ExxonMobil proposes another energy plant to take off massive amounts of gas from 4th & 5th projects  

Jan 11, 2023 News

---

Kaieteur News – In light of the significant quantities of gas that will be produced from ExxonMobil Corporation’s Yellowtail and Uaru Projects in the Stabroek Block, the oil giant has floated for consideration, the establishment of another onshore processing facility.

This recommendation was provided in its Environmental Impact Assessment (EIA) for its already sanctioned Yellowtail Project. The suggestion was also repeated in the EIA for the Uaru project, which is awaiting government approval.

Currently, authorities are building an over US$2B gas-to-energy project that will utilize excess gas from the Liza Phase One and Liza Phase Two Projects. That venture is expected to come on stream by 2024 and last for 20 years.

Given the massive amount of gas that will be available from the Yellowtail and Uaru developments, Exxon said the supporting ships will be built to allow Guyana the option to export gas, be it to onshore facilities or further afield.

According to the EIA for the Uaru development, Exxon’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) said it contains material quantities of associated gas.

The subsidiary said a key use for this associated gas is for fuel in gas turbines for power generation on the Floating, Production, Storage and Offloading (FPSO) vessel. EEPGL said gas not used as fuel is then available for alternative uses. In this regard, EEPGL said there are three primary options: flaring, re-injection, and export.

It was noted that routine flaring of associated gas is a method to deal with natural gas production in oil developments but introduces significant environmental hazards and would not meet regulatory expectations in Guyana.

EEPGL said its subsurface studies indicated significant value in gas re-injection for reservoir pressure maintenance and recovery uplift purposes, thus supporting related facilities investment. EEPGL said it worked extensively with leading gas compression contractors on studies that ultimately confirmed the technical feasibility of reinjecting gas into the Uaru, Mako and Snoek development fields.

Further, EEPGL said gas export options were also considered. In this regard, it noted that there is currently a separate project being proposed to transport a portion of the gas (on the order of 50 Million Standard Cubic Feet of Gas Per day –Mscfd) from the Liza Phase 1 and Liza Two FPSOs to shore, where it would be used to generate power in a gas-fired power plant.

As this project would satisfy the currently identified gas demand in Guyana, the EIA said there is not enough additional demand in Guyana to consume the quantities of associated gas that will be produced from the Uaru Project which is expected to peak at around 540 MMscfd.

The EIA said, “A decision with respect to the export of gas from the Uaru Project will be made in the future; gas export to shore or another phase of field development may be considered.”

Whatever Guyana’s decision is, Exxon said space reservation and basic design connections to allow for export are included in the project scope.

For the time being, it said gas re-injection was selected for associated gas management due to the additional oil recovery it provides, the environmental advantage it represents as compared to flaring, and the limited availability of feasible gas export options.

It should be noted that EEPGL made similar recommendations for its US$10B Yellowtail Project. In the EIA for that development, the subsidiary said there is not enough additional demand in Guyana to consume the quantities of associated gas that will be produced from the Project which is expected to peak at around 450 MMscfd.

It said, “A decision with respect to the export of gas from the Yellowtail Project will be made in the future; gas export to shore or another phase of field development may be considered. Space reservation and basic design connections to allow for this are included in the Project scope.”

The same was also noted in the EIA for the US$9B Payara Project. In that document, EEPGL said too that there is currently a very limited gas industry in Guyana; hence, there is not enough room for the domestic consumption of gas from this project. For Payara, gas is expected to peak around 395 MMscfd.

While gas export facilities were not installed on the Payara FPSO due to the operator’s strategy to maximize gas injection, Kaieteur News understands that they can be added if future gas export from Payara is pursued.

Taking the foregoing projects into consideration, Guyana would be producing over 1.4 billion cubic feet of gas. Notably, the PPP/C Government has said that a gas strategy is being worked on to determine how Guyana will utilize this resource.

In the meantime, Exxon already has its sight set on presenting a sixth project for approval this year. It is also eyeing a seventh ship for next year.

---

• Block, EIA, ExxonMobil, oil, Stabroek, Yellowtail

---