VP Jagdeo: Despite delays, GtE project on track for completion

Guyana’s transformative Gas-to-Energy (GtE) project is encountering some delays due to ongoing arbitration processes and challenges with equipment delivery.

The approximately $2 billion project aims 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 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 proceed 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 proceed to arbitration, we’ll inform the public or if we decide to accept the report,” Vice President, Dr Bharrat Jagdeo said on Thursday.

He informed reporters that while the financial implications for the delay are not yet determined, the government is cautiously working to minimise these impacts, while ensuring the project’s realisation.

Given the economic boom occurring across multiple sectors, the government is investing in this massive facility to, firstly, reduce electricity costs by 50 per cent, which will, in turn, attract foreign investment, and secondly, to complement the demand for power.

“We’re planning full steam ahead for the project… It might be delayed, but it is happening. It is happening [and] I am pleased about that,” he underscored.

Meanwhile, the government has shortlisted and started negotiations with the German company Siemens Energy as the potential firm to operate and manage the power plant component of the GTE project in Wales, Region Three.

This approach, he highlighted, 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, 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 to actually do it. And they’re a big global company,” Jagdeo explained.

Furthermore, the government is seeking potential firms to manage the natural gas liquid (NGL) facility, which will be responsible for the processing and distribution of by-products like cooking gas, fertiliser, and other natural products.

This single-largest investment comprises the construction of a pipeline, power plant, natural gas liquids facility, and upgrades to the power distribution network.

US-based company CH4 Lindsayca is building out 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 allow natural gas to be transported 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 further support the development of the GTE project. (DPI)