In response to a letter I wrote on natural gas development in Guyana (SN, Jan 3), Minister of Public Infrastructure (MPI), David Patterson claimed in a letter to Stabroek News on Jan 4, that I had presented a distorted perspective on the vision and use of natural gas for Guyana (‘Government engaged in studies for a gas pipeline as a means to complement use of renewable energy’).
Unfortunately, he responded with no clear MPI policy as to how the resource will be developed.
The natural gas under consideration is held in rock formations with crude oil and impurities off Guyana’s Atlantic Coast. The stated proposal is to pump the mixture (oil, gas, impurities) from its underground location to the surface and separate its components after processing, with the crude oil temporarily stored in tankers while some of the gas produced is pumped back under pressure into the oil-bearing rocks to force trapped oil to the surface with the remainder flared. No statement has been made as to how ExxonMobil intends to dispose of the impurities and wastes.
There is no clause in the Agreement ExxonMobil has made with the Government of Guyana (GoG) which states that the natural gas produced from the oil fields it is exploiting, cannot be flared. However, Minister Patterson has stated that Guyana will not allow gas flaring and there is no indication that ExxonMobil intends to get rid of the gas generated, otherwise.
The alternative to flaring the gas is liquefying it after processing for storage and distribution which will be capital intensive and technically challenging and may not be a viable proposition as in 2008 gas was being sold on world markets at US$13/million BTU while at the end of 2017 the price was US$3.00/million BTU and this price is expected to drop further. Minister Patterson should note that ExxonMobil has no plan to get into the gas business. Therefore he should be wary of getting Guyana involved in another Amalia Falls Hydro-Electric Project before the many uncertainties are considered and a feasibility study prepared by reputable consultants as to whether a natural gas project is indeed viable for Guyana to pursue.