The safety of Guyana’s proposed gas-to-shore pipeline is being questioned based on available plans and critics have also taken aim at the lack of information from the government.
On Saturday, the Moray House Trust held a virtual panel discussion on the pros and cons of the gas-to- shore project and attendees heard that representatives of the government had declined to participate. Isabelle de Caires, Chair of Trustees at Moray House Trust, reported that they reached out to technocrats within the government to participate in the panel discussion but the invitations were turned down.
Several of the participants at the discussion, including the head of Transparency Institute Guyana Inc (TIGI) Frederick Collins, also accused the government of remaining silent on information relating to the operations of the oil and gas sector.
The US$900m gas-to-energy project entails the construction and operation of a 12-inch pipeline, approximately 220 kilometres long, from the Liza Phase 1 and Liza Phase 2 Floating, Production, Storage, and Offloading (FPSO) vessels in the offshore Stabroek Block, to an onshore natural gas liquids (NGL) and natural gas processing plant (NGL Plant) located at Wales, West Bank Demerara. Government also has plans for a development zone in the area, which once accommodated a thriving sugar plantation and factory.
Esso Exploration and Production Guyana Limited (EEPGL), Exxon’s local subsidiary, is the operator of the project and has since submitted a proposal seeking environmental authorization to construct and operate components mentioned in the project. For several months now, the terms of reference of an Environmental Impact Assessment for the project have been under construction. It is unclear when the terms will be completed.
The pipeline is expected to transport up to approximately 50 million standard cubic feet per day (MMSCFD) of dry gas to the NGL Plant while the maximum flow of the pipeline is approximately 120 MMSCFD. The NGL plant onshore will remove propane, butane and pentanes+ liquids with the ability to be sold and treat the remaining gas to specifications required by the power plant, including dehydration and pressure letdown of gas.
The route, according to EEPGL, was selected by the government and if approval by the Environmental Protection Agency (EPA) is given, construction is expected to start by mid-2022.
During Saturday’s discussion, John Palmer, a foreign national with expertise in quality assurance schemes and auditing the forestry sector, raised some questions on the safety of the pipeline. He looked at the project, based on the available public data and spoke to four non-technical sections – context, the demand, is there enough gas and is the pipeline safe?
With some knowledge of the petroleum sector and access to a petroleum engineer, Palmer related that he found it strange that Guyana allowed the oil companies, in this case, ExxonMobil, to dictate the details of the contract when the country holds significant expertise in the extractive sectors.
Looking at the demand aspect of his analysis, Palmer related that based on projections by the Guyana Power and Light (GPL) there is a considerable increase in demand for power. However, he pointed out that Guyana’s power infrastructure has been deemed antiquated since the mid-1990s when the country presented one of the most globally recognised national development strategies.
“So whatever is now generated by new projects, has still got to also cope with the need to spend a lot of money on effectively a new grid. And this is true whether you’re going to rely on Amaila Falls (for hydropower) or whether you’re going to use this interim solution of a gas-to-shore project,” he told the virtual gathering.
He added that it is clear that the gas-to-shore project could provide a very useful halfway house contribution to modernising the power supply but stressed that it needs to be supplemented by work on the electricity grid.
A close examination of the EIAs for the various offshore projects would show how careful Exxon is in setting the SURF elements of the oil fields – subsea manifold, pumps, pipes and monitoring apparatus. The company drills down, puts in strong foundations and locks it in place.
However, according to Palmer his investigation of the planned gas pipeline brought up something striking.
“As I can see the pipeline, which of course has to go from the gas field, up to the slope of the continental shelf and along the top of the continental shelf to the shore of Guyana, that pipeline apparently isn’t going to be anchored at all. It’s just going to be laid flat. It’s not going to have any special coatings or armouring. It’s not going to be set inside a concrete culvert. I find this really very odd especially as we also know from the EIA, the current running through the Liza 1 field was so strong that when they were trying to do baseline surveys of fish, they couldn’t set the fish traps because the current just was sweeping them away. But nevertheless, the pipeline is going to be laid without foundations,” he contended.
Palmer explained that it would have to cross the moving Amazonian mud banks, ranging between 4-40 kilometres and moving up to 1300 metres east to west annually. He noted that by merely laying the pipeline on the mud banks puts it at risk of arching and subsequent ruptures.
“Indeed, some of the commentators have noticed that this (pipe) which is proposed and will be carrying highly flammable gas under pressure and I would have thought this was a real hazard…this is what happens if you lay a pipe when you don’t anchor it. You bend it, and indeed it then splits and guess what, the gas comes fizzing out it’s not that this is a new problem. Seabed pipelines have been rusting and getting bent in elsewhere and Trinidad has reported literally hundreds of leaks from old rusted bed pipelines, which have been damaged and I think I already need to look carefully as to the management of this pipeline,” he said.
Associated gas questioned”
Based on the Environmental Impact Assessments (EIAs) conducted for the various offshore projects executed by ExxonMobil, the company said the principal use of the associated gas is reinjection to maintain reservoir pressure. Palmer said that the decision was made after clear analysis, by Exxon which is a major retailer of gas coming from numerous wells with very cheap gas derived from fracking in North America.
“So Exxon decided it absolutely wasn’t worthwhile trying to sell gas from these offshore wells of Guyana because the cost of turning it into usable marketable gas in international markets was simply not worthwhile when everyone could get hold of fracked gas much more cheaply. So Exxon’s decision was no we will reinject everything that we don’t need to power the turbines on the FPSO,” Palmer said before questioning how the company deals with natural gas offshore Guyana.
Looking at the natural gas outputs from the Liza 1 and 2 wells, Palmer said in the case of the former 20 million standard cubic feet of gas is enough to power the turbines per day. He said that 180 million standard cubic feet of gas comes up the pipe together with the oil.
Citing the widely reported issues with the gas compressor onboard the Liza-1 FPSO, Palmer averaged 16 million standard cubic feet of gas being flared daily.
“That means you got 144 million standard cubic feet which hasn’t been mentioned. I’m assuming that that SBM did manage to pump that down into the reservoir again, but it hasn’t been mentioned and it seems odd that the EPA doesn’t seem to have asked about this or reported on it. So that’s a puzzle.
“However, Exxon has told the Government of Guyana at least twice very firmly, in October 2016 and again in August 2018, that yes, we have gas to spare. Now how they got gas to spare if they’ve been reinjecting it isn’t clear to me. That’s something that civil society might like to question more intensively,” Palmer questioned.
Based on the information related by Exxon, of their ability to either supply 30 million standard cubic feet of natural gas per day for 15 plus years or 50 million cubic feet daily for 12 plus years, Palmer questioned why neither the EPA nor the government requested an independent auditor to check whether the values are consistent with the responsibility to reinject excess gas.
He explained that 30 million standard cubic feet per day would be enough to provide 188 megawatts and 50 million will generate 250 megawatts.
Criteria
TIGI’s head outlined three sets of criteria the government must meet before the gas-to-shore project would get its approval. Collins called for the project to fit within a transition plan to move away from the utilisation of fossil fuel power production and into the realm of green energy.
He added that TIGI would like to see the separate design, construction and finance options and also questioned why the Guyana National Industrial Company was not involved in the project. More importantly, Collins said that TIGI wants the project to be a result of a public partnership and not privatized. He said the government can create a plan where every Guyanese has the opportunity to become shareholders in the venture.
“So, one of the things of the desk study is it touches upon public-private partnerships as a structure that is recommended and we want to say we don’t agree. We do not agree because this is usually a way to privatize the benefits and socialize the costs. This is the kind of thing that we’re seeing all around the world,” Collins said.
He added that TIGI would also like to see the involvement of various stakeholders and agencies as part of a committee to ensure transparency and accountability in the project.
