ExxonMobil has few options for Liza One natural gas

Apr 05, 2021 News

…only so much can be re-injected, power FPSO — T&T Expert

Kaieteur News – Former Minister of Energy in neighbouring Trinidad and Tobago (T&T), Kevin Ramnarine, believes that US oil Major ExxonMobil, has very little options with what to do with the associated natural gases emanating from the Liza Phase One oil field in the Stabroek Block, offshore Guyana.
These, he said, include re-injection of the gases back into the reservoir, flaring it, or commercializing it.
Ramnarine was at the time discussing Guyana’s proposed landing of a gas pipeline from the Liza Field some 126 miles offshore Guyana from a depth of some 1,600 metres, to the former Wales Estate on the West Bank of Demerara.

Former T&T Energy Minister, Kevin Ramnarine

The former T&T Minister with some 25 years experience in the natural gas business told participants of a webinar held by Oil Now TV on the topic this past Monday that “Exxon has very few options for natural gas offshore.”
He elucidated saying “option one is to re-inject but there is only so much you can re-inject, as we have discovered.”
According to Ramnarine, a second option would be to use for power generation—as is currently the case—on the Liza Destiny Floating Production, Storage and Offloading (FPSO) Vessel, “but there is only so much we could use for that.”
He speculated that the third option “is to commercialize and somewhere in between if things go wrong, as they recently went wrong, with the compressor on the Liza Destiny, the only option is to either shut in oil production or to flare right.”
Ramnarine posits, “nobody wants to shut in oil production and nobody wants to flare.”
He noted that it is in this context that “as the decade progresses, I think more gas will be making its ways to the coastline.”
As such, Ramnarine said, “the question arises; what is the best way to develop industries that are sustainable and that could create jobs and so on.”
On the matter of Guyana taking the gas from the Stabroek Block, Ramnarine posited that there is room for commercialisation of liquefied natural gas (LNG) in Guyana on a small scale but to undertake similar sized trade in Guyana, “you would have to have reserves of the magnitude of let’s say four to five trillion cubic feet of gas…You’d need to cobble together a significant amount of gas and you would have to make sure that the supply is there for 20 years to justify the LNG train,” he said.
He was adamant however that there is room for growth using LNG since gas as a source of energy will be “a growth industry for a long while.”
As such, he suggested that when it comes to the natural gas, “one of the things that the Guyanese government may wish to do, is to have an independent third party assessment of the reserves that have been discovered thus far.”
He indicated that, “right now, we have some figures, and those figures have been given to us by Exxon, out of their reporting. We have the Exxon Securities and Exchange reports which are publicly available, but it would be useful for the Guyanese government to have an independent third-party assessment.”
Drawing reference to natural gas and its use in neighbouring T&T, the former Energy Minister pointed to the fact that “our annual natural gas audits are keenly followed by the public in Trinidad and people in Trinidad always worry about gas running out and so on…So I think that an audit like that will give the Guyanese government a good idea of what sort of resource base you’re playing with and then that will inform industrial strategy, and industrial planning going forward.”
Ramnarine, in a recent discussion on the project disclosed that the pipeline alone will cost the country some US$800M but “the more important facility would be the facility which is to condition the gas or to fractionate the gas.”
This in essence refers to a refinery type facility to separate the associated gases which would land onshore—a fraction of which would be used to supply Guyana with an oversupply of electricity.
Ramnarine, during the gas to shore discussion hosted by OilNOW’s Chris Chapwanya said that the Guyana government, before forging ahead with the project, needs to determine, “what is the best way to develop industries that are sustainable and that could create jobs and so on.”
The associated gas to be landed onshore Guyana by 2024 would initially be at some 15 million cubic feet of gas daily.
According to Ramnarine, it must be realised that a facility will have to be set up to separate the methane, “and ethane and propane and so on; more than likely, a power plant would need methane which is the simplest of the hydrocarbons. So the power plant gets what they call C1 and C2, which is methane and ethane.”
He explained that “everything else, which is C3+” which is essentially butane is also used as a propellant.
He spoke too about the need to consider propane commonly referred to as Liquefied Petroleum Gas.
Other gases that would be obtained and separated—at a conditioning facility that will have to be built before anything can be done with any of the gases—includes “pentane and hexane and so on.”
He posited that these too are valuable liquids. “That has value from the point of view of supplying Guyana with cooking gas (one) and supplying Guyana with cooking gas at a lower cost than it is currently being supplied because you would be importing your cooking gas right now from somewhere.”
Ramnarine pointed to liquefied gas for mining and companies such as Demerara Distillers Limited, which already imports small amounts of LNG.