South Korea’s Hyundai Engineering and Construction Company has submitted a prequalification bid in the hopes of bagging the engineering, procurement and construction contract for the gas to energy project.
During a recent interview with Stabroek News, the company’s Vice President MunJeong Choi related that while the project is considered to be small for Hyundai, it can be used as a catalyst for larger collaborative ventures in Guyana.
“We have our first small project – gas to power project – that we have already submitted our pre-qualification bid for and we are looking forward to receiving the ITB (invitation to bid) documents. After that, we will be bidding for the project.
If we get the project it is not a kind of a big project for us because we are a company who can do like projects (up to) US$2 billion or US$3 billion. So we are looking for other big projects here as well,” she related.
The estimated so far US$900 million 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.
The Hyundai executive said that once they bid for the gas to energy project, they are more than likely to start setting up a local office. She explained that Hyundai Engineering and Construction Company has a strong presence all over the world.
“We do work mostly overseas and we do all the process starting from engineering, procurement, construction and complete turnover to the contractor. For the engineering and procurement, we have all the international expertise. We have worked with all the world’s famous national oil companies and major international oil companies and we have also worked with all the local companies all around the world,” Choi related.
“We have seen you have the new very huge, gas and oil recovery and is now in the very initial stage. It will become bigger and bigger and during the course, you will need to have a very reliable EPC (engineering, procurement and construction) company because of the size and complexity of this oil and gas project not anyone can do it. There are only a few companies that can do this size and complexity of oil and gas projects and we do have all the technology and experience from the past work with global companies. So we are very interested in providing our contribution to your development,” she added.
Choi, who was visiting Guyana for the recently concluded international oil and gas conference, told Stabroek News that she met with several government officials to further her company’s desire to set up a base here and contribute to the development of the oil and gas infrastructure.
She explained that the company is also looking at partnering with local businesses to build capacity and embark on other ventures.
“When we establish our base here … we will be looking to the local contractors because you know the oil and gas recovery is in the initial stage and you are now producing crude oil and gas is coming from that. You will have other phases and the gases will become bigger in capacity and then will you need to have processing plants and you need to have (a) natural gas … export facility and as well as the power plant and that is where we are the best.
“You will also have very many downstream projects such as fertilizers. I see your country is based on agriculture and right now you are importing all the fertilizers but you can build your own fertilizer (plant) and you can have all of your demands from the plant and after that, you can export them. So those are the kinds of expansion projects we can plan together with your authorities. We have the previous experience in doing that with other countries,” Choi related.
Construction of the pipeline for government’s gas to shore project will begin by the end of this year as a final investment plan will be made then, Project Head, Winston Brassington recently said during a presentation to potential investors at the oil and gas conference.
After four months in office, at the end of December key decisions made included that the minimum commitment of gas be moved from 30 million cubic feet per day (MMSCFD) to 50 MMSCFD. An agreement on a timetable to complete the project by 2024, with approximately the first 18 months to complete studies, complete engineering, and conduct a competitive tender for the construction of the pipeline was also determined.
Brassington had said that government knew then also that “Broad agreement on the key financial considerations included, estimated capital cost of the project, that funding of the pipeline by ExxonMobil would be out of Cost Oil, and competitive cost of power using gas such that the generation cost per kWH would be less than 7 cents/KWH at the generation plant”.
Since that time, he said that the size of pipeline was fixed at 12 inches with 50 MMSCFD of rich gas guaranteed initially and its capacity would most likely be around 120 MMSCFD. He noted that while there are queries about excess gas for sale, the current amount will be just enough for this country at capacity.
