Work ongoing with Govt to boost Gas-to-Energy pipeline’s supply – Routledge

…says potential for daily supply to go from 50M to 120M cubic ft. per day

While the Gas-to-Energy (GTE) pipelines are expected to be supplied initially with 50 million cubic feet of gas per day, oil giant ExxonMobil is working out a plan with the Government of Guyana to expand this daily supply to as much as 120 million cubic feet of gas.
In a recent interview on Energy Perspectives, ExxonMobil Guyana President Alistair Routledge delved into the subject of gas. As part of the GtE Project, ExxonMobil is building out the pipeline component of the project.
“The pipeline will be ready to start up by the end of 2024. And what we’re doing is working with the Government to align when do we start introducing gas into the pipeline to meet the schedule… integrated gas and power plant.”
The 12-inch pipelines will initially be supplied with 50 million cubic feet of gas per day (mcfpd). However, Routledge explained that his company is currently working with the Government so that this supply can be expanded eventually.
“The pipeline has additional capacity. So, we’ve been doing a lot of work, looking at the offshore fields that we’re developing. The ones that are already in production. And working out a plan for how can we then supplement the initial commitment of 50 mcfpd, in order to fill the pipeline up to 110 or 120 mcfpd.”
“That will then provide the additional fuel for more power or potentially other industrial uses such as fertiliser. So that’s work we’re doing in collaboration with the Government. Of course, the Government has the National Gas Strategy work that they’re doing. Those two efforts will synchronise together. So, we can ultimately align the timing of that demand for gas with the strategy,” Routledge also said.
The GtE Project consists of the construction of 225 kilometres of pipeline from the Stabroek Block offshore Guyana, where Exxon and its partners are currently producing oil. It will also see the construction of an Integrated Natural Gas Liquid (NGL) plant and a 300-megawatt (MW) combined cycle power plant at Wales, West Bank Demerara (WBD).
Lindsayca CH4 Guyana Inc (LNDCH4) was awarded the US$759 million contract in December 2022 to build the NGL facility, as well as the power plant. Initially, the deadline to deliver the power was this year end, but owing to delays in handing over other aspects of the project, the contractor was given a three-month extension.
However, LNDCH4 and the Guyana Government are currently in a dispute over the deadline and associated costs, resulting in an arbitration process being activated. The project is meanwhile expected to deliver power to the national grid by April 2025.

EXIM Bank approval
Back in April 2023, Guyana also approached US Export Import (EXIM) Bank for a US$761 million loan to finance the GtE Project. It was revealed last week by Vice President Dr Bharrat Jagdeo that the bank has approved the Guyana Government’s request for the multi-billion-dollar loan.

This announcement followed criticism from some naysayers, who had argued that the US Exim Bank would not approve financing for this particular project. There was also an attempt to block the financing from US EXIM Bank.
According to VP Jagdeo, the Guyana Government was waiting on the US finance institution to make the announcement first.
The US EXIM Bank’s approval comes on the heels of high-level due diligence done by the financial institution. The Guyana Government had stated that no fatal flaws were found during the technical and environmental assessments done by the bank.
Initially, the Government was aiming to borrow approximately US$645 million from the US Bank to fund the GtE initiative. Guyana was expected to put up the other US$100 million as advance payment to support the US$760 million initiative.
However, the Vice President explained that the loan approved was not the full amount that Guyana had requested. Rather, it would be around US$509 million. Guyana Times was informed that the full amount was not approved because not all components of the project will be procured from the US. As a result, financing will only cover the components purchased from that country.
While Guyana was awaiting the approval of this loan, Government had gone ahead and injected some US$400 million to commence work on the highly anticipated GtE Project. It was noted, too, that Guyana could potentially fund the entire initiative had the loan request not been approved by the US financial institution.