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Guyana says it might jointly develop gas fields with

Suriname

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Fulcrum LNG has capacity to develop large gas project, VP

says

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Onshore power project faces delay of about three months

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Government sees others developing gas if Exxon does not

By Marianna Parraga and Kemol King

GEORGETOWN, Feb 24 (Reuters) - Guyana's government

expects a consortium led by U.S. oil major Exxon Mobil ( XOM )

to brief officials by the end of March on plans to develop

offshore gas, the country's vice president told Reuters.

"They said: 'by end March, we will tell you what we will

do.' And that's what we're waiting (for)," Vice President

Bharrat Jagdeo said in an interview on the sidelines of Guyana's

Energy Conference in Georgetown.

Guyana is the fastest-growing economy in the world thanks to

rapid expansion of output from offshore oilfields controlled by

the Exxon-led consortium, in which Hess and CNOOC

also participate.

"Clearly for us, there shall be a project. We have to

monetize the gas, and if Exxon doesn't want to do it, we already

said to them... we have a lot of people who are interested in

doing this on their own," Jagdeo added.

The government, which wants to use natural gas to drive

growth in the domestic economy, has progressed to award

contracts for power and petrochemical projects that will receive

gas supplies. It is also exploring options to develop liquefied

natural gas facilities to export the fuel.

The government says there is enough gas at Exxon's massive

Stabroek block for commercial development, while Exxon says it

has yet to complete its assessment of the gas resources in the

area.

Exxon last week announced the "Wales Gas Vision", which

outlined what could be done with the offshore gas the consortium

is planning to produce, if its assessment shows commercial

development is viable.

Exxon did not immediately reply to a request for comment.

One of the possibilities could be to jointly develop some

gas fields with neighbor Suriname, where offshore reserves have

also been discovered, Jagdeo said.

Guyana, which will be entitled to about 50% of gas produced

at Stabroek after the Exxon group takes some of the output to

recover expenses, last year chose little-known U.S. company

Fulcrum LNG as its preferred partner for a project to process

and export the gas.

The startup, which the government expects to partner with

the Exxon consortium for that development, has since faced

questions over its capacity to execute a project that could need

as much as $30 billion.

Jagdeo acknowledged external concerns about Fulcrum LNG's

capacity, but said the government believes the company's team

has the potential.

"They (Fulcrum LNG) demonstrated to our team that they had

substantive backing, both to take the gas... and also for equity

investment and raising the capital. So we are hoping that we

could continue the tripartite discussion to make this work,

Exxon, Fulcrum and the government of Guyana," he said.

GAS TO SHORE

The Exxon group reinjects the gas it produces into the

oilfields already in operation to maintain pressure at the

reservoir. The consortium expects to send a small volume of gas

back to shore for power generation as soon as this year,

depending on when the power plant is ready.

Last year, it completed a $1 billion pipeline from the

fields.

The bulk of future gas supply is expected to come from the

Pluma and Haimara projects, rich in gas resources and seen

starting output after 2030.

The power project, to be built by a consortium between

Texas-based Lindsayca and Puerto Rico-based CH4 Systems, faces

problems after a three-month delay to hand over the site. The

parties could go to arbitration over the delay, but the project

will be completed, Jagdeo said.

A separate plan to build a fertilizer plant also connected

to Exxon's pipeline could be offered this year through a tender

for companies interested, Jagdeo said.

Guyana is also trying to clear a standoff with Canada-based

firms Frontera Energy ( FECCF ) and CGX Energy ( CGXEF ) over the

expiration of an exploration license for a key offshore block

where oil reserves were found. The dispute could also end up in

arbitration after the government notified Frontera and CGX that

it had canceled the license.