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ExxonMobil tells Govt. private investors in gas project will require incentives to survive
Kaieteur News – The Government of Guyana is currently actively pursuing private investors for joint participation in gas related projects to accompany a Natural gas fired power plant to primarily power an industrial park at the Wales Development Zone (WDZ), West Bank Demerara (WBD), in addition to the national grid.
The related gas ventures such as the production of urea/fertiliser and other associate products are expected to be financially challenging and will require significant incentives on the part of the government such as tax breaks and waivers in order for any such venture to be deemed feasible.
This much was disclosed to the administration following a site assessment that was conducted by Stabroek Block Operator, ExxonMobil Guyana.
In a summary of the findings that were presented to Cabinet in 2018, it was documented that ExxonMobil had progressed feasibility studies for the potential commercialisation of gas volumes in the event future discoveries identify suitable gas supplies above gas-to-power requirements.
It was found that “analysis has highlighted that while economics are challenged, requiring incentives, methanol and urea (fertiliser) producing large-scale industrial facilities appear to be the more likely viable foundation industries for investors.”
As it relates to Methanol, ExxonMobil had recommended that export vessels would require deep water draft and as such pursuit of such a venture sees an export pipeline connected to offshore loading buoy in deeper water appearing to provide a viable Guyana coastline export solution.
As it relates to Urea, it was noted that granular product with viable road-based sales domestically and potentially to immediate neighbouring countries is likely viable but screening assessment revealed the need for the construction of extended jetty and loading berths for direct regional exports via 5000 DWT vessels requiring 3-6M water depth.
The Ministry of Natural Resources had earlier this year invited private investors to provide an Expression of Interest (EoI) to partake in Joint participation in the proposed gas-to-shore project with the government and Esso Exploration and Production Guyana Limited (EEPGL)—ExxonMobil Guyana.
According to the advertised EoI, the government and EEPGL are looking for partners “in designing or utilising the outputs from an NGL (Natural Gas Liquids)/LPG (Liquified Petroleum Gas) facility and related facilities.”
This includes, according to the Ministry, design, construction, and financing of a power plant fuelled by Natural gas, where the power will be delivered into the Guyana Power and Light’s (GPL) distribution grid.
This is in addition to industries that can utilise Natural gas for, “Natural gas driven developments and growth.”
According to that invitation, the decision on Wales was taken after extensive evaluation of multiple sites with ExxonMobil Guyana Limited.
The Wales Development Zone (WDZ), it said, has been identified as the termination point for the pipeline from the Liza Area in the Stabroek Block, offshore Guyana.
The WDZ encompasses over 14,000 plus acres of land of which approximately 1,300 acres will be set aside for heavy Industry/gas-related investments. The project, according to stakeholders, is expected to see some 27 kilometres of pipeline being buried from the Crane, West Coast Demerara (WCD) location to Wales, in addition to some 200 plus kilometres of pipeline from the Stabroek Block where the Liza Destiny Floating Production Storage and Offloading Vessel is located.
According to the administration, WDZ will be the location for the termination of the gas-pipeline measuring over 225 km from the Liza Area.
Additionally, it will involve the establishment of a gas-processing plant (GPP) and a Natural gas liquids facility (NGL) capable of producing at least 4,000 bbl./day, including the fractionation of liquefied petroleum gas (LPG).
With regards to the use of additional gases, the invitation detailed that responses dealing with NGLs should provide details of expectations on markets (local and regional), expected input prices, expected sale prices, level of investment on required infrastructure, proposed changes to the current configuration of the existing market, and ability to work with local partners and Government.
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