–CGX announces; says multimillion-dollar project to be completed by 2023
AS work intensifies at the various oil blocks offshore Guyana, Canadian oil-and-gas exploration company, CGX Energy Inc., is positioning itself to capitalise on the plethora of opportunities that will stem from the expansion of the burgeoning oil- and-gas sector by commencing major civil works for the Berbice Deep-Water Port (BDWP).
The company holds three licences in the Guyana-Suriname Basin, a frontier Basin in South America with a proven hydrocarbon system, and highly-prospective deep-water plays that can be drilled in shallow water.
Outside of its direct exploration activities, CGX said it intends to utilise the BDWP to service the growing offshore demand in the oil-and-gas sector, and significantly shorten supply routes, simplify logistics, and reduce cost and operational risk.
“Travel time from the BDWP to offshore fields is approximately 12 hours, compared to approximately 2.5 days to regional ports currently used by operators. The BDWP port will enable provisioning of operators and vendors in territorial waters of both Guyana and Suriname,” the company related in a statement on Monday.
Already, through its wholly-owned subsidiary, Grand Canal Industrial Estates Inc. (GCIE), CGX is engaged in civil works related to the construction of the BDWP on 30 acres of land on the eastern bank of the Berbice River, adjacent to Crab Island.
“Currently, work is ongoing on the access road and connecting bridge, relocation of utilities and major construction of the site along the Berbice River,” CGX said, adding: “Construction of the wharf platform and access trestle are currently scheduled to begin in September 2021. The facility is designed to have a wharf platform of 220m length, and 30m width, accessed by a 50m trestle.”
Further, an approved dredging programme will be established to ensure that there is continual, unencumbered access to supply and cargo vessels. The depth for dredging is set to be maintained at a 7m (23 ft) low-tide draft within the berth area, and access channel that leads to the BDWP pier.
The energy company also owns and operates a 16-acre laydown yard in Berbice at Bramfield; this facility, located along the main Corentyne Highway, is fully permitted and operational as a logistics base, and will also service the BDWP, which is located 3.2 km from the Bramfield Logistics Yard.
The capital cost for the project, which is set to be completed by 2023, is currently estimated at US$70 million, with a further expansion to construct heavy lift and fabrication facilities being contemplated.
“Work is on schedule for the operationalisation of the offshore oil-and- gas support shore base by mid-2022, and for the operationalisation of containerised cargo, agricultural cargo and specialised cargo terminal by the end of 2023,” CGX related.
It was in 2010 that the company first made its intention of constructing such a facility known. And although it experienced setbacks over the past few years, CGX’s decision to forge ahead with the BDWP was motivated by an independent market assessment conducted by Maritime & Transport Business Solutions (MTBS) of Rotterdam, in the Netherlands.
According to the MTBS, the BDWP is expected to service the demands of one offshore well in 2022 following start-up, growing to 7-12 offshore wells a year, beginning in 2023.
“The MTBS report predicts revenue generation from 2022 related to offshore oil- and-gas services reaching approximately US$37 million by 2025, and steadily increasing thereafter. The life-cycle of a producing field requires support, consumable supplies, equipment and services.
“The BDWP’s containerised, specialised and agricultural cargo operations are targeted to be fully operational by the end of 2023. The MTBS marketing report predicts that by 2030, the port will handle over 835,000 tonnes of cargo, with 64 per cent of this related to the export of rice,” CGX related.
With approximately 30–50 per cent of Guyana’s rice being produced in regions Five (Mahaica-Berbice) and Six (East Berbice-Corentyne), the BDWP, CGX reasoned, will provide important support to this industry, and service its expected growth.
Specific to cargo handling operations of the port, the MTBS report predicts revenue generation to reach approximately US$28 million by 2025, with steady growth predicted to reach approximately US$37 million by 2030.
The company also commissioned MTBS to prepare a financial model for the BDWP, with inputs from GCIE, as well as other advisers and consultants such as Aqua and Terra Consultores Asociados S.A.S, and SRKN’gineering and Associates Ltd.
The financial model predicts that the payback year for the project is 2025, with an above-industry average net present value and internal rate of return values.
Considering its potential, the company believes that this project is transformative, especially for local content in the oil-and-gas sector, and for the transformation of the country’s agricultural and commercial sectors.
Co-Chairman of CGX, Gabriel de Alba was quoted by the company as saying: “We are pleased to continue to advance our activities in what we believe is one of the world’s most important new oil-and-gas blocks in the last decade. The CGX team has worked tirelessly to reach this point, in coordination with all our stakeholders. We look forward to providing further details as soon as possible.”
Further, Co-Chairman of CGX, Professor Suresh Narine said: “I am incredibly proud of our team as we reach such an important exploration milestone for our organisation. I am equally proud of the progress we have made in the development of the Berbice port, which reflects the focus we have on the broader opportunities for the people and businesses of Guyana.”