significant risk.
Pam September 19, 2017 at 1:27 pm

‘Exxon start talks’ and not ‘Exxon starts talks’. Disgusting!
Kassem_B September 21, 2017 at 9:43 am

Thanks
But the Paris Agreement is for 100 % RE by year 2025
I spent my entire adult life in the Oil and Gas Industry and as a combustion specialist as part of my job profile and know a few things about Natural Gas and what they emit
1. sep timo September 21, 2017 at 12:35 pm
  
  no doubt natural gas will emit CO2 and other products which go against the protocol; but in Guyana’s favor is the fact that there would be less emissions than with our current fuels, and in the general scope of things and compared to other users/emitters around the world we are small potatoes. Now with respect to 100% RE by year 2025, that is an open issue. There has yet to be a concrete plan from the current government or any political party in Guyana for that matter on how they could either achieve or get us on a trajectory to that ambitious goal. That would be crucial for Guyana’s future since fossil fuels in general are a finite resource and we need to think about the long term.
  1. Kassem_B September 21, 2017 at 2:23 pm
    
    ‘ Now with respect to 100% RE by year 2025, that is an open issue. ‘I did my Masters with the above my Dissertation.
    It can be achieved.
    The PPP is relying on the Amaila Falls as their solution which cannot be written off as yet.
    The Alliance have not as yet provided any plan to achieve 100% by year 2025 and my criticism over the period.
    With the continuous development of storage battery a combination (Hybrid) of Solar and Wind can achieve it but with prior research on optimum installation locations and to determine and the split between Solar and Wind.
    Among my recommendation was:
    Starting with pilot plant not far from UG to develop expertise and the location referred to, and to make recommendations.
    Full scale Installation must be (preferred) 4 locations:
    West of Essequibo river
    Between Essequibo and Demerara rivers
    Between Demerara and Berbice Rivers
    East of Berbice river.
    Expertises initially to be developed at the Pilot Plant
    Then the full installation at the 4 locations.
    Each location to be self govern with their own expertices and management.
    The capital and operating costs of hybrid solar and wind is decreasing all the time but not so for Hydro.
    A costs analysis of CAPEX and OPEX must be done by a reputable outfit before either Project to go ahead.