Guyana’s natural gas is emerging as a long-term growth engine, but financing for major projects will depend on early commercial decisions and strong contractual clarity, Josh Loftus, Director at EY Energy Markets Group, said on February 17.
Loftus made the remarks during a panel discussion on project financing on day 1 of the fifth edition of the Guyana Energy Conference and Supply Chain Expo.
He said gas was never simply a transition fuel. “It’s exciting that we’re starting to use natural gas as a growth engine,” Loftus said.
“That’s why the commodity has such a strong narrative right now. At the same time, from a project finance or developer perspective – depending on where you sit – the ecosystem is still in the early stage of optionality. The question is: do I use the gas as a petrochemical feedstock? Do I use it to power the domestic market? Do I liquefy it and export it to foreign markets or supply data centres?” he said.
According to the Houston-based Group Director, a central finding is that natural gas projects require earlier and clearer strategic decisions than oil projects. He noted that, unlike oil, which has a liquid global market and easier storage, gas faces logistical constraints.
Loftus said Liquefied Natural Gas (LNG) provides export flexibility, but it introduces high operating costs and boil-off management challenges.
“A lot of the conversations we’ve heard suggest that developers have to make upfront decisions…from a commercial standpoint, the gas market is not as liquid as oil. LNG is really the only way to achieve energy density comparable to oil, but it comes with substantial operating costs. Your inventory doesn’t want to stay as inventory — it naturally boils off — which adds complexity and expense….in the end, long-term contracts and strong counterparty credit become critical to making these projects bankable,” he explained.
Because of this, Loftus added that countries like Guyana must provide transparent regulatory frameworks, consistent policy signals, and credible long-term energy strategies to attract sustained project finance capital.
In June 2024, the government of Guyana reaffirmed its commitment to full transparency as plans advance on landmark gas development projects.
