With the repaired flash gas compressor system re-installed on the Liza Destiny Floating, Production, Storage and Offloading (FPSO) platform, oil production has returned to normal, Chief Operating Officer of Hess Corporation, Greg Hill has said.
Providing an update on its operations offshore Guyana during an earnings conference call yesterday, Hill said that the repaired flash gas compressor system has been installed on the Liza Destiny FPSO and is under testing. He said that its operator, ExxonMobil, is evaluating test data to optimize performance and is safely managing production in the range of 120,000 barrels of oil per day (bopd) to 125,000 bopd.
Hess has a 30% interest in the Stabroek Block. ExxonMobil holds 45% and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds 25 percent interest.
Hill noted that the replacement for the flash gas compressor system with a modified design and production optimization work are planned for the fourth quarter of this year. This, he says, will result in higher production capacity and reliability.
According to Hill, gross production from Liza Phase 1 averaged 101,000 bopd/or 26, 000 bopd, net to Hess. He added that net production from Liza Phase 1 is forecast to average approximately 30,000 bopd in the third quarter and for the full year 2021. In addition, it was disclosed that during the third quarter, Hess expects to sell three one-million barrel cargos of oil from Liza Phase 1.
Earlier this month, the operator of the Stabroek Block, ExxonMobil had said that the flash gas compression system was started up on June 19th for the first testing phase and was shut down on June 28th in order to remove temporary probes and instrumentation. Exxon had said that during the first testing phase the team was able to reduce flaring to pilot levels.
The second phase of testing was set to begin on July 4th, Exxon had said adding that upon successful completion, they expect the system to continue into normal operation. No further update has been provided since but the Company had also indicated that they applied to the Environmental Protection Agency (EPA) for approval to flare above pilot level for this extended period of equipment testing to ensure that they remain in compliance with their environmental permit.
Since January this year, ExxonMobil has experienced major problems with the gas compression equipment on Liza Destiny and this has led to environmentally-damaging gas flaring.
President of ExxonMobil Guyana Alistair Routledge had said that the gas compressor failed in the middle of the night on January 27 this year, when optimisation testing was ongoing and the production level was around 130,000 bpd. However, he maintained that this was not in any way linked to the malfunction.
Following the malfunction, the gas compressor and other key parts from the FPSO were sent to Germany for repairs. A few weeks later, it was announced that logistics for its departure from Germany were being finalised following the successful completion of repairs, upgrades and mechanical testing of the compressor by MAN Energy Solutions, the equipment’s manufacturer, with quality assurance and control by experts from the vessel’s owner SBM Offshore as well as Exxon.
On April 13, ExxonMobil announced that its third phase of testing of the repaired gas compression equipment on the Liza Destiny had failed and that this had resulted in production being slashed to 30,000 barrels. However, several days later the Company said that it had begun ramping up output and that a solution was at least three months away during which controversial flaring would occur. The gas compressor was sent to Houston, Texas in the United States for repairs.
With the compressor having had to be repaired twice during the early part of this year, the EPA modified the Environmental Permit for the Liza Phase 1 Development Project mandating EEPGL to pay for gas flaring once it continues beyond a 14-day period.
