Massive Gas Project in Guyana: Fulcrum LNG Leads with High-Stakes Partnerships

Fulcrum LNG's upcoming natural gas project in Guyana, valued at $10-$15 billion, includes U.S. partners Baker Hughes and McDermott. Led by former Exxon executive Jesus Bronchalo, this project aims to develop Guyana's extensive offshore gas reserves with financing support from multiple U.S. entities, including the U.S. Export-Import Bank.

A proposed large natural gas project in Guyana by U.S. energy developer Fulcrum LNG includes partnerships with U.S. oil service company Baker Hughes and engineering firm McDermott, the country's vice president said on Thursday.

Guyana's President Irfaan Ali last week said Fulcrum LNG had been chosen from among 17 companies to help Guyana develop a plan to design, finance, construct and operate gas processing facilities. The project will involve between $10 billion and $15 billion in investment. Fulcrum LNG is expected to work with a consortium led by Exxon Mobil, which controls all crude and gas production in the country, and the government on the project.

Guyana has been pressing the Exxon-led group to come up with a plan to develop the country's offshore gas reserves or relinquish areas where gas has been discovered so they can be developed by others. The South American country is estimated to have some 16 trillion cubic feet of gas off its coast, according to the U.S. Energy Information Administration.

Besides pairing with U.S. oil service and engineering firms, Fulcrum LNG's proposal would include financing from the U.S. Export-Import Bank and the participation of private equity firms and an environmental partner, Vice President Bharrat Jagdeo told a media briefing. Fulcrum LNG is led by a former Exxon top executive in Guyana, Jesus Bronchalo. The executive had resigned from Exxon by the time Fulcrum LNG's proposal was submitted, Jagdeo added.

"We don't have a conflict of interest," Jagdeo said. "Now, if he has a conflict of interest with Exxon, that's a different matter." An oil consortium by Toronto-listed producer Frontera Energy and its affiliate CGX Energy "will not play the government of Guyana" and must specifically show how they intend to develop their offshore oil project and what financial support they have, the vice president also said.

The group, which is looking for a new partner to develop the Corentyne block, recently submitted a notice of potential commercial interest for their latest oil discovery, a step needed to apply for extra time to appraise it and evaluate its viability. "I have not examined it (the notice) as yet, but we'll do so, and next week it will go to the Cabinet... For a very long time, they have been jerking people's string," Jagdeo said.

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