Govt. reviewing ExxonMobil’s study on options for nation’s 17 trillion gas reserves

Jan 21, 2023 News

Kaieteur News – Senior Finance Minister, Dr. Ashni Singh recently disclosed that government is in receipt of a study from ExxonMobil Corporation affiliate, Esso Exploration and Production Guyana Limited (EEPGL) regarding the utilization of the nation’s gas resources.

As the oil company continues its hunt for more sweet crude in the Stabroek block, Dr. Singh said the gas resources are increasing. In fact, they have moved from 16 trillion to over 17 trillion standard cubic feet.

The gas study done by the oil giant is one of the requirements of the Petroleum Production Licence (PPL) awarded for ExxonMobil’s Yellowtail Project.

According to provisions of the PPL, the oil company is required to conduct a Gas Utilization Study which would examine the associated and non-associated gas available from all approved petroleum production licences (i.e: Liza 1, Liza 2, Payara and Yellowtail) as well as other discovered resources in the Stabroek Block.

Senior Finance Minister, Dr. Ashni Singh

This study is expected to consider over the short, medium and long-term, a forecast of potential gas production for export from existing oil ships and the expected use that gas will be put to.

The PPL notes that study shall also consider scenarios for the demand that might be expected for gas sales locally, in South America, regionally (the countries bordering Guyana) and internationally; as well as consider the cost and feasibility of gas export as Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG).

Furthermore, the licence states that EEPGL must examine the feasibility of utilizing the existing and planned wells, flowlines, risers and production facilities for the export of gas both during and after the currently planned oil production phase.

Additionally, the company must also determine the feasibility and cost of adding gas export equipment, wells, well workovers, flowlines, meters, risers and pipelines for export gas not included in the original Field Development Plan (FDP) submission costs. EEPGL is also expected to provide potential gas export rates and profiles which are determined at minimum and maximum feasible rates verified by reservoir modelling.

It should be noted that the Gas Utilization Study is in addition to the requirement under Article 1 (b) of the Stabroek Block Petroleum Agreement which outlines that for each Field Development Plan that does not utilise all available associated gas for operations or to enhance oil production, it must include an Excess Gas Feasibility study within five years of a development plan submission.

The licensee is therefore required, if the Gas Utilisation Study determines that gas is available at Liza Phase 1 Liza Phase 2, Payara, Yellowtail or any other developments, to submit the individual gas feasibility studies as per the Stabroek Block Production Sharing Agreement (PSA).

While Exxon’s study is being reviewed, Minister Singh has said that government has also commenced work on the revision of the Liza Field Development Plan and Licence which will allow for the production of natural gas for commercial usage in Guyana. He reminded that the country is expected to export, at a minimum, about 50 million standard cubic feet of gas per day through Liza Destiny and Unity ships, in the initial phase.

The gas-to-energy project will see a power plant being constructed to generate 250 megawatts (MW) of power and a Natural Gas Liquids (NGL) plant to cover Guyana’s domestic demand for other natural gas products.

US-based partnership CH4/Lindsayca won the contract to construct the 300 megawatts (MW) combined cycle power plant and natural gas liquids facility. It is doing so at a cost of US$898 million.

As for the construction of the pipeline for which Exxon is responsible, this is expected to cost upward of US$1.3 billion. The current estimate for the project is therefore expected to be approximately US$2.2 billion.

Engineers India Limited will supervise the Engineering, Procurement and Construction (EPC) of the onshore plant facility. It is expected to hire another form to operate the project.

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Dr. Ashni Singh, Esso Exploration and Production Guyana Limited (EEPGL), ExxonMobil, Petroleum Production Licence (PPL), Senior Finance Minister

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