Exxon says will be ready to bring gas to shore by year end
ExxonMobil says that the pipeline-laying aspect for the gas to energy project is on schedule and that it will be ready to bring gas to shore by the end of this year, after which government has to take over to convert and distribute so as to make the project a reality.
“For the whole pipeline, we are on schedule and will have that completed and ready to introduce gas by the end of this year. Then there will be coordination. We have an ongoing coordination interface activity with the developers for the plant so that we can align the commissioning plans as appropriate,” ExxonMobil Country Manager Alistair Routledge on Tuesday told a press conference.
He made it clear that his company was only responsible for bringing the gas to shore and has made significant progress to date, with nearly half of the laying of pipes both on and offshore completed.
“What we are responsible for is executing the pipeline all the way from the connections we have talked about on the FPSO (Floating Production, Storage and Offloading platform) - the risers, the deep water pipeline all the way up unto the shallow shelf, crossing the seawall and then all the way down to Wales; the onshore pipeline. At that point it passes over to the government which is responsible for the integrated plant for the LNG (Liquid Natural Gas) extraction and the power generation and then the tie into the national grid,” Routledge said.
“All of that has to work for this project to ultimately deliver the low cost, lower emission, electricity everybody is looking for,” he added.
On the aspect that ExxonMobil is responsible for, he updated. “So, that is the laying out of the pipes, we call that stringing; the welding of it, then lifting it into the trenches and burying it underground with all of the safety features that we add to that, we are about 40% complete on the onshore pipeline. The offshore pipeline is about overall 55% complete.
“Last year we had an installation campaign in two parts. We had what we call the ultra-shallow piece that is the very tidal piece - the mud flaps at low tide and quite shallow water at high tide, that’s about 18 kilometers. So, we executed a good portion of that but we knew we would carry some of that into this year. And then we installed in the shallow water, going from that 18-kilometer mark out to where the shelf drops off down into the ultra-deep water. So we are well advanced on both of those.”
As had been explained at a previous engagement, the company had to undertake some technical work in the process and did what is called “horizontal drilling” under the seawall to bring the pipe from sea to land. “That [horizontal drilling] is complete as well,” he said.
For this year, Routledge said that the scope of planned works is to “install the risers on the FPSOs, lay the deep water pipes connect to the shallow water pipe and then complete the onshore,” all of which will be done by December 31.
Work is also ongoing onshore. Even as government awaits funding, works are forging ahead at the West Bank Demerara site with pipe-laying, constructing of internal roads and a materials offloading wharf, pile driving, as well as land preparation and other tasks.
However, it is unclear what percentage of the works that government is responsible for has been completed.
While not giving work completion percentages, GTE project lead, Winston Brassington, had told this newspaper that approximately “443,000 m2 or 44.30 hectares” of land is being cleared onshore. Breaking down the works he said that at the integrated site plant (IPS), 403,930 m2 have been cleared; at the Materials Offloading Facility (MOF), 18,000 m2; at the Lay Down Area, 19,238.25 m2, and the Heavy Haul Road (HHR), 17,900 m2.
Once desolate
This newspaper had last month visited the site which is about five miles from the former Wales sugar estate. The once desolate and bushy backdams have been cleared, with service roads constructed for transporting sand, stone and other materials to the main site. Large buses were parked at the site, and it was explained that they transport workers daily to and from work.
A wharf is being constructed on the bank of the Demerara River and persons are restricted from going to the site of works without clearance. Security guards informed that photos could not be taken nor persons permitted on the property, as per the directions given by the project contractor.
The PPP/C has repeatedly stated that the gas-to-shore project will help to bring down the cost of energy by 50 per cent. “It will help us to ensure we have the right base load for manufacturing and the industrial sector. More jobs, higher income, and greater prosperity for the people,” President Irfaan Ali has said of the project.
When he visited the site in October of last year, the President was told that that the first phase of the project should be completed by mid-2024.
Yesterday, Jagdeo said that he anticipates the loan being approved within the first or second quarter of this year and that the time frame is normal since they go through more rigid due diligence processes. He believes that what has been deemed a stall by many, to him and others in the financial sector with knowledge about the process of multilateral funding, it seems faster.
“We anticipate it will go in the first [to] second quarter of this year,” he said.
He compared the loan process of the US EXIM Bank with that of the Linden-Soesdyke road rehabilitation process, saying that approval with the Islamic Development Bank (IsDB) took two years. “So from the time we made the application to now…they recruited the consultant last year, and it will now move forward. For me I see this as routine. In fact it is moving fast. Sometimes it takes three, four years to secure multilateral funding,” Jagdeo said.
He maintained that the project will go ahead and be completed whether the loan is approved or not, given the alternative arrangements already made.
And with ExxonMobil giving the end of year for the completion of their scope of works, Jagdeo said that government’s phases will also be completed, if not together, very shortly after.
“I think it would be substantially completed. So you won’t have much of a mismatch. And we have and we have a working taskforce that is looking at all of these things together, in which Exxon sits on that taskforce too. Exxon is there, the people who are building the LNG facility and power plant, and the people working on the transmission, so we have a close coordination of these three areas. We may have a small timing difference, but they are all moving ahead; all three components are moving ahead as we speak,” he said.
It is expected that the cost of electricity for consumers will be reduced by some 50 per cent. Currently, the power utility, Guyana Power and Light, provides electricity at a rate of 15 US cents per kilowatt hour.