Idle gas pipeline to be preserved until power plant is commissioned - Exxon Guyana

Idle gas pipeline to be preserved until power plant is commissioned – Exxon Guyana

May 04, 2024 ExxonMobil, News, Oil & Gas

President of ExxonMobil Guyana, Alistair Routledge addressing members of the media during a press conference

Kaieteur News – The 12-inch gas pipeline being constructed by ExxonMobil Guyana Limited (EMGL) will be delivered by the company by the end of this year, however, the power plant and Natural Gas Liquids (NGL) facility will not be completed until the following year.

In light of the foregoing, the company will be required to conduct additional works to ensure the structure is safe to operate when the other components of the Gas-to-Energy (GTE) project have been completed.

This is according to President of ExxonMobil Guyana Limited, Alistair Routledge. The Country Manager of the company during a press conference on Tuesday at Exxon’s Duke Street, Kingston, Georgetown office explained that it was not unusual for varying elements of a major project to be come on stream at separate dates.

As such, he pointed to measures that will be taken by Exxon to secure the US$1B pipeline. “What we will do is we’ll complete the pipeline and we will make sure that it is secure. Generally we will leave it within an earth gas like nitrogen, perhaps with treated water, we are looking at the details of that depending upon how long we think it will be left idle until we are ready to commission it with gas which would be when we already know that the plant is ready to receive gas,” Routledge said.

He added, “We’ll do the testing of its integrity, but there will be a blind flange on the end of it waiting for the new plant to be connected and in the meantime we will just keep that pipeline if you like, in earth and safe, ready to go for the operation.”

Repayment

Notably, Exxon was asked about its repayment for the 225 kilometers offshore and onshore pipeline since it was previously reported that the Government of Guyana (GoG) would be paying the company for its investment through the purchase of gas.

Exxon was specifically asked to say when compensation would commence for the structure. To this end, the Country Manager said, “The payment for gas does not start until the gas is flowing or at least until we get to the critical step. There’s no material impact to the country or the government from the delays other than the delay to people seeing the benefits…”

Be that as it may, the 2018 to 2020 audit report indicates that the company is deducting Guyana’s oil to repay the pipeline costs. It was reported that the audit, conducted by VHE Consulting, found ExxonMobil spent some US$2.1M on the project during the period under review, which was billed to Guyana’s oil.

This newspaper therefore asked the Exxon official to clarify whether cost recovery for the pipeline has begun.

According to him, “Cost go into one cost recovery bank, that is fair to say so cost in general are being recovered. I think the number we talked about last time is we’ve invested around US$30B and around US19-US$20B have recovered to date, so it’s a question of what you consider to have been recovered at this stage but I would say they are in that overall cost bank but no additional costs or revenues are being gained from the gas pipeline until the gas starts to flow.”

cost, gas, GTE, oil, repay

Latest News