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Requirement to re-inject, utilise Natural Gas, makes gas-to-shore pipeline not economically viable – Dr. Janette Bulkan
Kaieteur News – University of British Colombia (UBC) Professor and noted Guyanese Environmentalist, Dr. Janette Bulkan, has recently raised the concern that the proposed Natural Gas pipeline might not be viable as it may lack the required volume for operation.
Dr. Janette Bulkan
Dr. Bulkan notes that Section 12 (1) (a) of the ExxonMobil production sharing agreement signed on 27 June 2016 provides that ‘the Associated Gas produced from any Oil Field within the Contract Area shall be with priority used for the purposes related to the operations of production and production enhancement of Oil Fields, such as Gas Injection, Gas Lifting and power generation.’ Section 12.3 (c) provides that ‘The Contractor shall have the right to use Natural Gas, both Associated Gas and Non-Associated Gas, as may be required for Oil Field and Gas Field operations, including the right to re-inject for pressure maintenance and enhanced recovery without charge, fee or royalty.’ Furthermore, she posits that such a requirement has persisted, as the modified environmental management issued to Exxon/EEPGL by the Environmental Protection Agency on 12 May 2021 confirms in Section 3.12 that ‘Gas is to be re-injected into the reservoir or utilised as fuel gas on the FPSO during normal operations.’
Dr. Bulkan goes on to cite ExxonMobil, quoting from a post on the oil giant’s Facebook page ‘We are currently re-injecting and consuming more than 96 percent of the gas produced.’ In light of the aforementioned, she posits that the 16 million scfd (standard cubic feet per day) of Associated Gas that has been routinely flared since production started in December 2019 was an aberration from what was intended by the petroleum major and Guyana as re-injection of the gas to maintain reservoir pressure is the norm.
She notes that the process of re-injection is a vital component of petroleum exploration as re-injection of gas maintains reservoir pressure and that in turn allows the operator to extract more petroleum from a specific wellhead. If the operator chooses instead to flare that gas into the atmosphere or to transport it via a pipeline to a processing plant, then it becomes uneconomic sooner to extract the remaining oil which may later leak out of the capped well and pollute the ocean and living organisms in the marine ecosystem.
She goes on to state that “If only 4 percent of the Associated Gas is now surplus from the FPSO Liza Destiny with a nameplate production of 120,000 bopd (barrels of oil per day), and if FPSO Liza Unity will be on-station this year and producing at the nameplate 220,000 bopd and with the same proportion of Associated Gas, and if the FPSO now under construction for the Payara field is rated also at 220,000 bopd, the proposed gas-to-shore pipeline planned for 50 million standard cubic feet per day (mscfd) appears to be not viable.”
Her reasoning is that “FPSO Liza Destiny would have 4 percent of 16 mscfd = 0.64 mscfd, Liza Unity and the FPSO Liza Prosperity for the Payara field would have 1.17 mscfd each. This means that there will be a total of less than 3 mscfd available from the first three FPSOs for a pipeline intended for 50 mscfd.” This leads her to conclude that the pipeline would simply uneconomic to operate and that it may not be technically possible to operate at all with such a low volume.
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