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Diverting natural gas to shore technically feasible, could lower electricity cost – Exxon Country Manager

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OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

As Guyana moves closer to first oil in 2020, US super-major ExxonMobil and authorities in the South American country have been mulling the feasibility of diverting natural gas from the production reservoir offshore, to land, for electricity generation.

ExxonMobil Country Manager, Rod Henson, in his first interview since assuming the post in Guyana, told OilNOW on Tuesday that based on preliminary investigations, diverting natural gas to shore is technically feasible, but the study of making this a reality is still in the early stages. “Working with the government we’ve done the reservoir studies that say we could divert some gas to shore which would ultimately be converted into electricity. Technically it’s feasible…but I do also want to caution we’re early in on all the study work there,” he said.

When oil production begins, some of the associated gas will be used to operate the Floating Production Storage and Offloading (FPSO) vessel offshore while the rest will be reinjected into the reservoir, in keeping with standard practice in the industry. Discussions have been ongoing between ExxonMobil and the Guyana government for a proposed project to utilize some of that natural gas for energy generation by the Guyana Power and Light (GPL) Company, the country’s sole electricity generating entity.

The cost for electricity in Guyana is one of the highest in the region. This, coupled with unreliable power supply, have for decades hampered the country’s development.

Henson acknowledged that the ability to provide more affordable electricity with the use of natural gas will serve to significantly benefit the country as a whole.

“It could touch everybody…it could lower electricity prices, lower energy prices for individuals. But there is a multiplier effect too. If you lower energy prices for businesses it is really an enabler to help the economy, to help all businesses…,” he stated.

The Country Manager pointed out that there is a proven correlation between energy use and quality of life and the role it plays in bringing people up to the middle class. “In order to do that you need cheap affordable energy,” he pointed out.

ExxonMobil, Henson said, is doing its part by “coming to the table with technology and ideas” to see how best the diversion of natural gas to shore can become a reality.

 

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