Govt. signs agreement to build US$759M Wales gas plant

Dec 14, 2022 News

Kaieteur News – The Government of Guyana on Tuesday signed a US$759M contract with CH4-Lindsayca to build two Natural Gas Plants at Wales, West Bank Demerara (WBD).

The Engineering, Procurement and Construction (EPC) contract, stipulates that CH4-Lindsayca is solely responsible for the design, procurement and construction of the plants. The firm will be tasked with building a Natural Gas Liquid plant and a 300 megawatt natural gas fire plant for electricity at Wales.

Vice President Bharrat Jagdeo at a recent press conference had revealed that the two plants alone are expected to cost Guyana US$759M. On Tuesday, the Vice President said he will make the details of the contract public in the future.

“Over the course of the next few weeks, we will make ourselves available to the media so that they can better understand the details of what is being signed here today,” Jagdeo said.

However, Jagdeo related that he believes that CH4-Lindsayca “can deliver on this project” and told the contractors that timelines, quality of work and staying within budget is of great importance.

His Excellency Dr. Mohamed Irfaan Ali, Vice President Dr. Bharrat Jagdeo, Prime Minister Brigadier (Ret’d) Mark Phillips, Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh and Natural Resources Minister, Vickram Bharrat at the signing.

“These are three things that we will look for and monitor carefully”, Jagdeo said.

Meanwhile, President Irfaan Ali assured that the project will not “slow down” Government’s plans to pursue a hydro project since it is the administration’s intention to provide “diversified energy mix.”

CH4-Lindsayca was among five companies who had placed bids for the projects in September. The American joint venture had placed the highest of five international bids to the tune of US$898M to build the plants. However, Jagdeo at his last press conference indicated that the project cost has been reduced to US$759M.

“In the negotiations, because a number of things in the Lindsayca bid were, they had provisions for a number of things that were not required as part of the manufacturer’s requirement so those were removed and based on the original scope of the contract, the final price came down to US$759 million.”

In November, President Ali announced that his Cabinet issued a no-objection to the joint venture to build the Government aspect of the Gas to Energy project under an Engineering Procurement Construction (EPC) Contract.

According to CH4 Group website, the company is based in Puerto Rico but has an established presence in several other countries – while Lindsayca is a company based in Texas, United States of America (USA).

Ali had said that the GTE project is expected to deliver power at less than half of the current costs. He said too that the project generation costs, payment for the pipeline, operations and maintenance (O&M), and capital cost recovery, shall total less than US$5 cents per kilowatt-hour.

While the Irfaan Ali Government is moving ahead with the Gas to Energy project, a recent United Nations (UN) report warned Latin America and Caribbean (LAC) countries against pursing natural gas projects. The report noted that pursuing natural gas projects in the Region is costlier than transitioning to renewable energy.

Guyana’s cost for the Gas to Energy project is now over US$2B and counting.

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