ExxonMobil’s part of Gas-to-Energy Project to cost US$1.3 billion

Apr 21, 2022 News

– Higher estimate to follow wrap-up of major contracts

By Kiana Wilburg

Kaieteur News – ExxonMobil’s subsidiary- Esso Exploration and Production Guyana Limited (EEPGL), has revealed that the country’s imminent gas-to-energy (GTE) project, to be based at Wales in Region Three, will cost way more than the initial US$900M.

Map depicting the Offshore Component of the Gas-to-Energy Project

In fact, the aspect of the project for which the oil company is responsible, that is to say the installation of the offshore and onshore pipelines, is set to cost a whopping US$1.3B. This was noted in the Environmental Impact Assessment (EIA) that was prepared for the project. In the EIA, EEPGL said it has not yet made a Final Investment Decision (FID) on the project, and is continuing to evaluate cost considerations during the project development process. But for the time being, it said the current project cost estimate is approximately $260 billion GYD ($1.3 billion USD). It warned, “A higher certainty cost estimate will be developed after receiving and negotiating all major contracts.”
Additionally, the project summary notes that Esso Exploration and Production Guyana Limited (EEPGL), on behalf of itself and its coventurers (Hess Guyana Exploration Limited and CNOOC Petroleum Guyana Limited), is awaiting an environmental authorization from the Environmental Protection Agency (EPA) for the GTE.
It was explained that the project will use natural gas produced from the Liza One and Two projects in the Stabroek Block, and transport that resource via offshore and onshore pipeline networks to a natural gas power plant. EEPGL was keen to note that the Government of Guyana will be handling the construction of the power plant. It is therefore subjected to a separate Environmental Authorization process. The plant thus, is not included in the EIA (with the exception that it is considered as part of the cumulative impact assessment).
Expounding further, EEPGL said the project will involve capturing associated gas produced from crude oil production operations on the Liza Phase 1 (Destiny) and Liza Phase 2 (Unity) Floating, Production, Storage, and Offloading (FPSO) vessels, transporting approximately 50 million standard cubic feet per day of rich gas via a subsea pipeline and then to an onshore pipeline to a natural gas liquids (NGL) processing plant (NGL Plant), treating the gas to remove NGLs (i.e., propane, butane, and pentanes+) for sale to third parties, and ultimately delivering dry gas meeting government specifications for use at the power plant.
Construction is expected to begin as soon as possible after the oil company receives all necessary authorizations with a target date of August 2022 for start of NGL Plant site preparation, and will take approximately three years. The combined offshore and onshore pipeline system is targeted to be ready to deliver rich gas by end of 2024, and the NGL Plant is targeted to be operational by mid-2025.
The project has a planned life cycle of at least 25 years and is expected to employ up to 800 workers at peak during the Construction stage, approximately 40 full-time equivalents workers during the Operations stage, and approximately 50 workers during the Decommissioning stage.
Kaieteur News understands that the EIA was prepared by ERM, in association with the Guyanese consultancies E&A Consultants, Inc. (E&A), Caribbean Engineering & Management Consultants Inc. (CEMCO), the University of Guyana Centre for the Study of Biological Diversity (CSBD), and Leon Moore Nature Experience (LMNE); Trinidadian consultant Caribbean Transportation Consultancy Services Company Limited (CARITRANS); and U.S.-based consultant SLR International Corporation (SLR).

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