Govt launches public consultations for National Gas Strategy

– says catering for gas will enhance Guyana as investment destination

Consultations for the National Gas Strategy have been launched by the government through the Ministry of Natural Resources, with the strategy catering to the infrastructure to develop Guyana’s natural gas potential will only enhance the country’s reputation as an investment destination.
The draft strategy was released on Monday, with November 14, 2023, set as the deadline for submissions from the public. According to the Ministry in a statement, the strategy will be a vital tool to guide the management of Guyana’s natural gas resources, ensuring that informed decisions are made on how to use the gas.
“The Stabroek Block, along with the Corentyne Block, holds substantial gas resources. Ongoing exploration and appraisal activities are underway to determine the full extent of Guyana’s gas resources. To date, the sanctioned projects in the Stabroek Block are exclusively oil-focused, including the Whiptail project currently under review.”
“At Pluma, Haimara, and other discoveries with condensate, reviews are ongoing. The Ministry of Natural Resources hereby invites public engagement, including input from industry stakeholders and experts, to contribute to a productive discourse on the gas strategy. The insights and recommendations gathered during this period will play a crucial role in shaping the nation’s energy future,” the Ministry statement said.
Meanwhile, the strategy itself explains that in order to ensure the timely monetization of Guyana’s gas resources, “new gas monetization options and solutions need to be developed, including the participation of additional players in the O&G value chain besides the upstream project developers.”
According to the draft, there are many benefits from natural gas and derived products. However, the strategy stressed that time is of the essence due to market forces and uncertainties associated with the pace of the energy transition and ensuring that “new O&G producers have a fair and just opportunity to develop their natural resources.”
Meanwhile, the strategy notes that the development of deepwater gas is more complex and expensive than traditional, non-associated gas fields. According to the strategy, based on appraisals two very distinct areas in the Stabroek block can be distinguished… the northern and southern parts.
“It is important to note that this gas condensate/low liquid yield resources are trapping a large proportion of the discovered oil, that will not be able to be developed and monetized unless infrastructure solutions for the evacuation of gas are put in place in tandem with the associated gas that is being recycled today in the current production operations.”
“Much scope remains for further exploration in the Guyana-Suriname Basin… providing infrastructure solutions for future gas developments will significantly enhance the attractiveness of the licensing round and will continue to make Guyana one of the best basins in the world to invest,” the strategy further states.
The monetization of Guyana’s vast gas reserves has been described by Vice President Bharrat Jagdeo as the next wave of economic opportunity for Guyana, seeing as the country has some 17 trillion cubic feet of associated gas.
During an interview with S&P Global a few months ago, Jagdeo had noted that the conversation has moved from ExxonMobil wanting to reinject the gas they found in the Stabroek Block, to Exxon helping Guyana to develop it. This partnership has stretched to the gas-to-energy project, where ExxonMobil is funding the pipeline and associated infrastructure.
In Budget 2023, the gas-to-energy project received a $43.3 billion allocation. This allocation is in addition to the $24.6 billion injected into the start-up of the transformational project, which includes the construction of an integrated Natural Gas Liquid (NGL) plant and the 300-megawatt (MW) combined cycle power plant at Wales, West Bank Demerara (WBD).
The NGL and 300 MW power plant components of the Gas-to-Shore Project are meanwhile expected to cost US$759.8 million and will be financed through sources that include budgets and loan financing.
The scope of Guyana’s gas-to-energy project consists of 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. It features approximately 200 kilometres of a subsea pipeline offshore that will run from Liza Destiny and Liza Unity floating production, storage and offloading (FPSO) vessels in the Stabroek Block to the shore.
Upon landing on the West Coast Demerara shore, the pipeline would continue for approximately 25 kilometres to the NGL plant at Wales, West Bank Demerara. 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.
The pipeline’s route onshore would follow the same path as the fibre optic cables, and will terminate at Hermitage, part of the Wales Development Zone (WDZ) which will house the Gas-to-Shore Project.
A sum of US$55 million per annum will be paid to ExxonMobil in amortisation costs for the pipelines to be installed in the gas-to energy project, which will allow Guyana to, in turn, save and earn ten times that amount. (G-8)