Government Initiates Arbitration with Gas to Energy Contractor Over Project Delays
Energy News

Government Initiates Arbitration with Gas to Energy Contractor Over Project Delays

By Saskia Warrick
September 27, 2024

The government has taken steps to initiate arbitration with the contractor of the Gas to Energy project due to significant delays in its progress.

This development was announced by Vice President and General Secretary of the PPP/C, Dr. Bharrat Jagdeo, during a recent press conference.

Originally, the first gas from the project was anticipated by the end of this year; however, the handover of the site and soil stabilization have faced setbacks.

In response to these delays, the government proposed an extension for project completion until April 2025.

However, the contractor rejected this proposal, suggesting instead a completion timeline extending to the latter half of 2025 and seeking additional payments due to cost overruns attributed to delays in other project components.

As a result of these complications, the government has opted for arbitration, which may lead to the contractor incurring liquidity damages.

Dr. Jagdeo further stated that once the project is operational, consumers could expect a reduction of up to 50% in electricity costs.

The Gas to Energy project is being executed by LINDSAYCA and the CH4 group, and upon completion, it is expected to generate 300 megawatts of power utilizing natural gas transported onshore via an ExxonMobil pipeline.

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