ExxonMobil has assured that the flaring exercise it will begin from this Thursday at its Liza-5 well site offshore is only temporary and is being undertaken for data analysis and testing.
“The flaring is part of a well test that will help us gather data. It is not continuous flaring. It is very temporary flaring for a very specific purpose. It is for about a week and it is not continual,” the company’s Public and Government Affairs Advisor, Kimberly Brasington, told Stabroek News yesterday.
The company last week announced that it will be conducting a flaring exercise during the period May 3-15 at the well site of the Liza-5 well, within the Stabroek Block. It said that the operation will entail a temporary burst of flames being emitted from the Stena Carron Drill Ship offshore. An advertisement in yesterday’s Sunday Stabroek said that the exercise site is 108.2 nautical miles from the coast and covers an area of one square kilometre.
“We announced that there is going to be operational flaring. what that means is that we are going to bring up some hydrocarbon to surface to test it and so once we bring that hydrocarbon to surface we have to burn it off or flare it because we have no way to contain hydrocarbon as yet. This is a drill ship so there is no way to contain the oil. We are going to flow out to the surface and then burn it. But it is very small quantities it’s called a test but there is flaring associated with that,” Brasington explained.
“What the test does is puts together a lot of information. We get to learn how fast the oil flows, what is the pressure, we get to take a sample of the oil so that we can further test it. So all of this data is going into the Liza Phase 1 and Liza Phase 2 development project. Currently, you remember, we are behind the scenes building Liza Phase 1 development project which will be producing the oil from the Liza field,” she added.
Government has said that except for necessary testing, there will be no flaring of natural gas found offshore, in keeping with its commitment to developing a “green state”.
“We also determined that under no circumstances… there will be flaring of the gas,” Minister of Natural Resources, Raphael Trotman, had said when the contract with ExxonMobil’s subsidiary, EEPGL and its partners was announced last year.
“It is common industry practice that there is flaring and we determined that given the green commitment and approach made by His Excellency (President David Granger), that Exxon will not flare the natural gas that would accompany the find,” he added.
Trotman had singled out Commissioner of the Guyana Geology and Mines Commission Newell Dennison for taking the lead in ensuring that the environment is protected from the greenhouse gases emitted through flaring and thanked him publicly.
Trotman noted that when flaring was used to test the flow and composition of the oil from the Liza-1 well, it caused quite a commotion with the coast guard and maritime authority because Caribbean Airlines had mistakenly thought that a ship was on fire. “Most people might not know this but we have to test the pressure flow and quantum…,” he explained before adding that “We determined that we would flare to test only and we will not flare for continuous daily 24-hour work.”
The extraction of crude oil also results in natural gas associated with the oil being brought to the surface and flaring of the associated gas is commonly used to dispose of it in the absence of infrastructure to make use of it.
Testing was carried out on Exxon’s Liza well in the Stabroek Block offshore Guyana, where production is expected to begin in 2020, and it was determined that it is an associated gas well that comprises both crude oil and natural gas.
The Petroleum Contract Agreement with ExxonMobil’s subsidiary at Article 12 also speaks to associated and non-associated gas and flaring. “If Contractor’s Notice includes a proposal to flare the excess Associated Gas in the Development Plan, then the Minister shall have the option to propose an extension of the response period provided in Article 6.6 for the offtake election to Contractor, until such time as the Minister can provide Contractor with a binding alternative proposal for development and use of the excess Associated Gas,” it states.
“If the Parties agree that the excess Associated Gas of an Oil Field has no commercial value, then such Gas shall be disposed of by the Contractor in the most economic manner consistent with good international petroleum industry practice, provided that there is no impediment to normal production of Crude Oil. All costs and expenses incurred by the Contractor in the production, use and/or disposal of the Associated Gas of an Oil Field as stipulated in Article 12.1 and those incurred in carrying out any feasibility study on the utilization of the excess Associated Gas shall be charged to the Development Cost of the Oil Field and shall be Recoverable Contract Costs. All costs incurred by the Government for the infrastructure and handling of excess Associated Gas which are not included in an approved Development Plan shall be at the sole risk and expense of the Government and will not affect the amount of Cost Oil and Profit Oil due to Contractor. The construction of facilities for the utilization and production of excess Associated Gas, if any, shall be carried out while a Petroleum Production License continues in force,” it added.
ExxonMobil has repeatedly said that it is not commercially feasible for it to bring the natural gas from the well onshore and it will use the gas for reinjection during production.
However, the APNU+AFC government is forging ahead with plans to pipe the excess natural gas onshore to cater for this country’s energy needs since given the size and demand this country has, it would be feasible.
Minister of Public Infrastructure David Patterson last month announced that plans continue in this regard and that a test was done and the country determined that it was feasible to bring the gas onshore. “It has been confirmed that it is feasible. It has been confirmed that it will be an absolute benefit to the country, has been confirmed, and I can say this and I will go out on a limb and say- the numbers are all sub US 10 cents per megawatt hour,” Patterson replied when asked by this newspaper if a feasibility study was already undertaken.
While he did not make clear where the gas pipes would land onshore, Patterson said that government was set to soon begin talks on what model would be used here. “The main off-take of that natural gas in the initial stage will be for power generation,” he said.
“The question of the natural gas site, Cabinet has pronounced on a site and which obviously triggers further technical studies which have commenced and are ongoing,” he added.