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Guyana’s attempts to use its natural gas resources to fuel a power plant that would reduce the country’s energy costs are hampered by construction delays and cost overruns, while threatening to reduce oil revenues by about $1 billion, he said. Reuters reported on Monday.
The first phase of a 300 MW power plant is reportedly six months behind schedule, with full operation expected no earlier than the fourth quarter of 2025.
Exxon Mobile (NYSE:XOM), which handles all oil and gas production in Guyana, is building a roughly $1 billion, 140-mile pipeline from its offshore Stabroek block to supply the onshore government project, and the company’s portion of the project will be ready by the end of the year as promised to Guyana, Exxon Guyana country manager Alistair Routledge told Reuters.
Completion of the pipeline will require Exxon (XOM) to suspend production during the third quarter of two oil production vessels to connect them to the undersea pipeline, Routledge said.
If the link lasted four weeks, Exxon (XOM) and consortium partners Hess (HES) and Cnooc (OTCPK:CEOHF) would need to halt production of 12 million barrels of oil from two platforms producing 400,000 bbl/day at peak levels, Routledge said, that could mean more than $1 billion in deferred oil revenue.
The executive said pipeline connection and maintenance work will take “weeks, not months,” and Exxon (XOM) is not worried about having to shut down production this year for a project that won’t be ready to accept gas until at least a few years ago. 2025.