Latest update April 25th, 2024 12:59 AM
Oct 25, 2021 News
FPSO being designed to support future export options – Report
Kaieteur News – If it receives the blessings of the PPP/C Government, ExxonMobil’s fourth oil project in the Stabroek Block is poised to generate 450 million standard cubic feet of gas per day by 2025-2026. This is nine times the volume of gas that would be brought onshore via the imminent US$900M gas-to-shore project which will feed off the combined resources of the ExxonMobil-led Liza Phase One and Two projects.
The foregoing was outlined in ExxonMobil’s Environmental Impact Assessment (EIA) on Yellowtail. That document is being reviewed by the Environmental Protection Agency (EPA).
In that report, ExxonMobil explained that the project which would be supported by resources from the Yellowtail and Redtail fields in the Stabroek Block will produce material quantities of associated gas. It said a key use for this associated gas is for fuel in gas turbines for power generation on the Floating Production Storage and Offloading (FPSO) vessel.
It noted that gas not used as fuel would then be available for alternative uses. ExxonMobil went on to explain that the three primary alternatives considered for use of associated gas include: flaring, re-injection, and export.
Expounding further, Exxon said routine flaring of associated gas is a method to deal with natural gas production in oil developments, but introduces significant environmental considerations and would not meet regulatory expectations in Guyana nor be consistent with good international oilfield practice.
As for re-injection, it was noted that this will occur throughout the 20 year life cycle of the project but since all of the gas cannot be re-injected, the next suitable option for consideration is exportation.
With this in mind, Exxon said, “There is currently a separate project being proposed to transport a portion of the gas (on the order of 50 million standard cubic feet of gas per day) from the Liza Phase 1 and Liza Phase 2 FPSOs to shore, where it would be used to generate power in a gas-fired power plant.”
The company added, “As this project would satisfy the currently identified gas demand in Guyana, there would not be enough additional demand in Guyana to consume the quantities of associated gas that will be produced from the (Yellowtail) Project (expected to peak at around 450 million standard cubic feet of gas per day).”
ExxonMobil was keen to note that a decision with respect to the export of gas from the Yellowtail Project will be made in the future, while adding that gas export to shore or another phase of field development may be considered. It further noted that space reservation and basic design connections to allow for this are included in the Project scope.
TRILLION DOLLAR PROJECT
It was on Sunday, Kaieteur News reported that development costs for the Yellowtail project are poised to exceed US$9B or GY$1.8 trillion.
Exxon said the costs are expected to be higher since there would be a greater number of development wells and associated drilling costs when compared to its Payara project which will also cost Guyana $1.8 trillion.
Despite the astronomical costs, Exxon believes that the project should be supported as it would generate benefits for the citizens of Guyana in several ways, which would otherwise not be there in the absence of the project. It said these benefits include revenue sharing with the Government of Guyana. The oil giant stressed however, that the type and extent of the benefits associated with revenue sharing will depend on how decision-makers in government decide to prioritise and allocate funding for future programmes, which is unknown to the company and outside the scope of the EIA.
Apart from the revenue sharing, Exxon said Guyanese stand to benefit from the procurement process that will follow for goods and services from local businesses in alignment with the Petroleum Agreement and the EEPGL Local Content Plan approved by the Ministry of Natural Resources in June 2021.
According to project documents, Yellowtail will consist of drilling approximately 41 to 67 development wells (including production, water injection, and gas re-injection wells); installation and operation of Subsea, Umbilicals, Risers, and Flowlines equipment; installation and the operation of a Floating Production Storage and Offloading (FPSO) vessel in the eastern half of the Stabroek Block; and— ultimately—project decommissioning.
The FPSO will be designed to produce up to 250,000 barrels of oil per day. The initial production is expected to begin by the end of 2025–early 2026, with operations continuing for at least 20 years.
The project is expected to employ up to 540 persons during development well drilling, approximately 600 persons at the peak of the installation stage, and 100 to 140 persons during production operations.
Jagdeo giving Exxon 102 cent to collect 2 cent.
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