Monday, September 26, 2022

Major Guyana offshore support base targeting 2022 start-up, could service up to 12 wells per year

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Work is on schedule for the operationalization of a major offshore oil and gas support shore base in Guyana by mid-2022 and for the operationalization of a containerized cargo, agricultural cargo and specialized cargo terminal by the end of 2023.

So says Canadian-based oil and gas company CGX Energy in an operational update released on Monday. The explorer said its subsidiary, Grand Canal Industrial Estates Inc. (GCIE) has been engaged in civil works related to the construction of the Berbice Deep Water Port (BDWP) on 30 acres of land on the eastern bank of the Berbice River, adjacent to Crab Island.

Currently, work is on-going on the access road and connecting bridge, relocation of utilities and major construction of the site along the Berbice River. Construction of the wharf platform and access trestle are currently scheduled to begin in September 2021.

The facility is designed to have a wharf platform of 220m length and 30m width, accessed by a 50m trestle. An approved dredging program is intended to ensure continual unencumbered access to supply and cargo vessels. Depth is targeted to be maintained at a 7 m (23 ft) low-tide draft within the berth area and access channel that leads to the BDWP pier.

The Company also owns and operates a 16 acres laydown yard in Berbice at Bramfield. This facility, located along the main Corentyne Highway, is fully permitted and operational as a logistics base and will also service the BDWP, which is located 3.2 km from the Bramfield Logistics Yard. The capital cost for the project to 2023 is currently estimated at US $70 million, with a further expansion to construct heavy lift and fabrication facilities being contemplated.

According to CGX, BDWP intends to service growing offshore demand in the oil and gas sector and significantly shorten supply routes, simplify logistics, and reduce cost and operational risk. Travel time from the BDWP to offshore fields is approximately 12 hours compared to approximately 2.5 days to regional ports currently used by operators. The BDWP port will enable provisioning of operators and vendors in territorial waters of both Guyana and Suriname.

The Company commissioned an independent market assessment study for the BDWP, conducted by Maritime & Transport Business Solutions (MTBS) of Rotterdam, The Netherlands. According to the MTBS marketing report, the BDWP is expected to service the demands of 1 offshore well in 2022 following start-up, growing to 7-12 offshore wells/year beginning in 2023. The BDWP is positioned to play a leading role in the expansion of the oil and gas sector in Guyana and Suriname. The MTBS report predicts revenue generation from 2022 related to offshore oil and gas services reaching approximately US$37 million by 2025 and steadily increasing thereafter. The life cycle of a producing field requires support, consumable supplies, equipment and services.

The BDWP’s containerized, specialized and agricultural cargo operations are targeted to be fully operational by the end of 2023. The MTBS marketing report predicts that by 2030, the port will handle over 835,000 tons of cargo, with 64% of this related to the export of rice. Approximately 30 – 50% of the rice grown in Guyana is produced in regions 5 and 6 and the BDWP will provide important support to this industry and service its expected growth. The BDWP report predicts revenue generation from the cargo handling operations of the port to reach approximately US$28 million by 2025 with steady growth predicted, reaching approximately US$37 million by 2030.

The Company also commissioned MTBS to prepare a financial model for the BDWP, with inputs from GCIE as well as other advisors and consultants such as Aqua & Terra Consultores Asociados S.A.S and SRKN’gineering and Associates Ltd. The financial model predicts that the payback year for the project is 2025 with an above industry average net present value and internal rate of return values.

CGX said this is a transformative project for the enablement of local content in the oil and gas industry and for the transformation of the country’s agricultural and commercial sectors.

“We are pleased to continue to advance our activities in what we believe is one of the world’s most important new oil and gas blocks in the last decade,” said Gabriel de Alba, Co-Chairman of CGX. “The CGX team has worked tirelessly to reach this point in coordination with all our stakeholders. We look forward to providing further details as soon as possible.”

Professor Suresh Narine, Executive Co-Chairman of CGX, said he is proud of the team for the progress made in the development of the Berbice port, which reflects the focus the Company has on the broader opportunities for the people and businesses of Guyana.

Artist impression of Berbice Deep Water Port

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