Gas-to-Energy Project cost dispute: Govt & US contractor to decide whether to proceed to arbitration

…given 28 days by Dispute Avoidance Board to decide next step

With a ruling having been issued by the Dispute Avoidance and Adjudication Board (DAAB) on the Gas-to-Energy (GtE) dispute between the Government of Guyana (GoG) and Lindsayca/CH4, the Government now has 28 days to decide on whether to go forward with arbitration.
According to a statement from the Office of the President, the DAAB issued its ruling on January 31, 2025. While it did not say what the ruling was, citing confidentiality, it was explained that both parties now have 28 days to decide on their next course of action, namely whether they wished to refer any of the decisions to arbitration.
“It would be recalled that certain aspects of the project were executed on the GoG’s behalf by ExxonMobil. The GoG will, therefore, in the next few weeks, in consultation with its partners, including ExxonMobil, as well as relevant legal and technical advisors, determine the best course forward for GoG,” the Office of the President said.
“The GoG’s priority continues to be to ensure that the project is completed in the shortest possible time and in keeping with contractual specifications, with a view to bringing the power plant and the NGL [Natural Gas Liquids] plant into operation and delivering the associated benefits to the Guyanese people as soon as possible.”

The Office of the President reminded that when completed, the project’s benefits would include a doubling of the country’s electricity generating capacity to keep pace with the growing demand and the slashing of electricity prices paid by consumers, by 50 per cent.
“This will, in turn, catalyse rapid expansion in industrial activity, and immediately improve the competitiveness of the manufacturing sector and all other productive sectors that are energy intensive, bringing vast employment and entrepreneurial opportunities for Guyanese nationals.
“Additionally, the completion of the project will facilitate other benefits such as a reduction in the cost of LPG cooking gas to households and businesses, and the realisation of domestic self-sufficiency with significant surplus for the export market,” the Government further explained.
As such, the Office of the President explained that the project would not only generate significant foreign currency savings for Guyana as a result of reduced imports, but also generate additional export revenue. This will in turn bring with it macroeconomic benefits like a stronger balance-of-payment position and help grow the economy.
The Joint Venture formed by United States-based companies Lindsayca and CH4 was awarded the US$759 million contract in November 2022 to build the 300-megawatt (MW) Combined Cycle Power Plant and a NGL facility at Wales, West Bank Demerara (WBD) – key components of the GtE Project.
However, there was a three-month delay in various components of the project that would affect LNDCH4-Guyana’s delivery of the power plant in accordance with the contractual timelines. While the Government had extended the deadline by three months, the contractor was not satisfied and wanted more time.
This resulted in LNDCH4-Guyana making financial claims to the tune of US$50 million, stating that the delays would cost the company millions in liquidated damages. The Guyana Government has already rejected this financial claim thus resulting in the contractor activating a dispute resolution mechanism.
As a result, a DAAB was set up to settle the matter between the two sides. Meanwhile, there is another claim related to soil quality which the contractor is seeking compensation for.
During a recent tour, LNDCH4 Guyana General Manager (GM) Humberto Lopez told reporters that when they received the prepared construction site, it was not to the specified stabilisation requirement and they had to undertake additional work.
As such, he had revealed that they were looking for financial compensation for the additional works that had to be done to stabilise the project site. However, last year Vice President Bharrat Jagdeo had confirmed that while there was a claim relating to the soil condition, those claims would have to go through a technical process to determine whether they were justified or not.
The People’s Progressive Party/Civic (PPP/C) Administration’s flagship GtE initiative is divided into five components: the pipeline from offshore production activities to Wales, the building of the power plant and NGL facilities, the transmission main to move power generated at the power plant, a new control centre at Eccles, East Bank Demerara (EBD) and upgrading the national power grid.
While LNDCH4-Guyana was given the contract to build the two plants, the procurement and installation of the 225-kilometre gas pipeline from the Wales project site to the offshore oil field is being executed by US oil major ExxonMobil, which is carrying out production activities in the Stabroek Block. (G3)