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Govt. still to decide on utilising excess natural gas from Exxon
The floating production storage and offloading (FPSO) vessel which will utilise some of the natural gas for production.
Minister for Natural Resources, Raphael Trotman said yesterday that the Government has not finalized whether to use the excess natural gas which will be available from United States oil giant ExxonMobil’s operations off the coast.
There are several studies being explored that involve laying a pipeline from the oil field to shore, with a portion used to generate electricity. Studies are also being done to examine the use of other natural gas byproducts.
“Government has said it wants to explore the use of that gas and that we will not be paying for it,” Trotman stated. He explained that the administration has to decide how they are going to raise money to generate and spread that generation across the country.
“That is how it is going to be done if we do decide to proceed, because we have not made a decision to use the gas at all,” the Minister stated.
Public Infrastructure Minister, David Patterson, has taken the lead on natural gas plans. He stated that ExxonMobil will not be involved in the entire process of Guyana’s natural gas production.
At this stage, only liquid petroleum gas (LPG) is being seriously considered, but there are other possibilities, which include urea and methanol.
Several companies have expressed interest in executing the government’s plan of using natural gas to generate electricity. At the moment, Government has engaged only Exxon on the pipeline plans.
“Exxon will not be involved in the entire chain. If any involvement, most likely it will stop at the pipeline to shore,” Patterson told Kaieteur News.
According to Patterson, all options including Public-Private Partnerships are being considered for natural gas. ExxonMobil and its partners will start oil production in another two years’ time. It is estimated that the natural gas to be produced daily is 30-50 million cubic feet.
ExxonMobil officials have told Kaieteur News that most of the associated gas will be used for re-injection to maintain pressure in the reservoir to increase production of oil.
Government is also considering an industrial park at the onshore location of the natural gas pipeline.
A final location to land the pipeline has not been determined. Sites under consideration include Regions Three and Four and Six.
Earlier this month, ExxonMobil announced the largest oil find to date in the Stabroek block, making it the sixth discovery offshore Guyana since 2015. The new discovery pushes the estimated amount of oil past 3.2B barrels found so far in the Stabroek block.
Under the Petroleum Agreement between Government, Exxon and its partners, it is stipulated that a plan of utilization of associated gas shall be included in the development plan for each oil field. If there is excess gas in the oil field after utilization, Exxon and its partners are mandated to carry out a feasibility study regarding the utilization of the excess gas.
The study is to be included in the development plan of the oil field or be completed no later than five years following the submission of the development plan.
Exxon and its partners are not required to make further investments in the excess associated gas, but the Government and the oil companies are allowed to carry out friendly negotiations in a timely manner to find a new solution to the utilization of the excess associated gas and reach an agreement in writing.
It points out that Exxon and its partners have the right, but not the obligation, to process natural gas for conversion to liquids, chemicals or similar gas utilization.
The agreement also gives Exxon and its partners the right to liquify the natural gas for sale as LNG and compressed natural gas (CNG).
Further, under the agreement, the companies are expected to pursue markets both within and outside Guyana and seek to market natural gas to the highest realization outlets after deduction of transportation costs.
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