Exxon resumes pumping oil from Liza 1 and 2

Aug 28, 2024 News

Guyana’s second FPSO, the Liza Unity

…as works completed to tie-in natural gas pipeline

(Reuters) – An ExxonMobil consortium’s crude output in Guyana has been fully restored at two floating production facilities after workers completed a natural gas pipeline tie-in, a company spokesperson said on Monday.

Output had fallen to between 400,000 and 500,000 barrels per day from July 2 through the end of the month, government data showed, a sign that planned work on the floating production storage and offloading (FPSO) facilities had begun. Oil production was at 669,000 barrels per day as of June 30, the official data showed.

“We safely executed shutdowns of the Liza Unity and Destiny FPSOs to facilitate pipeline tie-ins for the gas-to-energy project,” the spokesperson said by email. “Both FPSOs are back online at full production levels.”

Exxon said earlier this year it would shut two offshore oil production vessels in Guyana for two weeks each between July and August to connect a natural gas pipeline that would feed planned onshore power plant and gas-processing facilities.

Oil output at one of Exxon’s FPSOs was halted from July 2-15, while the second FPSO suspended operations on July 19-31. The consortium’s third facility was unaffected, the data showed. The associated production volumes were deferred, not lost, Exxon said. The Exxon-led consortium, which includes Hess (HES.N), and CNOOC Ltd (0883.HK), is responsible for all production in the South American nation.

The Government of Guyana (GoG) plans to utilise about 50 million standard cubic feet (MSCFD) of gas per day to generate 300 megawatts of electricity to power the national grid. Gas will be piped to shore from two projects, the Liza One and Liza Two.  ExxonMobil is constructing the 12-inch pipeline that will run approximately 220 kilometers from the FPSOs offshore to the Wales Development Site, West Bank Demerara.

While Exxon progresses with the construction of the pipeline, the Government of Guyana is yet to make key documents public, relative to the massive gas project being developed. Notably, the GTE project is Guyana’s single largest financial project ever pursued in the country’s history. Despite this however, the project does not have a feasibility study which demonstrates how viable the initiative is. The pipeline is expected to cost the country some US$1B but to date, there is no Final Investment Decision in that regard. Additionally, the Natural Gas Liquid (NGL) facility and power plant are expected to cost another US$759M.

Government is upgrading the transmission and distribution network to support the project and has been tasked with compensating citizens along the pipeline route for their lands. A new control center to manage the power project is also to be constructed, increasing the cost of the gas project. Despite efforts by the Opposition and media for agreements relative to the GTE project to be laid in the National Assembly, government continues to delay the release of the documents sparking further concerns about the project.

• Exxon, Liza 1 and 2, oil, pumping, resumes