The arbitration panel that has been assembled to address the ongoing dispute between the Government of Guyana and CH4-Lindsayca, one of the key contractors involved in the Gas-to-Energy project, is expected to visit Guyana in October. The three- member panel is expected to oversee the proceedings related to a US$90 million cost overrun claim made by Lindsayca in April.
The company, a joint venture between United States (US) companies CH4 and Lindsayca was awarded a US$759 million contract in November 2022 to build a 300-megawatt power plant and a natural gas liquids (NGL) facility at Wales, West Demerara to be used for the gas-to-energy project.
Vice President Bharrat Jagdeo, during a press conference today, confirmed the arbitration panel’s upcoming visit, noting, “I must say that I thought they were visiting last week, but I was told that it’s in October that the visit will take place by the arbitration panel.”
The conflict stemmed from cost overruns incurred by the contractors, CH4-Lindsayca, who have filed for arbitration, claiming an additional US$90 million in project expenses. These cost overruns are linked to delays in the construction phase of the Gas-to-Energy project, which aims to produce 228 megawatts of power by 2024.
The delays were attributed to ExxonMobil and its subcontractor, Guyana Shore Base Inc. (GYSBI), which were responsible for critical preparatory works on the project site. According to Jagdeo, ExxonMobil was tasked with site preparation, including road upgrades, construction of the materials offloading facility, and other essential infrastructure. However, the site was not handed over to CH4-Lindsayca until September 2023, three months behind the scheduled June deadline.
“Exxon was responsible for the site preparation, the road, the MOF…that is the materials offloading facility and the laydown yard,” Jagdeo explained. “We were supposed to hand over the site to the contractor by June, but we did not… that is, Exxon did not hand over the site until September, and even then, it was still incomplete.”
Jagdeo also highlighted that ExxonMobil had allocated an additional US$14 million to GYSBI to complete the site, but the delays persisted. This postponement not only pushed back the project’s timeline but also led to the contractors seeking an extension on the completion deadline. Originally slated for December 2024, the government has now proposed April 2025 for the completion of the first phase of the project.
The contractors, however, had expressed concerns that even this new deadline may be insufficient. Citing potential liquidated damages of over US$11 million per month for any further delays, CH4-Lindsayca is pushing for an extended deadline beyond April 2025.
According to Jagdeo, upon their visit, the arbitrators will conduct a site visit to ascertain what really happened on the grounds. Following the panel’s visit in October, it is expected that it will clarify the responsibilities of all parties involved and address the financial dispute at the heart of the matter.
Despite the dispute, Jagdeo has emphasized that the government is committed to completing the project on schedule, ensuring full project completion by the end of 2025, as outlined in the original contract.
