Two of the contractors hired by the Government to construct the US$759M Power Plant and Natural Gas Liquids (NGL) Plant at Wales as part of the Gas-to-Energy Project have filed for arbitration over costs overruns of US$90M, according to a report published by the Reuters News Agency.
The report did not identify the names of the contractors, however, CH4 Lindsayca is among contractors working on the flagship project.
In December, 2022, the Government signed a US$759M contract with CH4/Lindsayca for the construction of combined power plant and natural gas liquid plant at Wales. The project includes the construction of a 300-megawatt power plant.
However, funding for the mega project has proven to be a challenge. The Government has been seeking a US$660M loan from the US Exim Bank to support financing of the onshore facilities, but the loan is still to be approved.
In February, Vice President Bharrat Jagdeo said the Government anticipates that the US EXIM Bank would decide on the loan request from Guyana by June, 2024.
In the interim, the Government approved $80B in this year’s budget to advance infrastructural works on the project, including upgrades to transmission and distribution lines.
According to the report published by Reuters, the first phase of a 300-megawatt (MW) power plant is running six months behind schedule and full operation is not expected until the fourth quarter of 2025.
This was confirmed by Government Consultant, Winston Brassingston, who during the recent Energy Conference and Supply Chain Expo here in Guyana, disclosed that the project will not be completed until December 2025.
Brassington explained that the project suffered from some work delays, including the late delivery of equipment and issues with the foundation at the location chosen for the project.
For the pipeline component of the project, ExxonMobil is currently building out that infrastructure to the tune of US$1 Billion. In its latest update, ExxonMobil said its component of the project was moving a pace.
The arrangement between the Government and the company is that Exxon will be reimbursed by proceeds from the country’s offshore production.
The Government has said that once completed, the project is expected to reduce electricity costs and add approximately 250 megawatts of energy to the national grid.
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