ExxonMobil awaits Liza Field extension to prepare FID for gas-to-energy project – Routledge

– VP Jagdeo says project on track for 2024 timeline

ExxonMobil Guyana is expected to finalise its Final Investment Decision (FID) on the gas-to-energy project, in which it is investing over US$1 billion to build out the pipeline and assorted infrastructure, after the Government makes the necessary changes to the Liza Field production licence.
This is according to the President of ExxonMobil Guyana, Alistair Routledge, during a media engagement on Friday.

While preparatory work has already started for the model gas-to-energy (GtE) project, the United States oil giant has not yet made an FID on the project. The delay is related to the Guyana Government’s review of the revised Liza Field Development Plan (FDP), which has had to be updated so it can cater to the gas-to-energy project and the necessary infrastructure.
According to Routledge, the drafting of the FID requires formalising all the detailed documents, such as the FDP and revisions for the Liza Fields – both Phase One and Two – thus making sure that all of the commercial agreements are in place, as well as ensuring that there is sufficient length of the project life to provide the gas to support the project.
“And so the Government has decided that, in order to confirm the 10-year extension of the Liza production licence, it feels that it needs to take that to the Parliament, and that is the last step that is being worked on,” Routledge explained.
Last month, Guyana’s Vice President Dr Bharrat Jagdeo revealed that the review of the FDP for the Liza project has been completed, thus allowing for an extension of the Liza licence. The project is set to come on stream by 2024, but the Liza permit will expire in 2037. Since the gas project has a 20-year lifespan, the Liza licence needs to be extended to at least 2044.
The United Kingdom-based Bayphase had assisted Guyana with Exxon’s proposed amendments to the Liza FDP in order to facilitate the Gas-to-Energy initiative.
Once that extension is granted, ExxonMobil and its Stabroek Block co-venturers – Hess Corporation and CNOOC – will go ahead with the preparation of their FID.
With some preliminary work already started on the Gas-to-Energy project, Routledge said, this will preserve the startup schedule to be on target with the 2024 timeline.
In fact, VP Jagdeo on Thursday echoed similar sentiments, pointing out that the process is moving smoothly along. “The project will be completed on the timeline. So far, the timeline remains constant – end December 2024 – and there is no cause for shifting that timeline at this point in time,” he revealed.
Jagdeo’s remark was premised on the fact that the local Environmental Assessment Board recently upheld the decision of the Environmental Protection Agency (EPA) to not request a separate Environmental Impact Assessment (EIA) for the Gas-to-Energy project, which consists of a 300-megawatt (MW) power plant and Natural Gas Liquid (NGL) plant at Wales, West Bank Demerara.
The scope of the much-anticipated project also features the construction of 225 kilometres of pipeline from the Liza field in the Stabroek Block offshore Guyana, where Exxon and its partners are currently producing oil. The pipeline would be 12 inches wide and is expected to transport per day some 50 million standard cubic feet (mscfpd) of dry gas to the NGL plant, but it has the capacity to push as much as 120 mscfpd.
Based on studies conducted, Exxon would be able to produce up to 50 million cubic feet of gas per day for this initiative without impacting oil production activities offshore. This was reaffirmed on Friday by the US oil major, which said, “There is no uncertainty about the ability to deliver the gas for the GTE project. Extensive reservoir modelling shows that the gas could be committed for delivery, and we have determined that we can release up to 50 million cubic feet of gas per day without significant impact on oil recovery.”
Exxon’s statement was in response to a missive sent by the People’s National Congress Reform-led Opposition, which claims that there is no excess natural gas available in the Liza oil field, since it is all being used for oil production.
Earlier in the day, however, the ExxonMobil Guyana President explained the 50 million cubic feet of gas per day that was committed to the Government along with the amount of gas needed for fuel and reinject for oil liquids’ recovery is just about enough that there is in the Liza Field. Outside of that, he said, they do not believe that there is excess gas, but they are constantly looking at the gas availability in the field.
“But we think…in the modelling that we do, it’s right at the edge of the level of accuracy that we have. We’re only three years into the life of operating a huge field, and we’re trying to make forecasts over 20 to 30 years on how will the reservoirs perform. So, our agreement with the Government was: ‘It’s close enough, on a risk basis, that we could make available the 50 million cubic feet per day; and, over time, we will assess and work out what are the mitigation, what are other sources that we can find that will ensure that we don’t affect, in any substantial way, the recovery of liquids from the fields’,” Routledge noted.