The pipeline to support Guyana’s gas development in East Berbice-Corentyne (Region Six) could cost about US$2 billion or more. This is according to President of ExxonMobil Guyana Limited (EMGL), Alistair Routledge, speaking during a press conference on March 19.
The large-scale project will see mainly non-associated natural gas being transported from the Stabroek Block offshore Guyana to Berbice, where it would support the development of a major industrial hub.
Routledge said interest in new investments linked to gas development is growing, and the pipeline infrastructure for this particular project would require major capital.
“It costs roughly a billion dollars to lay a pipeline and put the risers in to supply gas from the Liza field to Wales in region three, to do similar for Berbice in larger volumes, a larger pipeline could easily be $2 billion or more, not a small investment, two billion US dollars,” he told the press.
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Routledge explained that large projects would be needed to support the early stages of a domestic gas market. “We can see a real interest in building a domestic gas market, which in the early stages will require us to have some large anchor projects.” He said these projects are large enough to generate the offshore gas demand needed to justify investing in significant infrastructure.
He said market demand is a key factor before advancing the project. “In order to be comfortable that we move forward, we have to know that there’s a market for the gas that will pay for the gas at a price that can sustain that kind of investment.”
Routledge said the company is working with potential investors to establish the commercial chain. “It’s so important that we work with these other companies that are in direct interest in making these other investments in the country, so we can line out that commercial value chain.”
Routledge emphasized that both sides must commit: his company must reliably supply gas, and the other party must be prepared to receive it.
He said the development could eventually support smaller users as well. Once they reach that threshold, he said, this will create opportunities for smaller off-takers such as glass manufacturers or other small plants that need only limited amounts of gas, but for which this option would be far more efficient than importing liquid fuels.
Potential gas supply sources for the project could include the proposed Longtail development, a possible project in the Southeast Gas Area of the Stabroek Block, and future gas volumes from the Liza and Hammerhead fields. Gas from Liza is expected to begin supplying the Wales Gas development.
Read more about the project here: Everything we know so far about the Berbice Gas Development
