Guyana cannot develop natural gas without partnering with an outside investor

Dear Editor,

In an article which appeared in the news media on Dec 29, it was reported that the Minister of Public Infra-structure (MPI), David Patterson, told reporters at his end-of-year press conference that a multi-disciplinary team has been meeting with ExxonMobil to review identifiable onshore sites for the storage and distribution of natural gas expected to be produced as a by-product from oil fields being developed off Guyana’s Atlantic Coast.

This action is another example of Minister Patterson putting the cart before the horse, with ill-conceived proposals for projects.

Firstly, the MPI should have analyzed the data collected by ExxonMobil to determine the estimated quantity of natural gas which could be produced from the oil fields over a given time. The stated daily availability of natural gas of between 300 to 500 cubic feet by Minister Patterson is an imaginary quantity and cannot be taken seriously for any meaningful development of the resource.

The natural gas will have to be separated from its impurities before being pumped to onshore facilities for liquefaction and storage in specialized containers for distribution locally and with the excess probably exported after berthing and loading services have been provided for tankers.

This would be a capital intensive and technically challenging project for which Guyana does not have the financial resources nor the technical know-how for its execution. Hence the need for an investment partner for the development of this segment of Guyana’s natural resource.

Japan, a natural gas-hungry country appears to be interested in developing Guyana’s natural gas. If an agreement could be reached, it will be calling the shots as to how its investment should be deployed. Therefore, MPI is jumping the gun, wasting Guyana’s scarce resources as it prematurely seeks and reviews onshore natural gas storage sites forgetting that old adage, he who pays the piper calls the tune. Hence, any onshore site chosen by MPI is unlikely to satisfy the design requirements of any major investor without major modifications.

Minister Patterson should be aware that Guyana cannot develop a natural gas project without a partnership with an outside investor, and therefore he should formulate the country’s development needs in this direction. If a natural gas project does indeed come to fruition which seems unlikely given the short life of the present government, Minister Patterson could nevertheless initiate the next stage of Guyana’s development by using its share of natural gas to power turbines which will generate reliable electricity for Guyana’s entire needs.

Yours faithfully,

Charles Sohan

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