GEORGETOWN, Guyana, CMC – The general secretary of the People’s Progressive Party (PPP), Dr. Bharrat Jagged, says the country’s transformative Gas to Energy (GTE) project is encountering some delays due to ongoing arbitration processes and equipment delivery challenges.
The approximately GUY$2 billion projects aim to harness the nation’s natural gas resources to advance sustainable economic development.
Earlier this year, a ruling was issued between the Government of Guyana and the Gas-to-Energy contractor Lindsayca/CH4.
The ruling confirmed that the dispute between the two parties must remain confidential, and both parties have 28 days to decide whether to take the matter to arbitration.
The government moved to arbitration because the contracted company, LNDC4, claims it is owed $50 million for commencing the project late.
“We’re making that decision [on] whether we go to full arbitration, which will be made shortly because it has to be made before the end of this month. [And] if we go on to arbitration, we’ll inform the public or if we decide to accept the report,” Jagdeo stated on Thursday.
He informed reporters that while the financial implications of the delay are not yet determined, the government is cautiously working to minimize these impacts while ensuring its realization.
“Given the economic boom occurring across multiple sectors, the government is investing in this massive facility to reduce electricity costs by 50 percent that will attract foreign investments, and two, to complement the power demand.”
“We’re planning full steam for the project…It might be with a delay, but it is happening. It is happening [and] I am pleased about that,” he underscored.
Meanwhile, the government has shortlisted and started negotiations with Siemens Energy, the German company that could operate and manage the power plant component of the GTE project in Wales, Region Three.
He highlighted this approach, which aims to leverage Siemens’ expertise in this field, ensuring reliable performance and reducing operational challenges.
“We are now negotiating with them because we want them to, if we conclude a contract, they will run the power plant for 10 years or so. We don’t want to have the headache of operating and maintaining the plant. You can get the company that produced the turbine actually to do it. And they’re a big global company,” Jagdeo explained.
Meanwhile, the government is seeking potential firms to manage the natural gas liquid (NGL) facility, which will be responsible for processing and distributing by-products such as cooking gas, fertilizer, and other natural products.
This single most significant investment comprises the construction of a pipeline, power plant, natural gas liquids facility, and upgrades to the power distribution network.
US-based CH4 Lindsayca is building the integrated facility in Wales for US$759 million, while Kalpataru Projects International Limited is establishing the transmission lines and substation needed to deliver electricity.
ExxonMobil Guyana has completed the construction of a pipeline that will transport natural gas from the offshore Stabroek Block’s Liza oilfield to the integrated gas processing facility in Wales.
Earlier this year, Guyana and the United States Export-Import (EXIM) Bank signed a US$527 million loan to support the GTE project’s development further.
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