Guyana’s Ambitious Gas Project Faces Uncertainty
As Guyana seeks to capitalize on its vast natural gas reserves, doubts are mounting over the country’s decision to partner with a relatively unknown U.S. startup, Fulcrum LNG. The project, valued at up to $30 billion, is facing significant financing hurdles, casting uncertainty over its viability.
A Risky Bet on Fulcrum LNG
Fulcrum LNG, founded just a year ago, was chosen in June to develop Guyana’s gas infrastructure. However, the company has yet to secure financial backing, raising concerns about its ability to deliver on the project. Government officials are now tempering their earlier enthusiasm, describing the selection as “tentative.”
Exxon Mobil Looms Large
Meanwhile, Exxon Mobil, the dominant player in Guyana’s oil industry, is waiting in the wings. The company has so far focused on oil production, but its involvement in the gas sector could be crucial to the project’s success. Guyana’s Vice President Bharrat Jagdeo has hinted that an agreement with Exxon Mobil may be forthcoming next year.
Fulcrum’s Credibility Questioned
Critics argue that Fulcrum LNG lacks the necessary experience and financial muscle to undertake a project of this magnitude. Ira Joseph, an LNG market expert, believes it would be “very difficult” for a startup to raise the required financing. The company’s proposal relies on partnerships with U.S. oil service Baker Hughes and construction contractor McDermott, as well as financing from the U.S. Export-Import Bank and private equity firms.
Government’s Change of Heart
Guyanese officials initially praised Fulcrum LNG’s “comprehensive and technically sound proposal,” but now acknowledge that they may have underestimated the challenges facing the startup. Minister of Natural Resources Vickram Bharrat has expressed confidence in Fulcrum’s CEO, Jesus Bronchalo, citing his experience at Exxon Mobil. However, the government’s decision to proceed without securing financing commitments has raised eyebrows.
Collaboration or Conflict with Exxon Mobil?
Exxon Mobil’s consortium has discovered vast oil reserves off Guyana’s coast, but its plans for the gas sector remain unclear. The company has hinted at developing a small gas-to-power project, but Guyana wants more. The government is pushing for Exxon Mobil to work with Fulcrum LNG or risk losing control of the offshore land.
As the situation unfolds, one thing is clear: Guyana’s gas project is at a crossroads. Will Fulcrum LNG rise to the challenge, or will Exxon Mobil ultimately take the reins? Only time will tell.
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