BREAKING: Cabinet gives go-ahead for 300-megawatt power plant at Wales

The Government of Guyana through the Cabinet on Thursday issued its no objection to the construction of the 300 megawatts natural gas-fired power plant as part of the Gas-to-Shore project at Wales, West Bank Demerara.

CH4 and Lindsayca, one of five companies that submitted bids in September, 2022 to build the combined cycle power plant and natural gas liquids plant were given the government’s approval, President Dr. Irfaan Ali said on Thursday on a Facebook live.

“Under an Engineering, Procurement, and Construction contract, the cabinet’s no-objection will now allow negotiations to proceed, to conclude an EPC contract,” the Head of State said.

President Ali noted that Power China International Group Ltd was ranked number two and may be engaged if negotiations fail to conclude a contract with CH4 and Lindsayca by the end of November, 2022.

CH4 and Lindsayca had submitted a bid of US$898,764,244 while Power China had submitted a bid of US$703,652,256. Other bidders included Guycan Consortium (US$549,088,000), China Machinery Engineering (US$466,649,772), and China Energy Int’l Gr. Co. Ltd (US$466,649,772).

The bids were evaluated for technical compliance and ranking by Stantee and Worley, two global engineering firms with expertise in oil and gas, and based on their reports, an evaluation team was appointed.

The evaluation team performed the evaluation in accordance with the technical and economic criteria set out in the request for proposal and on the basis of the bids submitted and clarifications received, the team ranked the companies.

“Contract negotiations will now start with the expectation that a contract will be executed before the end of November,” President Ali said.

Key considerations in the evaluation took into account the expected date of delivery of the 300 MW power plant by December 2024. 

The Head of State noted that the EPC Contract will be supervised by a global supervision firm, Engineers India Limited and prior to the conclusion of the construction, an international firm will be competitively selected to operate the project to international standards and best practice. 

Noteworthy, the government and ExxonMobil are developing a 12-inch gas pipeline that will run 225km (140mi) from the Liza-1 and Liza-2 projects on Stabroek.

Exxon Mobil Guyana is expected to deliver the completed pipeline to the power plant by the fourth quarter of 2024, to achieve commissioning and testing of the 300 MW power plant by end of 2024. 

The Gas to Energy Project is expected to deliver power at less than half of the current costs, President Ali said.

“Project generation costs, taking account of payment for the pipeline, operations and maintenance, and capital cost recovery, shall total less than five (5) US cents per kilowatt-hour,” he said.

This is a significant move forward for Guyana, President Ali said, noting that not only will the country achieve energy security but will also see the reduction of energy costs.

With this, the country’s manufacturing and industrial development and expansion can take place and the ordinary man can feel a substantive reduction in the costs of electricity in their pockets and in their household, Dr. Ali said.

“Just for reference, a family at the end of this project that now pays $20,000 per month in light bill or electricity costs will see that cost coming down to $10,000,” he noted.

The Head of State noted that the government has committed to full transparency and accountability by making every aspect of the project public as soon as it becomes available.“

Today as cabinet would have concluded I am pleased to share immediately the no-objection of cabinet on this key and important project in the transformation of our country,” he said.