Guyana does not have market to utilise gas from fourth project - says export alternatives may be needed

Guyana does not have market to utilise gas from fourth project – says export alternatives may be needed

Oct 21, 2021 News

ExxonMobil warns in EIA Report…

By Kiana Wilburg

Kaieteur News – American oil giant ExxonMobil and the PPP/C Government have already initiated plans to handle the excess gas from the Liza Phase One, Liza Phase Two, and Payara projects. The solution is to have the resource utilised via a US$900M gas-to-shore venture. But with ExxonMobil intent on bringing a fourth oil project onboard by 2026, another dilemma lies ahead—what would be done with the associated gas?
According to the Environmental Impact Assessment (EIA) submitted to the Environmental Protection Agency (EPA) for the Yellowtail Project, there is significant gas for which Guyana simply does not have enough market to offtake.
With this in mind, ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), said three primary alternatives were considered. They include gas re-injection, continuous flaring, and gas export.
The company was keen to note that gas re-injection was determined to be feasible for the project, while adding that it also provides benefits in terms of reservoir management by helping to maintain pressure in the reservoir (thereby increasing the amount of crude oil that can be recovered over time) and reduced air emissions (as compared to continuous flaring). Under this alternative, EEPGL said associated gas not used as fuel gas on the FPSO will be re-injected under normal operations.
With respect to continuous flaring of the associated gas on a routine basis, it said this is not preferred, primarily due to the associated air emissions. Taking this into consideration, the company said gas export alternatives for future development continue to be evaluated, with due consideration of the challenges related to commercialisation of associated gas.
EEPGL recalled at this point that there is currently a separate project being proposed to transport a portion of the gas from the Liza Development Projects to shore, where it would be used to generate power in a gas-fired power plant. Since this would satisfy the currently identified gas demand in Guyana, ExxonMobil warned, “There is not enough additional demand in Guyana to consume the quantities of associated gas that will be produced from the Yellowtail Development Project.”
With this in mind, the subsidiary said any proposal for implementation of gas export would be addressed under a separate environmental authorisation process, and is therefore outside the scope of this EIA.

ABOUT THE YELLOWTAIL PROJECT
EEPGL, on behalf of itself and its co-venturers, Hess Corporation and CNOOC Petroleum Guyana Limited, is seeking an environmental authorisation from the Environmental Protection Agency for a fourth project development in the eastern half of the Stabroek Block. The area that will be developed as part of the Project is located approximately 203 kilometres (approximately 126 miles) northeast of the coastline of Georgetown, Guyana.
As part of its regulatory role, the EPA, considering recommendations from the Environmental Advisory Board and other government entities, is responsible for deciding whether and under what conditions to grant EEPGL’s application for environmental authorisation which was filed with the EPA on April 1, 2021.
Based on an initial assessment of the application, the EPA determined that an Environmental Impact Assessment (EIA) was required in support of the Application. The purpose of the EIA is to provide the factual and technical basis required by the EPA to make an informed decision on EEPGL’s application for environmental authorisation.
According to project documents, Yellowtail will consist of the drilling of approximately 41 to 67 development wells (including production, water injection, and gas re-injection wells); installation and operation of Subsea umbilicals, Risers, and Flowlines equipment; installation and operation of a Floating Production, Storage, and Offloading (FPSO) vessel in the eastern half of the Stabroek Block and— ultimately—Project decommissioning.
EEPGL has said the FPSO will be designed to produce up to 250,000 barrels of oil per day.
Onshore logistical support facilities and marine/aviation services will be used to support each stage of the Project. EEPGL is expected to use proven and good international oilfield practices. The company said it has incorporated many embedded controls into the overall Project design to reduce environmental and socioeconomic impacts.
The initial production is expected to begin by the end of 2025–early 2026, with operations continuing for at least 20 years. The project is expected to employ up to 540 persons during development well drilling, approximately 600 persons at the peak of the installation stage, and 100 to 140 persons during production operations.