Latest update February 24th, 2025 9:02 AM
Guyana still negotiating sales agreement to buy its own Natural Gas
…as company insists on finalised deal before going ahead with US$900M project
Kaieteur News – The Guyana Government is forging ahead with a proposed gas-to-shore energy project, but among the requirements needed by ExxonMobil Guyana before it proceeds with its end of the commitments to the project, are a few critical documents that need to be finalised.
Vice President, Bharrat Jagdeo
This includes a Gas Sales Agreement, despite the fact that Vice President, Bharrat Jagdeo, has, on more than one occasion, made several pronouncements on the matter ranging from the gas being provided free of cost, to the fact, that Guyana would not pay above market rates.
Nonetheless, the agreement is among the prerequisites listed by ExxonMobil before going ahead with the project.
According to a 2018 Secret Cabinet Paper seen by this publication, the considerations on the part of the government that need to be communicated to ExxonMobil before it makes a Final Investment Decision, is the site location.
This is in addition to submitting a ‘Draft Gas Sales Agreement.’
Accompanying this, ExxonMobil noted that government would also have to consider with expediency, the signatories to that agreement, the ownership of the power plant, the purchaser of gas at the power plant, consensus on how government intends to handle participation in the gas sales, and the handling of third party rights. None of these has been concluded to date.
Despite this, government has indicated that the termination point for the proposed gas pipeline will be the Wales Development Zone (WDZ) on the West Bank of Demerara, having landed onshore at Crane, West Coast Demerara.
It was during a scoping meeting that was held by ExxonMobil Guyana in July last, in collaboration with the Environmental Protection Agency (EPA), where it was disclosed that ExxonMobil would be selling the Natural gas liquids to third parties and the portion that remains, being dry gas, would be sold to Guyana for its electricity needs.
Confirming this at the Umana Yana was ExxonMobil Guyana’s Production Manager, Mike Ryan.
During that engagement with citizens and members of the media on the project, Ryan was asked to say if Natural gas liquids would be sold to Guyana.
He did not give a direct answer, but confirmed that the gas would be sold to third parties, while adding, that ExxonMobil would not know the final destination of the gas after that.
It should be noted that ExxonMobil, in collaboration with the government, is moving ahead with this project at a time when the world is moving away from fossil-fuels based projects. In May, for example, this newspaper had reported on the United Nations’ (UN) call for a shift in the policy of countries worldwide, to move away from supporting fossil fuel projects through financing, such as subsidies towards renewable energy, and the promotion of the transfer of technology to developing countries.
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