Government’s advocacy pays off: ExxonMobil shifting focus to natural gas

The Government of Guyana has consistently advocated for the production and utilization of the country’s natural gas resources to complement oil production.

During the Guyana Energy Conference last week, Vice President Bharrat Jagdeo told Reuters, “There shall be a project. We have to monetize the gas, and if Exxon doesn’t want to do it, we already said to them… we have a lot of people who are interested in doing this on their own.”

This strategic push has led ExxonMobil, which previously prioritized oil, to commit to multiple natural gas projects. These developments are expected to diversify Guyana’s economy and create additional revenue streams. Below is a breakdown of the natural gas production projects ExxonMobil is pursuing and their associated benefits.

1. Gas-to-Energy project – Phase 1

ExxonMobil has committed to supplying 50 million cubic feet per day (MMcf/d) of gas from the Liza field to shore via a pipeline installed in 2024. The gas will be used for:

• Power generation: A 300-megawatt (MW) power plant will provide reliable and affordable electricity, significantly reducing Guyana’s dependency on imported fuels and allowing for a reduction in the cost of power by 50%.
• Natural Gas Liquids (NGL) production: About 4,000 barrels per day (bpd) of NGLs will be extracted and utilized, supporting industrial development.

2. Gas-to-Energy Project – Phase 2

Building on Phase 1, ExxonMobil has identified additional gas resources to increase the pipeline’s utilization to its full capacity of 120 MMcf/d. This expansion will incorporate:

• Increased power generation: A second power plant will be developed, raising total generation capacity using natural gas from 300 MW to 600 MW.
• Enhanced NGL production: Output will grow from 4,000 bpd to approximately 9,800 bpd.
• Projected timeline: The second phase is expected to begin several years after the first. The additional facilities could be constructed in two years. Proposals are expected to be opened for review in March.

3. Hammerhead Project

The Hammerhead development will contribute significantly to both oil and gas production:

• Oil production: Up to 180,000 barrels per day.
• Gas production: Up to 95 MMcf/d, with 10 MMcf/d allocated to fuel the floating production, storage and offloading (FPSO) vessel’s operations.
• Pipeline connection: A new pipeline will link the Hammerhead FPSO to the Gas-to-Energy project pipeline, ensuring efficient transport of gas to shore.
• Reservoir utilization: Some Hammerhead gas may be sent to the Liza Unity FPSO for reinjection to optimize oil recovery.
• Strategic role: Hammerhead’s gas production aligns with ExxonMobil’s announcement that it has found additional gas reserves to fully utilize the pipeline’s 120 MMcf/d capacity.

4. Longtail Development

The Longtail project represents a major step forward in Guyana’s gas production strategy, marking the first development focused on gas not linked to oil production.

• Oil production: Approximately 240,000 barrels per day.
• Gas production: Up to 1.2 billion cubic feet per day (Bcf/d), a significantly larger quantity than the Gas-to-Energy Project.
• Startup timeline: Expected to begin production in 2030.

5. Future Developments in the Southeastern Stabroek Block

Beyond Longtail, ExxonMobil has discovered significant non-associated gas reserves in the southeastern section of the Stabroek Block, particularly at the Haimara and Pluma fields.

• Vision for development: ExxonMobil has outlined a potential plan to install an additional pipeline from the southeastern Stabroek Block to Berbice.
• Floating LNG facility: An offshore floating LNG plant could be built along this pipeline route to facilitate gas exports.
• Industrial development: The pipeline’s onshore segment in Berbice could support major industries, such as a fertilizer plant, a data center, and an alumina facility, though these projects would be pursued by private investors.
• Government involvement: The government has engaged Fulcrum LNG, a U.S. startup, as a potential partner for handling gas development, but no definitive agreements have been reached yet.

The Government of Guyana has played a central role in shifting ExxonMobil’s focus toward natural gas production, ensuring that the country’s vast resources are utilized for economic diversification. This will be guided by a gas monetization strategy that is being drafted by consultants. Through constructive engagement with investors and strategic policymaking, Guyana is facilitating projects that will support industrial growth, job creation, and a better life for all its people.