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Monday, April 12, 2021

Talks underway on harnessing Guyana-Suriname energy potential for Arco Norte energy corridor

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The establishment of an electricity grid to connect the Arco Norte region of South America has been long in the making, with studies already conducted, but now the conversation has commenced on utilising the energy potential of Guyana and Suriname to power this corridor.

This was recently disclosed by Guyana’s President, Dr. Irfaan Ali.

The Arco Norte region of South America consists of Guyana, Suriname, Brazil, and French Guiana, which are known as the Arco Norte countries. During a discussion on February 2, President Ali revealed, “A month ago, we started a discussion between Guyana, Suriname, Brazil and French Guiana to some extent at looking at an energy corridor, because these two countries combined with the potential that exists and the opportunities that will be created as a result of oil and gas has enormous possibility for the region.”

Oil and gas discoveries in Guyana and Suriname continue to increase, with ExxonMobil already making 18 finds in the Stabroek Block offshore Guyana which has been estimated to be about nine billion barrels of recoverable oil equivalent resources. Production has already begun. Suriname’s Block 58, meanwhile, is estimated to have a resource potential of 6.5 billion barrels of recoverable oil equivalent resources. Production is expected to commence in about five years.

Around 9 trillion cubic feet of gas has been discovered with Guyana’s oil discoveries while UK-based global energy consultancy group Wood Mackenzie has said over a trillion cubic feet of gas was found along with the oil at the Maka Central-1 discovery offshore Suriname earlier this year.

Managing Director of Suriname’s state oil company, Staatsolie Maatschappij Suriname NV, Rudolf Elias, had previously expressed interest in Guyana and Suriname cooperating to utilise the gas to generate electricity. He is on record as saying, “I think it is extremely important that Suriname and Guyana are looking for the strengths and weaknesses that we have in all the sectors…one of the things for sure that we have to work together on is to bring all of the associated gases…to bring that onshore somehow in order for us to prosper and to bring some cheap energy into our countries.” Guyana is already cooperating with Suriname and Brazil on developing energy and transportation infrastructure.

However, this energy corridor is not a new concept. In fact, the Inter-American Development Bank (IDB) conducted baseline and pre-feasibility studies in 2016 and 2017 respectively, on an ‘Arco Norte Interconnection.’

Those studies assessed the potential for electrical interconnection of power systems in the Arco Norte region and showed that an electrical interconnection of the region would improve the regional electricity system. This would allow electricity trading among these countries and allow for an optimal power generation expansion plan, under which the region could use the most efficient sources of electricity, minimizing costs and environmental and social impacts. “Regional electricity trading would also help guarantee security of supply. Another advantage of regional interconnection is that it would allow for trade among French Guiana, Guyana, Suriname and the national Brazilian grid, the Baseline report stated.

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