Guyana and Suriname, two small Caribbean nations on South America’s northern coast, are preparing to play a significant role in the global natural gas market. This comes at a pivotal time when natural gas is increasingly viewed as a key “bridge fuel” to replace coal in global energy strategies. As nations push to meet climate goals, natural gas is seen as an affordable and abundant option to reduce carbon emissions.
Global demand for liquefied natural gas (LNG) is expected to surge by over 50% by 2040, primarily driven by a shift from coal to natural gas in industrial sectors across China, India, and other countries in South and Southeast Asia. This shift is essential to support these nations’ economic growth.
In 2023, the global LNG trade reached 404 million tonnes, up from 397 million tonnes the previous year. According to Shell Energy, LNG demand is projected to grow to around 625-685 million tonnes annually by 2040.
A new report from Wood Mackenzie, titled “Can Guyana and Suriname LNG compete against new global supply?” suggests that Guyana and Suriname could supply up to 12 million metric tonnes per year (mmtpa) of LNG within the next decade. The Guyana-Suriname basin is believed to hold approximately 13 trillion cubic feet (tcf) of natural gas, mostly located in Guyana’s Haimara cluster and Suriname’s Block 52. These LNG projects are expected to be economically viable, with breakeven prices estimated at US$6 per million British thermal units (mmbtu), excluding shipping and regasification costs. However, uncertainties remain as commercial structures and fiscal terms are yet to be finalized.
Experts anticipate that Suriname’s LNG projects will advance faster than Guyana’s, with production potentially starting as early as 2031. Guyana’s rise as an energy powerhouse began in 2015 when ExxonMobil discovered significant oil reserves off its coast. Since oil production started in 2019, Guyana’s economy has tripled in size, and the government has distributed historic payouts to citizens. Natural gas may now provide the next economic boon for both Guyana and Suriname.
“Guyana and Suriname are entering the market at a key moment,” said Amanda Bandeira, a research analyst at Wood Mackenzie. “The dominance of U.S. and Qatari LNG is growing, but there is an opportunity in the mid-2030s, partly due to the U.S. government’s pause on new LNG export approvals.”
Bandeira refers to the Biden administration’s January 26 announcement, which indefinitely paused new LNG export licenses for review. The U.S. Department of Energy is assessing the potential impacts of the nation’s expanding LNG exports on energy security, inflation, and the environment.
In this context, Guyana and Suriname could offer a new, cost-competitive LNG supply, especially for regional markets. Their proximity to the Caribbean and South America gives them an advantage over other suppliers, particularly those that must navigate the Panama Canal, which has been affected by droughts recently.
Overall, Guyana and Suriname’s timely entry and strategic location make them well-positioned to meet growing global LNG demand, particularly in Asia, Europe, and Africa.
Related Topics:
- 12 Best LNG Companies to Invest in for 2024
- How LNG is Transported on Land: A Detailed Overview
- How Is LNG Transported by Ship?