Both the government and ExxonMobil seem to be moving ahead with their plans for the gas-to-energy project despite the absence of an environmental permit from the EPA.
The project is part of the bigger plan by the government for the Wales area and will be executed in two parts. ExxonMobil will be responsible for the construction of the pipeline to transport natural gas from offshore Guyana while the government is responsible for the construction of the Natural Gas Liquids (NGL) plant and other supporting facilities.
Moving forward…
On Saturday, the Minis-try of Natural Resources published a ‘request for proposals’ (RFP) for consultancy services for the supervision of their aspect of the gas-to-energy project. The RFP ad invited “…eligible Consultancy Firms to submit proposals for (a) Project Management Consultant for the Integrated NGL Plant and 300 MW CCGT Power Plant Project. The main objective of this Consultancy is for the Consultant to assist the Government of Guyana through the Gas to Energy Task Force in the design, review, construction supervision and general project management of the development of the integrated plants, and contract administration throughout the implementation process and thereafter during the defects liability period.”
The Ministry said that the project is estimated to last for 42 months from the date of the contract signing and at least 12 months after to cover the defects liability period. It added that the Consultants will be selected in accordance with the policies and procedures set out by the National Procurement Act.
Bidders are expected to submit a combined technical and financial proposal to the National Procurement and Tender Administration Board no later than August 30 while they may also submit a letter of intent to bid to the Ministry or email to jmckenzie@nre.gov.gy or gastoenergy@nre.gov.gy.
Exxon, through its consultant Environmental Management Resources (ERM), submitted an Environmental Impact Assessment (EIA) on April 13, 2022, for their part of the project. The impact of the project is rated as minor to the environment.
The pipeline is expected to land at Crane/Nouvelle Flanders, West Coast Demerara and make its way to Wales on the West Bank of the Demerara. The project will involve capturing associated gas produced from crude oil production operations on the Liza Phase 1 (Destiny) and Liza Phase 2 (Unity) Floating, Production, Storage, and Offloading (FPSO) vessels.
The project is pegged at US$1.3 billion and the government hopes it will lead to vastly lower energy costs that would enable a spurt in manufacturing. However, there have been doubts over the country’s execution capacity and whether a feasibility study has been done for this massive project which would be the biggest in the country’s history.
Following the submission of the EIA to the Environmental Protection Agency (EPA), ERM held a number of public disclosure meetings with residents in various regions as a means of sharing their findings. The study is now with the Environmental Assessment Board (EAB).
Last Thursday, following questions from Stabroek News, Chair of the EAB Pradeepa Bholanath related that they are yet to look at the EIA.
“Right now we have one more hearing [on objections before the Board] and that is set for soon and we are looking at that. We have not yet gotten around to the [gas to energy] EIA as yet but after we are finished with the hearing, we will be doing that,” she related.
A source close to the process told Stabroek News that the EPA is currently in discussions with ERM to make adjustments to the environmental study before it goes to the Board for approval.
“As you know the EPA and the consultant would have a back and forth after the public comments period is over. So during those public disclosure meetings, we had some suggestions from the stakeholders and some information was requested from ERM so that was done. Now it is up to the Board to review and decide the way forward.
“To review, they would more than likely hire an independent consultant to look over the EIA and make recommendations following which approval would be given or more information requested. That can take anywhere between one week or months and then the EPA will issue the permit and approve the EIA,” the source said.
The environmental permit is an important aspect of any project since it takes into account the effects on the natural environment and mandates mitigating measures. However, over the last year, the EPA has been accused of wantonly disregarding its lawful mandate and failing to protect the environment.
Trust
Last Thursday, President Irfaan Ali pleaded with Guyana’s citizenry to trust his government to give them a gas-to-shore project that will bring not only lower power costs but put savings into their pockets while expanding development and prosperity for the nation. And as he announced that no cost has yet been put to the project estimated by analysts to be over US$1.3 billion, the President said that by the end of this year that sum would be known as the nine firms which have been shortlisted to bid for its construction have up to Sep-tember to submit their proposals and government estimates a contract signing in the last quarter of this year.
“I hear people talking about different figures; US$500 million, US$700 million, US$1 billion. We operate and we are going on with this project in a very open and transparent way. It is a public bid. It is a public bid! Companies put in their figures… it is not someone sitting in an office saying ‘this is the project cost’. It is a process that is arriving at a cost based on an open and transparent (process). So whether it comes in at (US)$700 million or US$1 billion, that is what the process would decide. Not influenced by anyone. We would like for it to come in as less as possible but we have to go with what the process delivers,” he had said.
Ali said that as the project cuts across sectors, he is urging the public to see beyond a pipeline. The pipeline is expected to land at Crane/ Nouvelle Flanders, West Coast Demerara, and make its way to Wales on the West Bank of the Demerara. Some 150 acres of land at Wales has been allocated for the project slated to cut power costs by 50 per cent.
The government’s power plant is expected to utilise “dry gas” for electricity generation. The impacts of that power plant have not been addressed in the Environmental Impact Assessment for the pipeline, since it will not be constructed by EEPGL. The government has not yet announced if it will be conducting environmental studies.
Additionally, it has not yet met with residents in the path of the pipeline. During the public disclosure meetings, residents consistently questioned Exxon and ERM about compensation and consultation but the companies could not answer. Instead, they directed questions to the government which will be responsible for the development of a resettlement plan. However, Exxon will be assisting as well to ensure that the plan is in conformity with international standards.
Stabroek News, unsuccessfully, tried to contact Minister of Natural Resources Vickram Bharrat for information relating to the government’s aspect of the project.
Exxon estimates the current project cost at approximately US$1.3 billion (GY$260 billion) and adds that a “higher certainty cost estimate” will be developed following the negotiation of all major contracts. The company states that if all approvals are granted in a timely manner then it is aiming for an early start on construction. The project aims to employ approximately 800 workers during the peak construction stage and 40 full-time workers during the operation phase.
…pipeline
The project will be executed in three phases – construction, operation and decommissioning. It entails three aspects as well – an offshore pipeline which is approximately 220 kilometres of a subsea pipeline extending from new subsea tie-ins at the Destiny and Unity FPSOs in the Stabroek Block to the proposed shore landing, located approximately 3.5 kilometres west of the mouth of the Demerara River; onshore pipeline that is a continuation of the offshore line and extends about 25 kilometres from the landing site to the NGL plant; and the NGL plant and associated infrastructure that will be located about 23 kilometres upstream from the mouth of the Demerara River on the west bank.
Both the Destiny and Unity FPSOs have pre-installed facilities to allow for the export of the associated gas with crude production.
Last month, Exxon called for proposals for the construction of the onshore aspect of the pipeline. The request for information (RFI) “seeks detailed commercial and technical information from suppliers for meeting Esso Exploration and Production Guyana Limited’s (EEPGL) bid selection requirements for the construction of an on-shore pipeline in Guyana.”
Exxon said that it “…plans to put in place a [lump sum] contract for the construction of an approximate 25km onshore gas pipeline and associated facilities in the Georgetown, Guyana area on the west side of the Demerara River. FEED, detailed engineering and procurement (excluding installation aids) will be completed and free issued by EEPGL.”
Exxon added that it is seeking to identify companies who can construct an onshore pipeline at the required location per EEGPL’s minimum requirements and that the RFI process provides the potential Companies with an opportunity to begin developing responses to potential requirements in the event the Company is selected for the proposal aspect of the project.
The scope of work includes the installation of the pipeline at least 1.22 meters in the ground along with clearing, grading, and maintaining right-of-way (ROW) to facilitate installation and safe movement of equipment and vehicles; creation of ROW access via track/road improvement (as/if required); transportation and handling of the pipeline within Guyana and work site; cold bending pipe sections to align with curvatures of existing terrain; welding and field joint coating following approved specifications; non-destructive testing (e.g., x-ray of welds) and overall quality control; trenching (including trench dewatering), lowering-in, backfilling, and installation of required environmental control devices to limit erosion; installation of cathodic protection; numerous canal and road crossings (HDDs will be required); a minimum of one above-ground valve station, with installation of appropriate fencing, lighting and security as needed; an above-ground receiving facility including civil work, fencing, valves, gas custody metering skid, lighting, electrical, instrumentation.
The companies would also have to adhere to Exxon’s local content requirement. The RFP document can be accessed on the websites of the Centre for Local Business Development and the Ministry of Natural Resources. The deadline for submission is July 15.
During the last public disclosure meeting at Wales on May 20, Exxon’s Gas to Shore Manager Friedrich Krispin had told residents there that the pipeline “is being fabricated in Brazil.”
However, when asked by Stabroek News how could be company be already building its pipe-line without any approvals from the regulatory bodies, Krispin changed his answer.
Instead, he said, “So when I said the pipe will be fabricated in Brazil, it’s in the future. We are waiting to get the EPA approval of the project before we make major investments. One of them is purchasing the pipes. So the start of the fabrication of the pipe hinges on us receiving the approval from the EPA.”
Nevertheless, both Exxon and the government seem to be moving ahead with the project.
