Wednesday, July 6, 2022

Natural Gas Liquids to be sold to 3rd parties when mega project comes on stream in 2024

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Natural Gas Liquids (NGL) from the US$900 million gas-to-energy project set to come on stream in Guyana by 2024 will be sold to third parties, ExxonMobil said last week, as public scoping meetings for the development that is expected to cut the country’s energy bill by half, got underway

NGLs are used as inputs for petrochemical plants, burned for space heat and cooking, and blended into vehicle fuel.

Scoping meetings are being held this month to solicit comments and recommendations from Guyanese on what they would want ExxonMobil to address in the Environmental Impact Assessment (EIA).

The EIA process is expected to evaluate potential environmental and socioeconomic impacts, propose strategies to manage or mitigate impacts, identify project benefits, and provide the factual and technical basis to make an informed decision on Exxon’s application for environmental authorisation.

The government has lauded the project as being one of the most crucial routes to unlocking Guyana’s potential for massive development. For years, the new oil-producing state has struggled with high electricity costs and authorities say this can finally be addressed once the project comes on stream.

ExxonMobil Guyana Production Manager, Mike Ryan, told participants at the first in-person scoping meeting held at the Umana Yana in Georgetown on Friday that the purpose of the project will be to recover and transport natural gas from offshore blocks to onshore facilities, extract natural gas liquids for sale to third parties, and treat the remaining “dry gas” for use as a fuel source for a power plant.

With this in mind, Ryan was asked by a member of the media to say if ExxonMobil would be selling the remaining dry gas to Guyana and if so, at what cost. Ryan in responding said, “The discussions with the government right now are part of the Stabroek Agreement. I don’t know the cost of that but that is part of the discussions ongoing with the government as far as the supply is [concerned].” Asked to confirm if the dry gas will be sold to the government, the Exxon official said it will be done through a third party, not the company. It will be from its subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) through a third party, Ryan added.

The gas-to-energy project consists of an offshore pipeline that would extend from the Liza Phase 1 and 2 projects at the Stabroek Block and come onshore, west of the Demerara River. The onshore pipeline and natural gas liquids plant would be located in Region Three.

Ryan said the project’s construction should take approximately 30 months to complete while adding that the project has a lifecycle of 25 years.

It was further noted that the gas pipeline will be 220 km long and 12 inches in diameter. It will be able to transport up to 50 million standard cubic feet of gas with 30 million cubic feet to come from Liza 1 and 20 million to be utilized from Liza 2.  The pipeline, OilNOW understands, will be laid on the seafloor in water depths less than 100m. Prior to the commencement of operations, the pipeline will be hydrostatically tested to ensure its integrity, ExxonMobil stated.

The offshore pipeline will then be connected to an underground pipeline onshore that will be 27 km and 12 inches in diameter. It is expected to follow existing roads/canals within a corridor selected by the government.

ExxonMobil noted in its project summary that construction will primarily involve open cut trenching with limited use of trenchless techniques such as horizontal direction drilling (HDD). This piece of infrastructure will take gas to the Natural Gas Liquids Plant to be located in the southern portion of the Wales Estate. It will measure 40 acres in size with an additional 100 acres adjacent to the property which may be temporarily disturbed during construction. The plant is expected to process natural gas to remove propane, butane, and pentane +liquids for sale. The remaining dry gas would be used to meet specifications for use as fuel to support a power plant.

A temporary material offloading facility will also be constructed and located on the West Bank of the Demerara River near the NGL plant. It will be used for offloading heavy modules and imported material or equipment. Its exact placement will be determined following environmental and engineering surveys.

The next scoping meeting for the project is scheduled for July 12 from 5: 30 to 7:30 pm at the Diamond Primary School, East Bank Demerara.


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