–as EPA modifies environmental permit for Liza Phase One project
OWING to the flaring of a significant amount of gas at the Liza Phase One development offshore Guyana, the Environmental Protection Agency (EPA) has modified the environmental permit for this project, leaving operator, ExxonMobil to stand the cost of any excess flaring.
Due to technical issues related to the flash-gas compressor aboard the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel, which is servicing the Liza Phase One project, Esso Exploration and Production Guyana Limited (EEPGL)-ExxonMobil’s local subsidiary – resumed flaring offshore Guyana, following intermittent periods of flaring since December 2019.
The flash-gas compressor was repaired, upgraded and safely re-installed, but was slated to undergo a comprehensive three-phase testing programme to ensure full safety.
However, during the final stage of the three-phase testing programme, the company encountered a problem with the discharge silencer. A discharge silencer is used to attenuate noise produced by the expansion of air, steam or gas at elevated pressure to atmospheric pressure.
The contraption has since been sent for repairs and upgrades, as work continues in an effort to return operations to normal levels.
Initially, as result of the damaged discharge silencer, production at the Liza Destiny was initially reduced significantly, moving from 120,000 to 30,000 barrels per day, a decrease of 90,000 barrels. But, amid the ongoing repairs, the company has started to ramp-up production, which has since moved from 30,000 barrels of oil per day to between 100,000 and 110,000 barrels per day, at a flare level of no more than 15 million standard cubic feet of gas per day (Mscfd).
The EPA, in a statement issued on Thursday, related that ExxonMobil, as a result of its flaring activity, was projected to exceed the 14 Billion Standard Cubic Feet (Bcf) of gas estimated by the Environmental Impact Assessment (EIA) to be flared for the project, on May 13, 2021.
“In light of the foregoing, EPA and EEPGL have been engaged in discussions regarding the technical and legal issues regarding modifications to address flaring,” the EPA said.
The environmental permit for the Liza Phase One development was since recalled and modified to include specific regulatory requirements for flaring of associated gas offshore Guyana, in accordance with the EPA’s legislation.
On May 13, 2021, the modified permit was issued to EEPGL, having been signed by both the company and the EPA.
The modified environmental permit includes revised terms and conditions relating to emissions reporting requirements, technical considerations for flaring, timelines for flaring events and an obligation on the company to pay for the emission of carbon dioxide equivalent (CO2e) as a result of flaring in excess of these timelines.
Based on the terms of the new permit, as calculated by the EPA, EEPGL will have to pay US$30 per tonne of CO2e.
It was reported recently that considering the challenges created by the defective equipment aboard the Liza Destiny, Minister of Natural Resources, Vickram Bharrat, had said that EEPGL will replace the manufacturer of the compressor equipment, to ensure there is no flaring during future projects.
Minister Bharrat said the government took decisive action to effect this change, due to the constant flaring at the Liza Destiny FPSO vessel.
“This now has forced us to enter into engagements with Exxon to ensure that the Unity FPSO that is coming later in this year, and then Prosperity in early 2024, that we don’t have this issue with those FPSOs. “So, we have gotten that assurance that General Electric will be used as the manufacturer to ensure that the compressor, there is not a recurring problem on those FPSOs with the gas compressor,” Minister Bharrat related.
According to a report from the Department of Public Information (DPI), General Electric is a US multi-national company.
ExxonMobil had contracted German company, MAN Energy Solutions, to supply the compressor equipment for the Liza Destiny. That company, however, failed to correct the challenges encountered on the equipment used on the Liza Destiny, which have plagued the company’s operations since the beginning of oil production here. Minister Bharrat said the adjustment was needed since both the Liza Unity and Prosperity are each designed to produce 220,000 barrels of oil per day; almost twice the amount of the Liza Destiny. The government, he related, has maintained daily contact with ExxonMobil to ensure that a swift resolution is derived for the challenges on the Liza Destiny.