–to facilitate projects that enhance, capitalise Guyana gas resources

AS Guyana’s oil and gas sector continues to boom, the government is taking the necessary steps to encourage investments for gas infrastructure projects, according to the draft Gas Monetisation Strategy.

The Ministry of Natural Resources (MNR), late last month, announced the initiation of a public consultation for the strategy, as promised by President, Dr. Irfaan Ali.
This strategy is part of a pivotal roadmap for managing the nation’s significant gas resources. It also serves as a vital tool for Guyana to make informed decisions regarding the utilisation of its gas resources.

The Stabroek Block, along with the Corentyne Block, holds substantial gas resources. Ongoing exploration and appraisal activities are underway to determine the full extent of Guyana’s gas resources. To date, the sanctioned projects in the Stabroek Block are exclusively oil-focused, including the Whiptail project currently under review.
At Pluma, Haimara, and other discoveries with condensate, reviews are ongoing.

“[The Government of Guyana] will seek to attract private funding for the timely and cost-effective development of its gas infrastructure to avoid the large upfront capital required to develop…” the draft Gas Monetisation Strategy read.

It was further stated that key elements such as: the creation of policies, the establishment of legal and fiscal frameworks governing gas, and the oversight of governmental bodies and private sector partners, in order to ensure that all stakeholders adhere to the rules, constitute the government’s role in promoting investment in gas infrastructure projects.
In addition, the strategy outlined several fundamental components that function as clear, transparent and consistent policies and guidelines to notify partipating stakeholders of their mutual obligations.

The document gave the recommendation to commercialise supply through market forces. Enabling and safeguarding commercial structures that allow for alignment along the value chain, secure offtake with long-term, back-to-back bilateral contracts with creditworthy parties that share obligations and liabilities, and/or the use of integrated business models throughout the value chain are ways to achieve this.

It was also stated that with nondiscriminatory regulations, both domestic and foreign businesses would invest in gas infrastructure.
In order to guarantee competitive pricing levels and affordability for domestic users, there must also be an appropriate cost supply of upstream gas. Achieving the construction of gas infrastructure at rates of return that are acceptable to all stakeholders is contingent upon this.

The document further suggested that available gas resources be balanced in accordance with the parties’ contractual responsibilities as well as the demand in local, regional, and global markets.
Guyana is notable for having a thorough Private Sector Commission (PSC) and Petroleum Act that specify the guidelines for upstream gas developments and certain related infrastructure as part of production operations.

It was suggested that in order to guarantee prompt development and alternative investment requirements for private investors outside of the PSC framework, the government ought to provide incentives for other participants throughout the gas value chain.
This was suggested in order to achieve improved PSC Cost Bank management and expected revenues through the marketing and classification of infrastructure projects that are comparable to industrial developments.

Gas-To-Energy Project
Notably, Guyana’s gas-to-energy project involves the development and utilisation of natural-gas resources for domestic power generation as well as other industrial and commercial uses.
The project is part of Guyana’s efforts to tap into its significant offshore natural gas reserves and maximise the benefits for the country and its people.

The project is anticipated to attract significant foreign investment in Guyana, which will help drive economic growth and create new opportunities for all Guyanese. Some $43.4 billion has been allocated in this year’s budget for advancement of the gas-to-energy project.

The project is also expected to provide a reliable and cost-effective source of energy for Guyana, reducing the country’s dependence on imported fuels and contributing to economic growth.
The energy project also has the potential to create new jobs and opportunities for the people of Guyana, particularly in the energy sector. Additionally, the use of natural gas for power generation is expected to help reduce Guyana’s carbon footprint, contributing to a cleaner environment and helping to mitigate the impacts of climate change.

Overall, the gas-to-energy project has the potential to bring significant benefits to the country and its people, helping to drive economic growth, improve energy security, and enhance the quality of life for the citizens of Guyana.

“To access the Guyana Gas Monetisation Strategy, please visit the ministry’s official website at https://petroleum.gov.gy/. The deadline for public consultation is November 14, 2023.