The Guyana government appears ready to take more bold but cautious steps in the hydrocarbon arena as it is focusing some of its energy on creating a gas strategy with the assistance of its West African counterpart, Ghana.
Confirming this last week at the International Energy Conference was Vice President, Dr. Bharrat Jagdeo.
The official who oversees the country’s oil policies said, “It was a high energy conference with lots of rich contributions from locals and foreigners and I believe many of the global players are clear now on where we are headed in this industry…I am happy about this, and I think the focus for us is now on implementing our plans. I think also coming out of this, we will see many more people coming to Guyana to forge partnerships related to oil and gas.”
The Vice President also acknowledged that the conference generated greater interest in Guyana’s gas reserves and the plans of the government to optimize this resource. He said however that the government is keen on crafting a gas strategy while noting that work has already started on this front.
“The success of that strategy will be determined largely by the extent to which we can utilize the associated gas and that will unfold during the course of the year; it may not have the same sense of urgency as the gas-to-energy project and we are well advanced on that in terms of its implementation,” the Vice President said. “We are in the process of prequalifying the bidders and very soon the request for proposals will be out before the end of the year. We are looking to award the contract and the timeline is aggressive there so work is advancing on both fronts.”
He added that legislation to govern the gas subsector would follow the strategy defined by the government. He noted that Ghana is already open to providing its assistance as needed.
During the unveiling of the GY$552.9B budget which is backed by revenues from Guyana’s Natural Resource Fund, Senior Minister with responsibility for Finance, Dr. Ashni Singh had said that the current estimate of the gas reserve is 16 trillion cubic feet (Tcf) with projections from Liza 1 and 2 likely at 50 million standard cubic feet per day (mmscfd) while Payara will bring an additional 20 mmscfd. While it is the consensus among members of government that this augurs extremely well for the Gas-to-Energy Project, it is the projections by ExxonMobil in the Environmental Impact Assessment (EIA) for the Yellowtail development that really support the notion for Guyana to consider being a gas exporter.
Since Liza Phase 1, Liza Phase 2 and Payara would satisfy the currently identified gas demand in Guyana, Exxon stressed that there is not enough additional demand in Guyana to consume the quantities of associated gas that will be produced from the Yellowtail project which is expected to peak at around 450 mmscfd. It said, “A decision with respect to the export of gas from the Yellowtail project will be made in the future. But gas export to shore or another phase of field development may be considered. Space reservation and basic design connections to allow for this are included in the project scope.”
With respect to negotiations on the price to transport gas via the gas-to-energy project, Dr. Jagdeo said these are continuing with the hope for the completion of an agreement this month.
He assured that the model agreed upon would be explained to the citizenry.