Guyana waiting for Exxon's gas development plans until end of March, VP says
"They said: 'by end March, we will tell you what we will do.' And that's what we're waiting (for)," Vice President Bharrat Jagdeo said in an interview on the sidelines of Guyana's Energy Conference in Georgetown.
Guyana is the fastest-growing economy in the world thanks to rapid expansion of output from offshore oilfields controlled by the Exxon-led consortium, in which Hess (HES.N), opens new tab and CNOOC (600938.SS), opens new tab also participate.
"Clearly for us, there shall be a project. We have to monetize the gas, and if Exxon doesn't want to do it, we already said to them... we have a lot of people who are interested in doing this on their own," Jagdeo added.
The government, which wants to use natural gas to drive growth in the domestic economy, has progressed to award contracts for power and petrochemical projects that will receive gas supplies. It is also exploring options to develop liquefied natural gas facilities to export the fuel.
The government says there is enough gas at Exxon's massive Stabroek block for commercial development, while Exxon says it has yet to complete its assessment of the gas resources in the area.
Exxon last week announced the " Wales Gas Vision", which outlined what could be done with the offshore gas the consortium is planning to produce, if its assessment shows commercial development is viable.
Exxon did not immediately reply to a request for comment.
One of the possibilities could be to jointly develop some gas fields with neighbor Suriname, where offshore reserves have also been discovered, Jagdeo said.
Guyana, which will be entitled to about 50% of gas produced at Stabroek after the Exxon group takes some of the output to recover expenses, last year chose little-known U.S. company Fulcrum LNG as its preferred partner for a project to process and export the gas.
The startup, which the government expects to partner with the Exxon consortium for that development, has since faced questions over its capacity to execute a project that could need as much as $30 billion.
Jagdeo acknowledged external concerns about Fulcrum LNG's capacity, but said the government believes the company's team has the potential.
"They (Fulcrum LNG) demonstrated to our team that they had substantive backing, both to take the gas... and also for equity investment and raising the capital. So we are hoping that we could continue the tripartite discussion to make this work, Exxon, Fulcrum and the government of Guyana," he said.
GAS TO SHORE
The Exxon group reinjects the gas it produces into the oilfields already in operation to maintain pressure at the reservoir. The consortium expects to send a small volume of gas back to shore for power generation as soon as this year, depending on when the power plant is ready.
Last year, it completed a $1 billion pipeline from the fields.
The bulk of future gas supply is expected to come from the Pluma and Haimara projects, rich in gas resources and seen starting output after 2030.
The power project, to be built by a consortium between Texas-based Lindsayca and Puerto Rico-based CH4 Systems, faces problems after a three-month delay to hand over the site. The parties could go to arbitration over the delay, but the project will be completed, Jagdeo said.
A separate plan to build a fertilizer plant also connected to Exxon's pipeline could be offered this year through a tender for companies interested, Jagdeo said.
Guyana is also trying to clear a standoff with Canada-based firms Frontera Energy (FEC.TO), opens new tab and CGX Energy (OYL.V), opens new tab over the expiration of an exploration license for a key offshore block where oil reserves were found. The dispute could also end up in arbitration after the government notified Frontera and CGX that it had canceled the license.
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