Guyana exploring potential of second major gas project

President of Guyana Irfaan Ali says his government is evaluating the feasibility of a second major gas initiative to complement the ongoing gas to energy project at Wales, Essequibo Islands-West Demerara.

He said the recent conclusion of expressions of interest for the new project has led to the assembly of a technical team tasked with designing a model and forming an agreement to discuss the project’s viability.

A company has already been identified to collaborate with the government and ExxonMobil to advance the project.

“We have identified a technical team to work with the stakeholders in coming up with the model and to negotiate a heads-up agreement and look at the viability, technically and financially, of the project,” the president said.

The government foresees a wave of new economic opportunities stemming from this new project, and outlined several possibilities, which include the development of an energy corridor to Northern Brazil and Suriname.

This new project is expected to be aligned with the regional energy security agenda.

“We have 1.5 billion tonnes of bauxite preserved between Guyana and Suriname. So, depending on the cost structure, this might be an opportunity which makes the aluminium plant … viable. All of these options are being examined. We also have the marketing of the by-products and the use of natural gas in other jurisdictions,” President Ali explained.

Meanwhile, speaking on the Wales gas to shore project on the West Bank Demerara, the president said that the government is hopeful that they will be able to secure funding from the United States EXIM Bank.

“The government of Guyana expects the EXIM Bank to submit the loan to the EXIM Board on or before the third quarter of 2024,” he said.

The government is seeking a US$660 million loan from the US EXIM Bank but has assured that any delays in securing the loan will not derail the project.

Providing an update on the project, President Ali said, “Exxon expects completion of the pipeline by the end of the year … The government of Guyana is also working in a parallel way to have an NGL [Natural Gas Liquids] storage facility and market for the NGL to be advertised shortly.”

The Indian company contracted to establish transmission lines and substations for the project, Kalpataru Projects International Limited, anticipates that these elements will also be completed this year.

Ali explained that to accommodate the ongoing development of the gas to energy project, particularly the pipeline installation and the operationalisation of a materials offloading facility, dredging of the country’s main channel is necessary.

As a result, the government is exploring a viable, long-term plan to dredge the country’s main channel.

In the 2024 budget, some $80 billion was allocated to advance the gas to shore project and its associated infrastructure, including transmission and distribution upgrades to off-take the power.

With the potential to cut electricity costs in Guyana by 50 per cent, the highly anticipated gas to energy project will see a 200-kilometre pipeline bringing gas from the Liza Destiny and Liza Unity Floating Production fields onshore.

Upon arrival at this West Coast Demerara facility, the pipeline will continue for approximately 25 kilometres to the NGL plant to be constructed in Wales.

The project will bring a plethora of benefits to Guyanese, including job creation, improved electricity access, foreign investment, and energy security.

CMC