CGX Energy Inc V.OYL

CGX fast tracks Berbice deep-water port

[Devanand1]

Kaieteur News – Unable to meet all of the shore base demands of the Liza Phase One Project, Guyana has been losing billions of dollars in business to its CARICOM sister, Trinidad and Tobago. With several other development projects underway, namely the Liza Phase Two and the Payara in the oil rich-Stabroek Block, Guyanese businesses have been urged to step up to the proverbial plate and establish world-class shore base facilities that would essentially increase the use of more Guyanese services and skills.In seeking to answer this very call; CGX Energy Inc. recently noted that it is fast tracking its port construction project on the eastern bank of the Berbice River at Crab Island.
The company indicated that the port is being constructed by its wholly owned subsidiary, Grand Canal Industrial Estates Inc. It said that work, which resumed in October of 2020, is on schedule for a full opening of oil and gas support services for offshore production and exploration projects in early 2022. Agricultural and general cargo full service operations are being slated for full opening in 2023.CGX, it should be recalled, was an early investor in the Berbice deep-water port project since 2010. In fact, the company was one of the early oil and gas exploration pioneers in the Guyana basin and invested in the port project in the hopes of commercial discoveries of oil. Since 2010, CGX invested approximately US$10 Million in the project, which then went through a hiatus until interest was renewed in the project after the string of commercial discoveries on the Stabroek Block starting in 2015.
The Company’s Vice President of Operations, Michael Stockinger, shared that rather than construct the port in phases, as had been contemplated before, given the acute shortage of deep water port services in Guyana, and the opportunity such facilities bring to engage local content, the company agreed with the Irfaan Ali government in late 2020 to construct the entire facility as one single project. Investment in the range of US$130 Million is targeted for the port and the company expects that some 1,000 direct jobs will be created during the construction phase with 300 persons employed when the Port is fully operational.
With the recent consecutive commercial discoveries on Block 58 in Suriname and the exponential increase in drilling offshore Suriname, coupled with the ongoing exploration and production activities on the Stabroek Block offshore Guyana and explorations wells to be drilled by CGX and others in 2021, the demand for ports servicing these operations have grown almost exponentially. Currently, more than 75% of the port business servicing offshore oil and gas operations in Guyana and Suriname are provided by Trinidadian ports.However there are cost, fuel and carbon footprint concerns for companies operating in Guyana and Suriname as the sailing time to Trinidad ports to the fields offshore Guyana and Suriname require approximately 48 hours of sailing one way, as opposed to between 12 and 14 hours from the Berbice river location for the CGX Port.
This means that significantly more fuel is consumed for services from Trinidad based ports, leading to increased carbon emissions and escalation of costs related to fuel consumption, equipment rental, wear and tear and complicated logistics. Importantly, this presents an opportunity not only for CGX, but also for Guyanese seeking to capitalize on the emerging jobs in the oil and gas industry.
For Berbice, Stockinger said that the port would be a game changer and one of the more elegant solutions to the acute employment crisis created when the sugar estates were closed. Even as the sugar estates are in the process of re-opening, unemployment in the Ancient County is still very high. Given that CGX has indicated that the port will also service the agricultural sector, it is expected that the Port will also boost the competitiveness of sugar and rice grown in regions five and six, as these commodities incur an approximately 20% additional cost to be transported to Port Georgetown for shipping.
This in turn should see an upswing in the amount of Berbicians engaged in agriculture and agro-processing. With the expected increase in personnel servicing the offshore operations coming through the port, hospitality services and other businesses in New Amsterdam, which has been depressed for some time, are expected to see a significant boost in demand.
Recently, the head of Suriname’s national oil company, Staatsolie, highlighted the need for a deepwater port facility to service both countries offshore exploration and production activities. CGX’s facility is well placed to offer services to companies in the oil and gas sector from both countries. Mr. Stockinger also indicated that the Company was very excited about the potential increase in commodity goods coming through Guyana to the Port from Brazil, and also Suriname, as linkages to those countries being worked on are realized in the next few years: the proposed bridge over the Corentyne River and the proposed road to the State of Roraima in Brazil.
With the CGX Grand Canal Industrial Estates Berbice Deep Water Port back on track, Berbicians are set to take advantage of what is likely to place Berbice at the focal point of a Guyana-Suriname Energy and Commerce Corridor.