Like its 100 percent-owned subsidiary, National Energy (NE) — see the separate story in this issue of EnergyNow — the National Gas Company (NGC) is extending a helping hand to Guyana, following the discovery in May by U.S. energy giant ExxonMobil of 295 feet of high-quality, oil-bearing sandstone reservoirs with the Liza 1 well in the Stabroek block, 120 miles offshore the western Guyana coastline.
NGC’s president, Indar Maharaj, told this newspaper that he was “looking very closely” at where ExxonMobil intends to go from here, saying that more drilling of an exploratory and/or appraisal nature is inevitable.
“We expect the development of that discovery to happen in due course, despite the territorial claim by Venezuela,” he says. “At the end of the day, ExxonMobil will decide how much risk it wants to take on, how much of the value chain it wants to develop.”
He points out that “Trinidad and Tobago and Guyana have a very close relationship. We understand the energy business and are quite willing to hold Guyana’s hand and help them through this process.”
NGC and NE are on an external activity drive at the moment, as a natural extension of what both companies do at home.
President Maharaj explains, “For 40 years we have been inward-looking, but as our gas province and, now, hydrocarbon province matures, we will need to find ways and means of replacing the lost income which is going to happen. It might not be in the near future, but it is going to happen. So we need to make that leap, and the other option we are looking at clearly is, what are the opportunities in the international domain?”
Well, Guyana could be one such opportunity, but there are several others, such as the sale of liquefied natural gas (LNG) to power utilities in the Eastern Caribbean via the 500,000-tonne train that Luxembourg’s Gasfin Development SA wants to build at the Labidco industrial estate in La Brea.
There is also the export of gas by pipeline to Barbados, of which NGC has a 10 percent share via the Eastern Caribbean Gas Pipeline Co. (ECGPC).
As far as Caribbean LNG is concerned, “We hope to move to the project development (PD) stage by the end of the year. That’s our timetable. The project development agreement (PDA), now being pursued, involves NE, not NGC, along with Gasfin and the Ministry of Energy. We will come in at the point of finalising the gas supply contracts.”
The project is estimated, at this stage, to require about 70 million cubic feet a day (mmcfd) of gas for liquefaction.
Will the NGC group decide to take a share in Caribbean LNG, whose two existing backers are Gasfin Development and Parallax?
Mr. Maharaj has an elliptical reply to this. “If you’re going to take a share, you have to pay for it. Sometimes, it pays to be an unwilling bride, because if you appear too eager, you might overpay! Philosophically, going forward, we would like to become partners in all new investments, in the context of local ownership. So, yes, it is something we are looking at very, very closely.”
The NGC president stresses that “we don't want ownership in an enterprise simply for ownership’s sake. If we are not getting the proper return, it does not make sense.”
But if the NGC group did opt for a share in Caribbean LNG, “We would want to get more than the 10 percent we currently have in ECGPC and Atlantic Train 1.”