CGX, Govt. agree: Berbice Port to be built in stages to match Guyana’s cargo capacity

Aug 31, 2023 ExxonMobil, News, Oil & Gas

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By Kiana Wilburg

Kaieteur News – CGX Energy Inc. has expressed its alignment with recent remarks by Vice President, Dr. Bharrat Jagdeo, that its Berbice Port Project is not being constructed at the moment to be a “deepwater” facility that caters to Panamax-sized vessels. These massive tankers range between 200 and 250 metres (650 and 820 feet) and have capacities of 50,000 to 80,000 dwt.

CGX said the project is actually being constructed in a phased manner that enables it to meet the country’s existing cargo capacity.

At a previous press conference, Jagdeo told media operatives that the port would not deliver deepwater services given the country’s current cargo capacity.

This newspaper subsequently contacted CGX which said it endorses the Vice President’s comments. During an exclusive interview on Wednesday, CGX further noted, “…Guyana at this time simply does not have the cargo volumes required to justify Panamax-sized vessels.”

CGX pointed out that it has organized the Berbice port development in phases, in keeping with expected volumes and types of cargo.  The company said that this is exactly why its phased approach was adopted. It said, “The first dredging of the facility will be to 7.5 meters at low tide, which would allow it to accommodate all vessels supplying the oil and gas sector and additionally all cargo-related vessels currently entering Port Georgetown in the Demerara River.”

The company also said that it is in complete alignment with the Vice President’s identification of cargo from Brazil which is crucial to justifying a true deepwater port in Guyana that could accommodate Panamax-sized vessels.

CGX pointed out also that its capital expenditures have been matched to predicted levels of cargo in order to project a reasonable rate of return on the company’s investments.

CGX indicated also that it is very much looking forward to the government’s importation of aggregates and to accommodating rice and sugar exports as well as the importation of fertilizers and consumer goods.

Recently, Kaieteur News reported that in keeping with the company’s phased approach, continued investments are linked to securing contracts for the use of the port. In keeping with this focus, CGX said that in August 2023, the company met with key growers of corn, rice, and soybeans, soybean crushers, transportation companies, and livestock companies in the Northern Brazilian State of Roraima.

At this meeting, CGX said several barriers to the Guyana Gateway solution for Brazilian cargo were identified and discussed and will also be communicated to the government.  The Company indicated that the Government of Guyana’s move to construct concrete bridges along the Lethem to Linden Road is an important aspect of strengthening this linkage.

CGX indicated that if some amount of Brazilian cargo can begin coming over the road and along the Berbice River, this would justify CGX moving to the next planned stage of Berbice River dredging, allowing the Company to handle handy-sized vessels of 50,000 tons and require a depth of 9.5 m at low tide.

This will also likely need to be a programme supported, in part, by the Government as is currently done in the Demerara River, given the national benefits of having transformative ports of entry.  The company said it has already completed the design work for this dredging, but work will not be undertaken unless justified by cargo volumes and related contracts.

The final move to a depth to accommodate Panamax-size vessels, as indicated by the Vice President, would require a robust transportation link and a concerted effort between the Government and the companies involved. In this regard, CGX said it chose the Grand Island location because several international studies, including by the Indian Government and the Inter-American Development Bank (IDB) highly recommended this site as ideal for a deepwater harbour.  However, in alignment with the Vice President’s comments, the company said that this is a process that must be managed in phases as the amount of cargo to be handled justifies the expenditure to dredge.

The company said it saw no misalignment between the Vice President’s comments and its stated and publicized objectives in terms of dredged depths or accommodation of cargo volumes.

The Vice President has been a proponent of the Guyana Gateway solution for the Northern States of Brazil dating back several decades from the time he was the President of Guyana.

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• deepwater, Dr. Bharrat Jagdeo, Kiana Wilburg, Panamax, Vice President

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