With contract negotiations for the planned gas-to-energy project set to begin during the early part of October, the government is looking to hire a consultant firm to provide legal and commercial advisory services as well as negotiation support for the project.
The firm is expected to provide its services for some 45 days.
Both the government and ExxonMobil seem to be moving ahead with their plans for the gas-to-energy project despite the absence of an environmental permit from the EPA.
The project is part of a bigger plan by the government for the Wales area and will be executed in two segments. ExxonMobil will be responsible for the construction of the pipeline to transport natural gas from offshore Guyana while the government is responsible for the construction of the Natural Gas Liquids (NGL) plant and other supporting facilities.
Contract negotiation for the project should begin by October 7th, 2022, according to the Ministry of Natural Resources (MNR). Consultants will be required to begin providing the mentioned services seven days after being selected.
According to a notice on the MNR website, consultants or firm interested in the contract must submit technical and financial proposals for those services by September 13th, 2022 to the National Procurement and Tender Administration Board (NPTAB).
The company or person hired will be required to review the existing legal and regulatory framework for the petroleum sector and integrated policy directives. This includes but is not limited to the petroleum legislation, Petroleum Licence, Liza production licence and heads of agreement between the government and Exxon.
In addition, the consultant will have to review the Draft Gas Supply Agreement and provide detailed legal opinion, comments and advice to the government through the MNR and the Gas to Energy Task Force on the best project outcome for Guyana and its partners. The consultant will also be required to support MNR’s engagement and information exchanges with Exxon during the review and subsequent negotiation stage among others. Exxon, through its consultant Environmental Management Resources (ERM), submitted an Environmental Impact Assessment (EIA) on April 13, 2022, for their part of the project. The impact of the project is rated as minor to the environment.
The pipeline is expected to land at Crane/Nouvelle Flanders, West Coast Demerara and make its way to Wales on the West Bank of the Demerara. The project will involve capturing associated gas produced from crude oil production operations on the Liza Phase 1 (Destiny) and Liza Phase 2 (Unity) Floating, Production, Storage, and Offloading (FPSO) vessels.
The project is pegged at US$1.3 billion and the government hopes it will lead to vastly lower energy costs that would enable a spurt in manufacturing. However, there have been doubts over the country’s execution capacity and whether a feasibility study has been done for this massive project which would be the biggest in the country’s history.
The project will be executed in three phases – construction, operation and decommissioning. It entails three aspects as well – an offshore pipeline which is approximately 220 kilometres of a subsea pipeline extending from new subsea tie-ins at the Destiny and Unity FPSOs in the Stabroek Block to the proposed shore landing, located approximately 3.5 kilometres west of the mouth of the Demerara River; onshore pipeline that is a continuation of the offshore line and extends about 25 kilometres from the landing site to the NGL plant; and the NGL plant and associated infrastructure that will be located about 23 kilometres upstream from the mouth of the Demerara River on the west bank.
