Demerara Distillers Ltd (DDL) and newly-founded Natural Gas Company, Icon, have completed two months of a small pilot venture using natural gas to provide energy and Chairman of DDL, Komal Samaroo says that the progress so far shows the project’s technical feasibility.
The Trinidadian company held its official media launch yesterday morning at Cara Lodge, where it was announced that for the past two months they have been conducting a pilot project with DDL of running an engine with natural gas in its liquefied form (LNG). The project was conceptualized to run for a period of six months, with the aim of showing that the technology, economics and logistics in obtaining and running LNG engines can work, and also, to educate and help people understand the benefits and ease of operations of using natural gas, as opposed to conventional gases such as diesel.
Speaking at the event, Samaroo explained that one of DDL’s goals through the years, from its inception, has always been to ensure that they remain competitive in a changing world. He said that considering the fact that trading arrangements in the past only allowed for certain preferences, which often came to an end, there was a need to develop a plan to transition into being a globally competitive company which can compete with the “giants of the world.”
“We have spent a lot of time thinking and strategizing on how we will continue business, how do we find the competitive advantages that allow us, a small company operating in a third world environment, to stand up against the giants of the world, many of who benefit from very significant fiscal and other advantages,” Samaroo said.
As a result, when the company was approached by Icon, the project resonated with the goals and aspirations of DDL. “We have been forced to be on a continuous search for improvement and innovation in everything we do. And so when the Icon Group approached us their project resonated with us because in our industry power is the second highest cost and we are constantly looking to see how we can find competitive advantages in these major cost elements,” Samaroo explained.
He added that “like the road that has not been traversed on” the project saw some hiccups and challenges but they were able to achieve their overarching goal to determine whether using natural gas for energy is a viable option.
“I think that at this point in time, we can say that the technical feasibility has been proven. The operation has been going very well after the initial hurdles have been overcome and we believe that as we go forward in the next few months, we will be in a position to sit down and do the economic and financial evaluation,” he said, while emphasizing that the project resonates “very, very neatly” with the country’s quest for the usage of clean energy.
Samaroo also stated that DDL believes in the future of natural gas usage, which is an affordable and reliable source of energy, to assist in piloting Guyana’s economic prosperity in the future, while maintaining environmental benefits.
President and Chief Financial Officer of Icon, John Thompson also made brief remarks about the company’s first venture and pilot project in Guyana which they have dubbed as successful. He explained that one of the company’s major challenges was using existing infrastructure to power the project. However, they were able to outfit a diesel engine to use both LNG and diesel. As such, they were able to cut off some 60 percent of diesel usage and substitute it with natural gas. So far, the results are “promising” and the company has been able to record reductions of 10.9 tonnes of carbon dioxide and 9.8 kilograms of particulate matter. It was also noted that when the unit’s oil was changed, it showed cleaner results after the use of natural gas, as compared to when only diesel was being utilized.
“The results are promising and we expect it can be even better overtime. We are doing it with one unit [generator] and we do not expect it to be representative of anything. When all the engines are running we will be able to better show the numbers,” Vice President Nelson Garcez explained.
He also stressed that the use of natural gas to produce energy is an easier hazard to address, in the case of any incident, because of its less dangerous properties.
“This type of technology is applicable up to 50 megawatt [MW] capacity, which can serve any solution in Guyana. When you go beyond 50 megawatt, then the facility, in a humid climate like Guyana, will have a huge cloud of condensed vapour, around which could create a problem like visibility and other related issues,” Garcez explained.
While the state power company, GPL has sought expressions of interest for the operation of a 50MW Natural Gas plant, Thompson explained that they are not plant operators but they are willing to work with persons who are interested in exploring the idea.
“DDL were very excited by the idea. It is new and has been a challenge, and, we and they are incurring a cost on it due to the nature of the short duration and small quantity, but they can take this and adapt it and scale it up and that is where the cost comes down,” Thompson said, while explaining that on a small scale the project is not viable, but when it is scaled up, it can create massive savings.
Head of the Guyana Energy Agency (GEA) Mahender Sharma, along with the CEO of Go-Invest, Owen Verwey also made brief remarks.
The pilot project is expected to conclude by May, where the data collected will be compiled and DDL will make a decision on how they will proceed with the use of natural gas.
Large quantities of natural gas are expected to become available in 2020 when ExxonMobil begins extracting oil from its Liza 1 well. The state intends to channel this as LNG to GPL.
