Page 5 - LatAmOil Week 15 2022

LatAmOil COMMENTARY LatAmOil

Onshore construction Questions remain
It began doing so on February 18, when it issued In short, it seems like the outlines of PDC’s
an official statement on the award of the FEED project have become clearer over the last two
services contract to SES. It explained that the months. The company has stated that it wants
contract would cover the following structures: to receive gas offshore and then pipe it to shore
Gas-receiving facility: PDC described this for liquefaction and local use within Suriname.
structure as “the landing point for offshore gas But these are not the only questions sur-
pipeline deliveries to service the various gas con- rounding the project. PDC has not specified
sumers in the DWP and SEZ.” It also indicated where it hopes to find feedstock for its LNG
that the structure would be onshore, saying: plant – and it has no guaranteed source, as Fire-
“Access to affordable and stable energy is key bird LNG is not tied into any upstream projects.
to attracting world-class tenants to the WP and Nor has it addressed the issue of whether Guy-
SEZ. Establishing the required onshore facilities ana is interested in participating in the project.
to accept offshore gas production is critical to If Georgetown is reluctant to sign on, Firebird
eliminating or substantially mitigating the envi- LNG could face problems, according to Andres
ronmental and economic impacts of flaring in Armijos, the head of Latin America research at
the [Guyana-Suriname] basin.” Welligence Energy Analytics.
Gas liquefaction plant and LNG export facil- Armijos stressed the fact that PDC was
ity: PDC implied (but did not state explicitly) planning to build exclusively in Suriname and
that the 4mn tpy gas liquefaction plant would be pointed out that Guyana had not yet indicated
onshore. It focused instead on its emissions-re- whether it was willing to send its gas across the
duction goals, saying that it intended to pro- border for processing or consumption.
vide electric power to the facility in a way that If the Guyanese side opts to pursue its own
brought net carbon dioxide emissions down to gas export projects, it may not want to opt in
zero. to a cross-border arrangement, even if there
Additionally, it highlighted its hydrogen is a good business case for Firebird LNG, he
ambitions, saying: “The cutting-edge facilities remarked.
will be designed to fully integrate liquid hydro- That said, he added, there are some argu-
gen production, storage and loading alongside ments in favour of PDC’s plan. “The project
the LNG produced at the plant, enabling Suri- makes sense from the point of view that there is
name to lead the energy transition in South a multi-trillion cubic foot gas resource located
America and CARICOM [the Caribbean Com- in an area with minimal local demand,” he
munity organisation].” told NewsBase. “Given the uncertain outlook
regarding future gas supplies from Russia and
Offshore pipeline the increased scrutiny on security of supply, PDC has no
PDC then made more information available in there will be a market for LNG. But constructing
late March, after a delegation from the company a large-scale, greenfield LNG plant always has guaranteed
travelled to Paramaribo and discussed the pro- challenges.”
ject with Suriname’s President Chandrikapersad He continued: “There is no doubt that a sub- source of gas,
Santokhi and Vice President Ronnie Brunswijk. stantial gas resource exists in the Guyana-Suri-
According to a statement issued by the name basin, [with reserves of] at least 15 trillion as Firebird LNG
company’s partner HBS, PDC and MAD have cubic feet [425bn cubic metres] and growing. is not tied into
formed Firebird LNG to serve as a vehicle for The domestic markets in Guyana and Suriname
the implementation of the LNG project. HBS are small, demand for gas internationally is any upstream
described PDC’s plan as “a mid-scale LNG solu- growing strongly and this north-eastern cor-
tion” and said the company planned to build its ner of South America is well located to supply projects
gas liquefaction plant in Nickerie, a north-west- Europe, as well as the rest of the continent. How-
ern district of Suriname that shares a border ever, there is no infrastructure in the area, and
with Guyana. the upstream developments are still at an early
“PDC will engage natural gas producers in stage.”
the Suriname-Guyana Basin to provide a gas Under these circumstances, Armijos told
solution for producers and much-needed LNG NewsBase, Firebird LNG’s success is likely to
to the global market,” it explained. “Firebird hinge on securing access to gas supplies. “Based
LNG will develop an open-access gas pipeline, on the proposal, a key objective will be achieving
with equal treatment for producers on both commercial terms with the upstream companies
sides of the border to deliver natural gas to shore (principally TotalEnergies in Suriname and Exx-
for liquefaction.” onMobil in Guyana) for the supply of gas,” he
The statement went on to say that PDC said. “Anchor contracts will be needed to secure
hoped to bring Firebird LNG to the final invest- financing for such a capital-intensive project.”
ment decision (FID) stage quickly, in the hope of He also expressed reservations about the
expediting construction. It stressed the urgency prospects for bringing the proposed gas lique-
of the project, noting (in an apparent reference faction plant online in the near future. “While
to the Russian invasion of Ukraine) that world it’s possible that development can be acceler-
LNG markets had recently been experiencing ated, projects of the scale suggested (4mn tpy)
significant disruptions and implying that gas typically take six to seven years to bring online,
from the Guyana-Suriname basin could help putting start-up towards the end of this decade,”
improve supply conditions. he commented. ™

Week 15 14•April•2022 www. NEWSBASE .com P5