Gas developments underway in Guyana and Suriname position the two as potential cost-competitive exporters of liquefied natural gas (LNG) to their Caribbean neighbors and South America, as well as Southeast Asia, according to a new analysis by Wood Mackenzie (WoodMac).
With an estimated 13 trillion cubic feet of discovered non-associated gas in aggregate, the Haimara cluster in Guyana’s Stabroek block and the Sloanea discovery in Suriname’s Block 52 could supply up to 12 million metric tons per annum (MMtpa) of LNG by the next decade, the energy research firm said Monday.
“These sources could deliver this potential LNG supply at a breakeven, excluding shipping and regasification costs, of about US$6/mmbtu (FOB NPV10 breakeven)”, WoodMac said in the analysis on its website. “The positive economic results are supported by high well productivity and upstream partners experienced in LNG commercialization.
“This comes at a time when the global market still needs 105 mmtpa of pre-final investment decision LNG to fill the supply/demand gap by 2035”.
Amanda Bandeira, WoodMac research analyst for upstream oil and gas in Latin America, said, “US and Qatar LNG dominance is rapidly growing, but there is a supply window in the mid-2030s coming in part from the US President Biden’s pause on approving new US LNG export projects”.
On January 26 the Biden administration announced it was pausing pending permitting decisions on the export of LNG to countries without a free-trade agreement with the United States. The indefinite moratorium allows the Energy Department to review considerations on the security of domestic supply, local gas prices, environmental impact and climate risks.
“In this environment, Guyana and Suriname can offer a new cost-competitive LNG supply source and serve as regional suppliers, holding shipping costs advantage to address Caribbean and South American demand”, Bandeira added.
“They are also on par with US Gulf and West Africa projects to deliver to the main demand centers in Southeast Asia”.
However, Guyana and Suriname need to provide clear commercial structure and fiscal terms for the projects to realize the countries’ LNG potential, the report said.
“In Suriname, there is still no set terms for non-associated gas developments, but we expect this project to move forward swiftly – with first gas in 2031 – as the government and project partners have agreed to a 10-year tax break”, said Luiz Hayum, WoodMac principal analyst for upstream in Latin America.
“In Guyana, the government and upstream partners alignment on fiscal terms and commercial structure are [sic] less advanced, and any disputes could delay the project first gas beyond 2031”.
Tax Break for Block 52 JV
Sloanea was announced by Petroliam Nasional Bhd. (Petronas) on December 11, 2020, as the first discovery in Block 52, followed by the Roystonea and Fusaea discoveries in 2023 and 2024 respectively. Petronas Suriname E&P BV operates Block 52, in the north of Paramaribo’s coast, with a 50 percent stake. ExxonMobil Exploration and Production Suriname BV holds the other half.
On March 4, 2024, Suriname’s national oil and gas company Staatsolie Maatschappij Suriname NV said the Block 52 partners agreed to further explore the Sloanea area for potential gas production.
“The LoA [letter of agreement] is necessary for further exploration of the gas discovery made in 2020 with the Sloanea-1 exploration well in Block 52”, Staatsolie said in a press release.
The discovery “involved a small quantity that was initially seen as commercially unattractive to develop into a production field”, Staatsolie said. “The development of an offshore gas field is more challenging and complex to explore in technical and economical perspective than an offshore oil field”.
Nonetheless Petronas and Staatsolie held discussions to further explore Sloanea 1, which have now led to the LOA, Staatsolie said. According to the Staatsolie statement Petronas was to drill the Sloanea 2 appraisal well in April 2024, followed by a production test.
“This LoA is an agreement that broadly sets out the agreements, principles and conditions to further investigate and increase the feasibility of the development of a commercial gas field in Block 52”, Staatsolie said.
“An important part of the feasibility is the guarantee of a tax-free period of ten years from the start of production”, which has been granted in the LOA with the government’s approval, Staatsolie added.
The LOA serves as a basis for further talks for a gas addendum to the production sharing contract (PSC) for Block 52, which was signed April 2013.
“In the event of a gas discovery, the PSC prescribes that parties will have to negotiate a ‘Gas Addendum’”, Staatsolie said. “This addition to the production sharing contract will establish the procedures and conditions under which the Block 52 partners PETRONAS and ExxonMobil can assess the gas discovery and possibly subsequently develop and produce it.
“Because the negotiations for the Gas Addendum can last almost a year, the agreements made so far in the negotiations are recorded in the LoA”.
Petronas plans to start gas production 2031 if Sloanea 2 proves to be a commercial success. An associated floating LNG facility could also be constructed, Staatsolie said.
Stabroek Dispute
While Stabroek has propelled Guyana to be among the fastest-growing oil producers outside the Organization of the Petroleum Exporting Countries — according to the U.S. Energy Information Administration, the commercial future of the 6.6 million-acre block has become uncertain amid a court dispute that emanated from Hess Corp.’s pending acquisition by Chevron Corp.
A centerpiece of Chevron’s yet-to-be-completed $60 billion purchase of Hess is a 30 percent stake in Stabroek, estimated to hold nearly 11 billion barrels of oil equivalent recoverable resources. Operator and 45 percent owner ExxonMobil initiated arbitration proceedings March 6 before the International Chamber of Commerce tribunal asserting that its pre-emption right applies to the Chevron-Hess merger. A pre-emption right or right of first refusal (ROFR) allows a partner to prevent a co-venturer from selling a stake to an outside party without first offering the stake to the partner.
Hess filed for arbitration March 11 with the opposite claim. State-owned China National Offshore Oil Corp., which holds the remaining 25 percent interest, followed suit March 15 also asserting its pre-emption right against Chevron’s potential entry.
The three Stabroek owners later agreed to unify the arbitration cases into one, according to a filing April 24 with the U.S. Securities and Exchange Commission (SEC).
On July 31 Chevron and Hess said an arbitral decision could not be obtained until after mid-2025. “The arbitration merits hearing about the applicability of the Stabroek ROFR to the Merger has been scheduled for May 2025, with a decision expected in the following three months”, they told the SEC. “Hess and Chevron had expected and requested that this hearing be held earlier, but the arbitrators’ common schedules did not make this possible”.
To contact the author, email jov.onsat@rigzone.com
element
var scriptTag = document.createElement(‘script’);
scriptTag.src = url;
scriptTag.async = true;
scriptTag.onload = implementationCode;
scriptTag.onreadystatechange = implementationCode;
location.appendChild(scriptTag);
};
var div = document.getElementById(‘rigzonelogo’);
div.innerHTML += ” +
” +
”;
var initJobSearch = function () {
//console.log(“call back”);
}
var addMetaPixel = function () {
if (-1 > -1 || -1 > -1) {
/*Meta Pixel Code*/
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘1517407191885185’);
fbq(‘track’, ‘PageView’);
/*End Meta Pixel Code*/
} else if (0 > -1 && 97 > -1)
{
/*Meta Pixel Code*/
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘1517407191885185’);
fbq(‘track’, ‘PageView’);
/*End Meta Pixel Code*/
}
}
// function gtmFunctionForLayout()
// {
//loadJS(“https://www.googletagmanager.com/gtag/js?id=G-K6ZDLWV6VX”, initJobSearch, document.body);
//}
// window.onload = (e => {
// setTimeout(
// function () {
// document.addEventListener(“DOMContentLoaded”, function () {
// // Select all anchor elements with class ‘ui-tabs-anchor’
// const anchors = document.querySelectorAll(‘a .ui-tabs-anchor’);
// // Loop through each anchor and remove the role attribute if it is set to “presentation”
// anchors.forEach(anchor => {
// if (anchor.getAttribute(‘role’) === ‘presentation’) {
// anchor.removeAttribute(‘role’);
// }
// });
// });
// }
// , 200);
//});
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=6729cf8a39a54525b3cdcfcd40fbab0e&url=https%3A%2F%2Fwww.rigzone.com%2Fnews%2Fguyana_suriname_could_be_costcompetitive_regional_lng_suppliers_woodmac-05-nov-2024-178644-article%2F&c=10979276883015908784&mkt=en-us
Author :
Publish date : 2024-11-04 18:20:00
Copyright for syndicated content belongs to the linked Source.