‘One do not make changes to a winning team’ says the old adage. But something is wrong with Guyana in terms of development. The Gas to Shore project comprises some of the same players who were involved in a string of questionable projects. We can identify the Marriot Hotel, a venture where expenditures are yet to be made public or accounted for. Then the white elephant Skeleton Sugar Factory, the botched Amalia Falls Hydro project, the secrecy surrounding Surendra Specialty Hospital (800 million) swindle, the Berbice Bridge fiasco and other failed projects that have cost the Guyanese taxpayers astronomical sums. It is inconceivable that the Irfaan Ali government has persisted with these players. It must be remembered that several members of the present government were investigated for financial crimes by the previous administration and some including President Ali, Brassington and Ashni Singh, among others were charged and placed before the courts. However, the charges were dropped in 2020 when this government took office.
What is evident is that this Gas-to-Shore project is between the Government and Exxon with little transparency on feasibility studies, site selection, the costs, the selection process, the amount of gas, etc. all remain shrouded in secrecy. Today, more questions are emerging and less answers are being provided. It stands to reason that this project is set to parallel the litany of technological white elephants Guyana has to contend with. The David Granger government had engaged consultancy group, Energy Narrative, in 2017, to undertake a study on the options, cost, economics, impacts, and key considerations of transporting and utilizing natural gas from offshore Guyana for electricity generation. Three sites had been evaluated for the landing site of the proposed pipeline — none of them included the Wales Estate which experts claimed is not economical feasible.
Although the government has great plans to vitalize the energy sector but according to experts, they are not sound policies. In February, the government had proclaimed that four studies would be conducted on the geotechnical and geophysical aspects of the project and its impact on the environment. Yet, the study most advocated for in the press was not mentioned – one to ensure that the project would be financially viable. Exxon and other producers currently reinject, flare (about 15 million cubic feet daily) and consume some 90 per cent of the gas produced. If the operator chooses instead to flare that gas or to pipe it to a processing plant, then it becomes uneconomic to extract the remaining oil. The Government seems to lack the capability to differentiate recoverable from non-recoverable costs, so ExxonMobil can choose the option of greatest profit by not reinjecting the gas thus saddling Guyana with more operating costs.
Experts have contended that the government has to consider the following conditions in pumping gas to shore:
Scrubbing: The removing of impurities like Sulphur Dioxide, Hydrogen Chloride and lighter (more flammable) fractions.
Booster pumps, much like water pumps, to continuously keep the gas pressurized so it can travel to shore.
Off-shore liquefaction instead of costly pipelines. Without re-injection of gas to maintain reservoir pressure which in turn allows the operator to extract more petroleum from a specific wellhead in order for oil to be forced to the surface. Without pressure the oil will simply, and more costly, have to be pumped up.
Neighbouring Brazil, Suriname and Venezuela have their own gas therefore we are looking at a far-away market, as there does not exist a full consumption avenue.
But what is bizarre about this project is that directives emanating from those who have experience and qualifications in oil and gas are not considered.
Sincerely,
Leyland Chitlall Roopnaraine