In a filing with the U.S. Securities and Exchange Commission, Hess Corporation said 375 billion cubic feet of natural gas is estimated to be subject to sales commitments under the Gas-to-Energy project in Guyana.
The Guyana government will utilize the gas primarily for domestic power generation, significantly increasing the country’s power generation capacity and replacing heavy fuel oil (HFO) as the main source.
The committed volume is roughly equivalent to 50 million cubic feet of gas per day over 20 years, the amount to be transported through the Gas-to-Energy pipeline ExxonMobil is installing. The 130-mile pipeline will connect ExxonMobil’s Liza 1 and 2 projects to an onshore integrated gas processing facility at Wales.
Hess said it has annual minimum net sales commitments of approximately 2.6 billion cubic feet of natural gas per year following project commissioning. Hess has a 30% stake in the Stabroek Block, which includes the Liza field. ExxonMobil is the operator with a 45% stake, while CNOOC holds 25%.
Hess noted that ExxonMobil expects to complete pipeline construction and field hook-up by the end of 2024. However, the gas is not expected to flow until the onshore facility is built, sometime in 2025.
While the gas will be subjected to a sales agreement, Vice President Bharrat Jagdeo has said that the gas is free. However, the government expects to repay the Stabroek Block partners’ US$1 billion investment from the proceeds of natural gas liquids (NGL) sales over the project lifetime. Guyana plans to be a major NGL supplier for the region. It will be the first time gas discovered offshore Guyana is commercialized.
Currently, Exxon produces more than 600,000 barrels of oil per day (b/d) from the Stabroek Block, with approximately 400,000 b/d coming from the Liza field.
Read more: Guyana’s Gas-to-Energy project (The basics) | OilNOW
