The Government of Guyana today announced that it has opted to proceed to arbitration in relation to disputes with Lindsayca/CH4, the contractor for components of the Wales Gas-to-Energy (GTE) project.
Under the Engineering, Procurement, and Construction (EPC) contract between the Government of Guyana and Lindsayca/CH4 (LNDCH4), the company is responsible for constructing a natural gas-fired power plant and natural gas liquids (NGL) plant. That contract was awarded to the tune of US$759 million.
However, LNDCH4 had sought an additional US$50 million due to project delays. The Dispute Avoidance and Adjudication Board (DAAB) had issued a formal decision on January 31, allocating a 28-day period for both parties to decide whether to pursue arbitration.
“On February 27 – within that timeframe – each party served a Notice of Dissatisfaction on the other, thereby signaling its intention to initiate arbitration,” the government said.
The arbitration will be administered by the International Chamber of Commerce (ICC), with the venue in Washington, D.C. Notably, pursuant to FIDIC’s DAAB procedures, all DAAB decisions in this matter are confidential.
Despite, the pending arbitration, it was underscored that both parties remain committed to expediting the power plant and NGL plant. Government stated that both itself and the contractor, LNDCH4 recognize the
importance of the project to the Guyanese economy.
“The contractor has resumed onsite activities, including piling, and preparations for foundation work are imminent. Construction of a cement batching plant is underway, steel for foundation work has been delivered to the site, and a man-camp is being established, with more than 170 workers currently mobilized,” it was stated.
Upon completion, the project is expected to substantially lower electricity generation costs,
enabling Guyana Power and Light Inc. (GPL) to reduce tari s by up to 50%. This reduction has significant implications for the Guyanese economy, fostering more competitive production costs and stimulating broader economic growth.
Notably, ExxonMobil Guyana Limited
(EMGL) has already finished constructing the gas pipeline, and the transmission lines and
substations required for integration of the project are significantly advanced, with completion anticipated by mid-year.
