April 2024, Vol. 251, No. 4


Offshore Developments: Exxon's Guyana Gas Plans, LNG Capacity Boost, and More

Exxon Considers Guyana Gas Production Post-2029 

(P&GJ) — A consortium, led by Exxon, is studying the potential for offshore natural gas production in Guyana, near that nation’s maritime border with Suriname, an executive with the oil and gas group said.

INEOS Forties Pipeline System (FPS) is using a recently acquired Liebherr RL 650 crane for all materials handling on the Unity Platform, located in 400 feet (122 meters) of water in the North Sea, off the coast of the United Kingdom.

“By early 2025 we will have done the exploration and appraisal work to understand how comfortable we are on the resource,” Exxon’s Guyana manager Alistair Routledge told Reuters. 

Exxon, Hess Corp. and CNOOC have been increasingly pushed by Guyana to develop the country’s untapped resources. The consortium is unlikely to be able to produce gas in the field earlier than 2029. 

The consortium has not decided if the project in Guyana would focus on oil or natural gas discoveries in the massive Stabroek block. However, Guyana has specified it has been in talks with “another international company,” concerning the development of gas as an alternative. 

Exxon will evaluate an LNG facility or piping the gas discovery to an onshore processing plant, Routledge told Reuters, adding that, “you might actually need more gas onshore for an LNG facility” than would be available with a floating facility. 

Trinidad and Tobago, which have an underutilized LNG export facility, said it would be interested in jointly developing Guyana’s natural gas. 

OLT Offshore LNG Increases Regasification Capacity 

Italian gas supplier OLT Offshore LNG Toscana will be able to bump up annual regasification capacity from 3.75 Bcf/a to 5 Bcf/a, following an agreement with the government. 

The increase in regasification capacity at the FSRU Toscana Terminal is part of the broader national strategy related to the European energy emergency in 2022, and it is also in line with what is enshrined in the REPowerEU. 

The capacity increase does not involve plant modifications, but rather, it will result in greater use of the existing plant, with increased quantities of LNG discharged and regasified. 

The additional regasification capacity will be available starting next year. The specifics of the allocation have not been announced. The required upgrades have already been completed. 

As specified, the agreement also authorizes the increase of up to 122 small-scale LNG carriers per year for LNG service. 

The new service allows small LNG carriers to load directly at the FSRU Toscana Terminal, in order to refuel LNG ships or to deliver to coastal deposits within Mediterranean ports. 

Venezuela Close to Approving License with Trinidad, Shell 

Venezuela is expected to soon approve a license for Shell, and the National Gas Company of Trinidad and Tobago is expected to develop an offshore natural gas field. 

Venezuela, which holds Latin America’s biggest gas reserves, and neighboring Trinidad, the region’s largest LNG exporter, would complement each other’s needs to produce and export gas, analysts said. 

The two nations are in talks to develop a 25-year exploration and production licensing agreement for the Dragon field, which holds up to 4.2 Tcf of gas. The field lies in Venezuelan waters, near the maritime border. 

Shell would operate the project with a 70% stake, and Trinidad’s NGC would hold the remaining 30% under proposed terms, according to Reuters. 

Venezuela’s state-run oil firm PDVSA, which discovered the reserves, would not have a stake in the project. However, Venezuela would receive either cash or a portion of gas production as royalties. 

The United States recently eased sanctions on Venezuela on a temporary basis and amended the authorization for Dragon, allowing Caracas to receive proceeds from gas sales. 

The proposed license would allow an initial volume of 300 MMcf/d of Venezuelan gas to go to Trinidad for LNG production, starting in late 2026, and an additional 50 MMcf/d to go to petrochemical plants, Reuters’ sources said. 

The region of Trinidad and Tobago has the capacity to process 4.2 Bcf/d into LNG, petrochemicals and power, but its current gas production is about 2.7 Bcf/d. 

New Fortress Looks at Onshore Complement to Offshore Project 

New Fortress Energy said it is considering building an LNG export facility in Mexico to serve as an onshore complement to its offshore project. 

The disclosure came as a response to an Oct. 30 letter from the U.S. Department of Energy advising the company that an existing gas-export permit does not allow for an onshore facility. 

The company’s Fast LNG 1 project, housed on converted oil platforms off the coast of Altamira, Mexico, will be Mexico’s first producing and exporting LNG facility when it starts. 

New Fortress said the facility can produce up to 1.4 mtpa. 

“The onshore project is still in the preliminary stages of development,” an attorney for New Fortress replied to the DOE. “This prospective onshore LNG export project would be in addition to the offshore project.” 

In its 2022 application for U.S. export approvals, New Fortress described FLNG 2 as an offshore gas liquefaction facility that would be installed on separated oil platforms, in Gulf of Mexico waters near FLNG 1. 

Indigenous Group Files to Halt Santos’ Offshore Pipeline in Australia 

Australia is reviewing an emergency application by an indigenous group that wants to block construction of a pipeline associated with on Santos’ $3.6-billion Barossa gas project off the coast northern Australia. 

The group cites a potential threat to its culture heritage that might result from the project, which included a risk to its aboriginal art, sacred ancestral sites and ancient burial grounds. 

Santos, which is planning to start producing gas from Barossa in the first half of 2025, pointed to the findings from an independent expert, stating that there are no specific underwater cultural heritage sites along the planned route of the pipeline. 

The company plans to begin construction soon, provided its earlier permitting remains in place. However, the indigenous group’s challenge provides a further threat to Santos’ project, after an offshore regulator ordered the company to evaluate the risks before starting work on the pipeline. 

Sulmara Refitting Offshore Vessel to Suit Renewables Contract 

Subsea specialist Sulmara made its biggest commitment yet to the renewable energy industry after signing a three-year deal with Atlantic Offshore to charter the 67m DPII multi-purpose support vessel Ocean Marlin.  

Sulmara is undertaking a substantial refit of the vessel, including the installation of class-leading survey equipment, a subsea crane with active heave compensation, and the creation of extra bed space. 

CEO Kevin McBarron said the decision to go down the unconventional yet pragmatic route of repurposing an emergency response rescue vessel (ERRV) aligns with Sulmara’s ambitions to deliver work for clients that has as little an impact on the environment as possible.  

“USVs are not the answer to all of our clients’ needs and there is still a place for conventional ships,” McBarron said.  “We had opportunities to charter older, less efficient vessels, but for our first long-term charter vessel, that does not align with our company vision, and we wanted to make the right choice.” 

He said the company will be tracking the efficiency of the vessel throughout 2024, comparing emissions and fuel burn to existing assets.  

Built in 2014, the Ocean Marlin is 2298GT, with deck space for a range of mobilized equipment and personnel. Activity on the vessel is likely to begin in the first quarter, with initial operations taking place on projects across Europe. 

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