Tue, May 3, 2022,
By Sabrina Valle and Marianna Parraga
HOUSTON, May 3 (Reuters) - Guyana has started talks with U.S. Exxon Mobil Corp to build a more than 120-mile (190-km) natural gas pipeline from the company's offshore projects, Natural Resources Minister Vickram Bharrat said on Tuesday.
The tiny South American nation is trying to build infrastructure as part of an ambitious development plan that has followed over 30 oil and gas findings by an Exxon-led consortium, one of the world's largest reserve discoveries in the last decade with 11 billion barrels of recoverable resources.
Exxon is likely to participate in the project construction, Bharrat told Reuters on the sidelines of the Offshore Technology Conference in Houston. The pipeline would be used to bring to land up to 140 million cubic feet per day of the associated gas from Exxon's oil output in the Stabroek block, mostly for generating up to 300 megawatts of electricity.
Power demand in Guyana is forecast to triple in the next five years along with a fast-growing economy. The gas line is expected to have 120 miles offshore and another 10 to 15 miles onshore. A budget has not been set, but if enough gas is available, the line could also feed fertilizer plants, said Bharrat, who took part in a conference panel with Exxon's top executive in Guyana.
Investment in Guyana is also poised to grow exponentially in the coming years. The construction of the country's second onshore base is planned by 2023, Bharrat said.
The Exxon-led group currently pumps all the South American country's crude output - some 130,000 barrels per day (bpd) - since production started in 2019. Four projects at Stabroek have been sanctioned for a production potential of 1.2 million barrels per day of oil and gas by 2027.
In February, Guyana Vice President Bharrat Jagdeo told Reuters the country was considering creating a national oil company, while also engaged in talks with Middle Eastern firms to explore new offshore fields.
Guyana is leaning towards offering oil exploration areas outside of Exxon's blocks in a competitive bid, a process that could be done in parallel to the creation on a state oil company. If created, that national company would instead look for partners to explore and develop the new areas, Gopnauth Bobby Gossai, Guyana's senior petroleum coordinator, said in the same event.
A decision on how to award the unassigned blocks - one of which, located close to Suriname, has been identified as "Block C" - is still expected by September, Bharrat said.
Amid rising imported fuel prices, the country is also more eager to study over 20 proposals to build a modular refinery that could process some 20,000 bpd of crude in a first phase, the minister said. (Reporting by Sabrina Valle and Marianna Parraga in Houston; Writing by Arathy Somasekhar, Editing by Emelia Sithole-Matarise, Marguerita Choy and Richard Pullin)
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