KEY POINTS
- Guyana and Suriname’s LNG projects capitalize on high demand.
- A U.S. export license pause opens LNG opportunities.
- New LNG exports may begin in Suriname by 2031.
Within the next ten years, Guyana and Suriname might export up to 12 million metric tonnes of LNG annually, making them major players in the worldwide LNG market. The Biden administration’s halt on new U.S. LNG export licenses may hasten their entry.
Guyana, Suriname offer cost-effective LNG supply
Both nations, which are on the Caribbean coast of South America, provide a reasonably priced supply of LNG because of their wealth of natural resources and advantageous location for transportation to important markets in the Americas, Europe, and Asia.
“Can Guyana and Suriname LNG Compete Against New Global Supply?” is the headline of a recent Wood Mackenzie report. estimates that by 2034, these countries might generate up to 12 million metric tonnes of LNG per year (mmtpa), with an estimated 13 trillion cubic feet (tcf) of natural gas stored in the Guyana-Suriname basin. The Haimara cluster in Guyana and Block 52 in Suriname contain the majority of these reserves.
According to Wood Mackenzie’s study, these LNG projects, excluding shipping and regasification, would cost about $6 per million British thermal units (mmbtu) to break even. Compared to Guyana, Suriname is predicted to see faster project development, with beginning LNG production starting as early as 2031.
Demand for natural gas continues to soar globally
Oilprice stated that the introduction of Guyana and Suriname into the LNG market is in line with the growing demand worldwide. The switch from coal to natural gas in nations like China and India is expected to propel a more than 50% increase in LNG use by 2040. According to Shell Energy, the global LNG trade increased from 397 million metric tonnes in 2022 to 404 million metric tonnes in 2023. By 2040, the demand is expected to reach between 625–685 million metric tonnes annually.
Amanda Bandeira, a Latin American Upstream Oil and Gas analyst at Wood Mackenzie, stated that projects in Guyana and Suriname are solidifying at an intriguing moment. Guyana and Suriname offer a fresh, affordable supply option as the dominance of the US and Qatar in LNG continues to expand. Additionally, they are ideally situated to meet regional demand in the Caribbean and South America as well as Southeast Asia.
In January 2024, the Biden administration announced a halt to new LNG export licenses due to worries about possible effects on inflation, environmental conditions, and U.S. energy security. Guyana and Suriname, which are strategically positioned to ship economically without depending on routes like the Panama Canal, which is increasingly hampered by drought, could benefit from this hiatus, according to Bandeira.
