Gas-to-Energy Project: ExxonMobil not responsible for contractor’s delays – Routledge on arbitration case

…2-month shutdown of production to connect pipelines

Oil giant ExxonMobil has made it clear that they were not responsible for the delays that Gas-to-Energy contractor Lindsayca CH4 cited to justify taking the government to arbitration in an effort to claim back over US$90 Million in cost overruns.
Contractor Lindsayca CH4 and the government have been at loggerheads over delays on the gas to energy project the contractor believes it should be compensated for. They have claimed that the delayed handover of ExxonMobil’s portion of the project, caused cost overruns… for which they are seeking over US$90 Million in compensation.

But during a press conference on Tuesday, ExxonMobil Guyana’s President Alistair Routledge was adamant that Exxon fulfilled its end of the bargain. He noted that any delays on Exxon’s end were minimal and did not hinder Lindsayca’s ability to do its work.
“What we call the early enabling works, it was very apparent. For any of these projects, it’s a multi-year effort to implement these kind of major infrastructure projects. And so, in the early days of working out who would execute which portions of work, it was agreed that ExxonMobil on behalf of Stabroek would execute the early enabling work.”
“So, clearing those hundred acres of site at Wales, where the plant would be constructed, clearing the ground to bring in the sand in order to stabilise the ground for construction. Building a heavy haul road. Material offloading facility. Improving the access road on the west bank. So, you can drive now all the way down from the river crossing.”

According to Routledge, it was agreed that Exxon would complete those works so that Lindsayca wouldn’t have to. But something went wrong. And according to Routledge, Lindsayca was still delayed despite not having to complete these early works.
He admitted that while there were some delays when it comes to sand barges and other equipment, those were minimal. According to Routledge, these delays did not hamper Lindsayca’s progress.
“There were some delays in sand barges and other equipment. But those were pretty minimal. And the reality is, our view and the government’s view, that didn’t actually impact the progress of Lindsayca CH4. Their early stage of the project was an engineering design, procurement, that kind of activities.”
“So, it’s not unusual… you mentioned early on with an arbitration case… these sorts of issues will be raised as a way to make a case. But in reality, our view, it didn’t delay access to the site for Lindsayca CH4.”
Delays
The Gas to Energy (GtE) Project is divided into five components: the pipeline from offshore production activities to Wales, the building of 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 and upgrading the national power grid.
While the contractors were given the contract to build the two plants, the procurement and installation of the 225-km gas pipeline from the Wales project site to the offshore oil field is being executed by Exxon.
The installation of the US$1 billion pipeline also includes the upgrade of the roads to get to the site at Wales, the Material Offloading Facility (MOF) and site preparation for 100 acres as well as a lay-down yard – all undertaken by Exxon and subcontracted out. The Guyana Shore Base Inc. (GYSBI) and GAICO Construction were the two companies that had delays in delivering their components of the works.
Based on the contract, the JV contractors are required to deliver 228 MW of power with four gas turbines coming on stream at the end of 2024 at 57 MW each. To get the entire 300 MW, another two steam turbines are expected by the end of 2025. However, there was a delay in the installation of the four turbines. As a result, reports indicate that Lindsayca now wants to complete the gas turbines by August 2025.
Notwithstanding the controversy surrounding timelines, Routledge maintained that Exxon’s work on the Gas to Energy project remains on schedule. This includes the expected shut down of production on Liza Unity and Destiny Floating Production Storage and Offloading (FPSO) vessels between July and August of this year, to facilitate the connection of the pipeline. Each shut down will be for approximately 14 days.
“I know Gas to Energy is always top of mind. We’re certainly very focused on delivering the project. On the pipeline side the offshore portion of the pipeline is 70 per cent complete. We currently have two elements of installation ongoing in the shallow waters and the near to shore.”
“It’s one vessel that’s leading that installation and then there’s another vessel out in the deep water, laying pipelines there. Onshore, we’re also making good progress. We’re at 68 per cent complete onshore. So roughly 70 per cent complete across the entire pipeline,” Routledge further explained. (G3)