Govt/LNDCH4 dispute on GtE Project: Ruling likely by end of January – VP Jagdeo

The Dispute Avoidance/Adjudication Board (DAAB) that was established to settle the ongoing dispute between the Guyana Government and the contractor for the Gas-to-Energy (GtE) Project, Lindsayca CH4 Guyana Inc. (LNDCH4), who are at loggerheads over a US$50 million claim by the company and the timeline for the completion of the project, could deliver its decision on the matter by the end of next month.
This is according to Vice President Dr Bharrat Jagdeo, who told reporters at a press conference on Friday that the parties have already made oral and written submissions to the three-member panel at a recent hearing.
“They [first] had to make written submissions to the DAAB. Then they had in Miami, the presentations by our lawyers and [now] they have, I think, the 15th of January to make some supplementary presentations,” Jagdeo disclosed.
According to the Vice President, a ruling is likely by the end of January and if this is not accepted by the parties then the matter will go to full arbitration.

“I think by the end of [next] month, they will rule on the matter. So, if the parties accept that, their claims can be settled – if they accept the ruling. If the parties decide not to [accept the ruling] then you go to full arbitration,” he stated.
The Joint Venture formed by United States (US)-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 Natural Gas Liquids (NGL) facility at Wales, West Bank Demerara (WBD)– key components of the GtE Project.
However, there was a three-month delay in other components of the project that would affect LNDCH4-Guyana’s delivery of the power plant in accordance with the contractual timelines. While the Government has extended the deadline by three months, the contractor is not satisfied and wants more time.
In addition, LNDCH4-Guyana is making financial claims to the tune of US$50 million, stating that the delays would cost the company. The Guyana Government has already rejected this financial claim thus resulting in the contractor activating the dispute resolution mechanism.
But even as this first dispute is being mediated, the contractor has made another claim.
“There have been some additional claims by CH4 and Lindsayca, particularly as they relate to the soil condition and those would have to go through the technical process to see whether they are justified or not… But I don’t want to comment on those because those matters could end up in arbitration. [It] has to go through a technical process when they submit their claims… We have an engineering company that oversees the contract and they would have to give their views on the claim – whether it merits addressing or not,” VP Jagdeo posited.
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, then 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 (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-Kilimetre (km) gas pipeline from the Wales project site to the offshore oil field is being executed by US oil major ExxonMobil Guyana, which is carrying out production activities in the Stabroek Block.
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. However, there were three-month of delays in the handing over of two of these components to LNDCH4-Guyana for them to start their work.
Based on the contract, LNDCH4-Guyana is 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, the contractor wants to deliver the gas turbines until August 2025.
Only recently, Vice President Dr Bharrat Jagdeo warned that if the Government wins the arbitration, then there would be liquidated damages if the contractor does not meet the April 2025 deadline to start delivering power.
“There is a delay now, because the site was handed over late… We said what we believe is justified is a three-month extension to the contract. We offered that. The company doesn’t want that. They want more money… They’ve asked for a longer extension,” Jagdeo told reporters at a press conference back in September.
He added, “We have an arbitration now taking place and if we win the arbitration, they would have only by April to deliver this project. They have given a schedule which shows [project delivery] later in the year… We have only approved a three-month extension. So, if we win the arbitration and we stick with that schedule then there would be liquidated damages.”
But even as efforts are being taken to resolve this dispute, the Guyana Government has maintained that this issue would not impact the project and that work continue on the ground.
In fact, only earlier this week, it was announced that the Board of the US EXIM (Export-Import) Bank has given final approved of a US$526 million loan for the GtE Project.