Contractor could pay US$11M monthly for delays to gas-to-energy project

The Government of Guyana and the contractor for the mega Gas-to-Energy project, LINDSAYCA/ CH4 are heading to arbitration.

If the outcome favours the administration, the company could pay about US$11 million in liquated damages for each month the project is delayed.

This is according to Vice President Dr. Bharrat Jagdeo who on Thursday reminded the public that the project at Wales faced some delays but the government believes a three-month extension should suffice.

“If we win the arbitration, they would have to deliver the project by April (2025).

“They have given a schedule that shows later in the year but I didn’t want the public to think that we approved their schedule, we only gave three months.

“If we win the arbitration and they stick to that schedule, it would be 11 million in liquidated damages every month,’ Jagdeo told reporters at his weekly press conference.

LINDSAYCA and the CH4 group are executing the contract for the engineering, procurement and construction of the Guyana integrated natural gas liquid plant and a 300-megawatt power plant at Wales on the West Bank of Demerara.

The firms are seeking additional payments due to cost overruns stemming from delays at other components of the project.

Jagdeo previously explained that the contractor wants more time and additional payments to install four gas turbines needed as part of the first phase of the project. Once installed, these turbines would provide about 228 megawatts (MW) of power.

Those should have been operational by the end of this year but the government is greenlighting a three-month extension from March to April, 2025.

In a release to the media issued on Thursday, Gas-to-Energy project lead Winston Brassington said the contractor is “contratually responsible” to deliver the project’s first phase (called the simple cycle) by April 2025.

If not, the government intends to charge liquated damages at a rate of US$377,000 per day or about US$11.3 million monthly.

The complete project- which includes the four gas turbines and two steam turbines- is expected to provide about 300MW of power, using natural gas brought onshore through an ExxonMobil pipeline.

The project also includes a Natural Gas Liquids (NGL) facility, a transmission and distribution network and a modern control centre.