Two of the world’s latest oil exploration hotspots, South American neighbors Guyana and Suriname, could become major LNG exporters early next decade if they develop the vast non-associated natural gas resources discovered in their offshore blocks.
The resource is there, the costs could be competitive, and export destinations plentiful—from other countries in central and South America to Southeast Asia, according to energy consultants Wood Mackenzie.
However, uncertainties about the fiscal and commercial structure of LNG export projects in both countries could delay or discard development projects, WoodMac said in a report last week.
Guyana and Suriname have been the focus of exploration and development by oil majors in recent years.
Guyana already produces more than 660,000 barrels per day (bpd) of crude from the Stabroek block operated by ExxonMobil. Total production capacity from the Stabroek block, where more than 11 billion oil-equivalent barrels have been discovered, will reach 1.3 million bpd by the end of 2027, Exxon said earlier this year, when it announced the green light to the $12.7 billion Whiptail development, its sixth offshore Guyana.
In neighboring Suriname, French supermajor TotalEnergies has just announced the final investment decision (FID) for the GranMorgu development, which will see 220,000 bpd oil output from the Sapakara and Krabdagu oil discoveries in 2028.
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The early developments in both Guyana and Suriname focused on crude oil, but non-associated natural gas reserves are also worth noting, and potentially developing, exploration and production companies say.
Malaysia’s state firm Petronas, which has made several oil and gas discoveries in Suriname’s Block 52, said in August that it had “achieved outstanding successes in its exploration and appraisal activities” in Malaysia and internationally.
A successful drilling of the Sloanea-2 appraisal well in Block 52 offshore Suriname “has bolstered PETRONAS’ prospects in the basin and opens the possibility of developing a standalone Floating Liquified Natural Gas (FLNG) project at the field in the future,” the company said.
Petronas is currently assessing the feasibility of an integrated development strategy for gas and oil extraction within Block 52, where its partner is Exxon.
The global LNG market would welcome new supply in the early 2030s from sources other than the big three—the United States, Qatar, and Australia.
The U.S. and Qatar will dominate new LNG supply in the late 2020s, but there could be a supply gap opening in the early 2030s that Guyana and Suriname could help fill, according to Wood Mackenzie.
Global LNG imports are set to continue rising as Asia pulls in a lot of additional demand, analysts and industry players say.
For example, Shell, the world’s top LNG trader, expects global LNG demand to surge by 50% by 2040, driven by higher demand from Asia, with coal-to-gas switching in China and a boost in LNG consumption to fuel economic growth in South and Southeast Asia. The global LNG market is set to continue growing into the 2040s, largely driven by China’s industrial decarbonization and strengthening demand in other Asian countries, Shell said in its annual LNG outlook earlier this year.
In view of an LNG supply window in the early 2030s, “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,” said Amanda Bandeira, research analyst, Latin America Upstream Oil and Gas for Wood Mackenzie.
“They are also on par with US Gulf and West Africa projects to deliver to the main demand centres in Southeast Asia.”
But in order to take a market share of the global LNG supply, Guyana and Suriname need to move quickly with fiscal and regulatory issues, according to WoodMac.
By Tsvetana Paraskova for Oilprice.com
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Publish date : 2024-11-11 10:00:00
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