‘Uncertainty on Gas-to-Energy completion gravely concerning’
Mar 03, 2025
-but third delay not surprising—PNCR says
Kaieteur News- The People’s National Congress Reform (PNCR) has said that the uncertainty surrounding the completion of the Gas-to-Energy project is gravely concerning.
Economist and Advisor to the PNCR, Elson Low.
Speaking at the party’s weekly press conference last Friday, Economist and Advisor to the PNCR Elson Low told the media that this third delay is not greatly surprising but it highlights that the government does not know what they are about. “With a project completion date now set sometime in 2026, it is clear that the PNCR/APNU, as the next government, will have to save and open the project. Let us remind the nation that the gas-to-energy project was fully conceptualised by the APNU+AFC Coalition government, but has since been mismanaged by the PPP regime,” Low stressed.
He reminded that his party had highlighted that the only way for the government to deliver on its promise to reduce electricity costs by 50% in 2025, is to approach the House for funding to directly subsidise electricity supply. “Therefore, citizens should expect further frantic plundering of the Natural Resource Fund, as well as the rushed passage of a large supplementary budget of tens of billions,” Low cautioned.
He said that, “Vice President Jagdeo’s recent waffling and deflection about the financial implications of this latest delay smack of incompetence and murkiness. He noted that the government is still assessing the cost of the delay, including related management costs, but gave no estimate of the costs of the previous delays.” Low urged that these costs must be accounted for and made public, as he believes that the project is currently at least two or three times its original cost, and this will significantly impact the budget of a PNCR/APNU government come next year.
In the same vein, the two arbitration suits against the government for this project also have a series of financial risks attached. These include the amounts of the suits which appears to me roughly around US$100M, in addition to the ongoing legal costs of the proceedings. “We remind Guyanese that it is under the PPP’s watch that there have been a series of stumbling blocks and complications which have led to this contentious situation. If this project were monitored more closely, and the appropriate site studies done before it was put into motion, none of these issues would have emerged,” the economist said.
He added that, recently, the government has begun to speak about a second gas-to-energy project at the same Wales location that has proven to be so problematic. “While this is intended to be privately funded, the same concerns remain. The costs of soil remediation need to be calculated and factored into any agreement with a private power plant investor to avoid potential disputes.” “Therefore, there must be thorough due diligence on all shortlisted bidders, as well as any bidders who is a specially created consortium, all of the beneficial owners must be clearly identified “to expose any PPP nepotism and cronyism.” Additionally, proven experience in the construction and operation of such power plants must be a requirement. The entire process must be transparent and must duly respect the people’s right to know.
Following recent announcement by Head of the Gas-to-Energy (GTE) Taskforce, Winston Brassington, that the gas-to-energy project is not likely to be completed within the stipulated timeline, the contractor, Lindsayca/CH4 last Thursday indicated that enhanced protocols have been implemented to allow for accelerated progress on the construction of two gas plants.
The consortium was contracted by the Government of Guyana (GoG) in December 2022 to build a Natural Gas Liquid (NGL) plant and a 300-megawatt natural gas fire plant at Wales, West Bank Demerara. The construction was delayed following a late handover of the site to the contractor, which led to a dispute between the GoG and the contractor. While that matter was forwarded to the Dispute Avoidance and Adjudication Board (DAAB), government said the construction works were not put on hold.
In a statement to the media yesterday, Lindsayca/CH4 said it was informed of recent public statements about timeline adjustments for the Wales Gas-to-Energy Project. It said, “LNDCH4 Guyana recognises the strategic importance of this landmark project to Guyana’s energy security and economic development. We are actively collaborating with all stakeholders to address technical complexities and logistical considerations.”
The contractor added, “Following productive discussions with the Government of Guyana and other key stakeholders, we have implemented enhanced project management protocols and increased resource allocation to accelerate progress while maintaining the highest quality and safety standards.” The consortium noted that U.S. Ambassador to Guyana, Nicole Theriot, recently reaffirmed the U.S. Government’s full support for the project and underscored the value the United States places on its partnership with Guyana. In welcoming this endorsement, the company reaffirmed its commitment to Guyana’s energy transformation and the delivery of the gas plants, noting its appreciation for the GoG’s partnership in advancing the project.
Kaieteur News had reported Brassington, while providing local energy updates at the recently concluded Guyana Energy Conference, said that the NGL and 300-megawatt powerplant is “contractually scheduled to be delivered in the second half of this year but we have seen a schedule that suggests this is going to take longer – so contractually this year, realistically we’re looking at some delays and a lot of this is, some of these matters are in dispute and therefore I can’t speak about it at this point.”
According to him, the final cost of the two plants is “to be determined,” in light of the ongoing disputes with the joint venture. Brassington’s presentation indicated completion of the plants by 2026. In the meantime, the pipeline element, constructed by ExxonMobil Guyana Limited (EMGL) has been completed, with nitrogen pumped into the structure as it awaits completion of the other components.
On January 31, the DAAB issued its ruling on the dispute between the GoG and the contractor. The Office of the President in a statement however, indicated that the parties to the dispute resolution process are bound by certain rules of “confidentiality”.
As such, Government did not specify the details of the decision made by the DAAB, following a complaint filed on September 19, 2024. It only revealed that the Parties have 28 days to determine if they wish to refer the decisions, or any part thereof, to Arbitration, which would be the next stage in the dispute resolution process. It was explained, “The GOG will, therefore, in the next few weeks, in consultation with its partners, including ExxonMobil, as well as relevant legal and technical advisors, determine the best course forward for GOG.”
(‘Uncertainty on Gas-to-Energy completion gravely concerning’)
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