Gas-to-Energy Project: “We will not compromise national interest” – VP on arbitration over US$50M dispute

As much as Government would like to have the highly anticipated Gas-to-Energy (GtE) Project completed ahead of the 2025 General and Regional Elections, it is not willing to compromise on the country’s interest when it comes to the US$50 million dispute with the contractor, Lindsayca/CH4 (LNDCH4).

This is according to Vice President, Dr Bharrat Jagdeo, at his weekly press conference on Thursday last, where he was asked for an update on the arbitration process that both government and the contractor agreed to last month, after failing to settle the dispute over the financial claim, as well as the deadline of the project.
The Vice President noted that while he cannot speak about the specifics about the arbitration, he assured that works are continuing on the road. Jagdeo added that government is not going to sacrifice the nation’s interest in order to get the project completed.
“I can assure you that not because we want this project to be completed in time before the elections… that we’re going to compromise the interest of the people of this country. That’s why we’re fully, fully go to arbitration and make all of our case, even if it delays the project a bit. We have to protect the national interest first,” he stated.
According to the VP, there is sufficient power in the national grid with the two power ships that are currently operating in Guyana.
Located at Wales, West Bank Demerara, the GtE Project comprises a 300-megawatt (MW) Combined Cycle Power Plant and a Natural Gas Liquids (NGL) facility.
LNDCH4, a consortium of two United States-based companies, was awarded the US$759 million contract in November 2022 to build the power plant and NGL plant.
However, due to the late handing over of other aspects that affected its work, the contractor had filed financial claims to the tune of US$50 million and sought a six-month extension to the deadline over the delays – both of which were rejected by the Guyana Government, thus leading to a dispute-resolution process that was activated.
Following submissions and hearings, the Dispute Avoidance and Adjudication Board (DAAB) had given the two parties, in January, a 28-day period to decide whether to pursue arbitration.
On March 6, the Guyana Government said in a statement that the two parties served a Notice of Dissatisfaction on each other, thereby signalling their intention to initiate arbitration.
It was noted that the arbitration will be administered by the International Chamber of Commerce (ICC), with Washington, D.C. selected as the venue. According to the government, pursuant to the International Federation of Consulting Engineers’ (FIDIC’s) DAAB procedures, all DAAB decisions in this matter are confidential.
Notwithstanding the disputes, both the Guyana Government and LNDCH4 have recognised the strategic importance of the GtE project to the Guyanese economy and works are ongoing at the site.
VP Jagdeo had told reporters last month that this arbitration process could be lengthy.
“Both sides decided to go to arbitration… and so the timeline for arbitration can’t be determined by us but it may be an extended period. [But] they have resumed work now… So, there is resumption of work and we’re happy about that whilst we arbitrating the differences,” Jagdeo had noted at a March 6 press conference.
The Vice President went on to explain that a part from the financial claim and deadline extension, there were some additional claims made by the contractor including delays in the completion of the access road to the project site.
Moreover, when asked about the deadline for the completion of the GtE project, Jagdeo had said, “It’s premature for me to say that, and whatever we say here could influence the arbitration because, remember, they had asked for additional time. If we start acknowledging their timeline, as Government, then we may very well be harming our own case in the arbitration. So, people have to understand the nuances of doing that. We don’t want to bolster their case.”
Previously, the Guyana Government had said that the contractor is expected to start operating the power plant by April 2025. However, during the Guyana Energy Conference and Supply Chain Expo held in Georgetown back in February, Project Lead Winston Brassington had stated during a presentation on the GtE initiative that there are some delays.”
“[The integrated facility] is scheduled to be delivered in the second half of this year but we have seen a schedule that suggests it will take longer. Contractually, this year; realistically, we are looking at some delays,” Brassington had stated.
Meanwhile, LNDCH4 have also filed a second US$50 million financial claim, as compensation for additional works that had to be done to stabilize the soil at the project site.
Upon completion, the project is expected to substantially lower electricity generation costs, enabling Guyana Power and Light Inc. (GPL) to reduce tariffs by up to 50 percent. This reduction has significant implications for the Guyanese economy, fostering more competitive production costs and stimulating broader economic growth.
ExxonMobil Guyana Limited (EMGL) has already finished constructing the gas pipeline, and the transmission lines and substations required for integration of the project are significantly advanced, with completion anticipated by mid-year.