Latest update April 25th, 2024 12:59 AM
Nov 11, 2022 News
– Indian firm lands US$22.1M deal to supervise project
Kaieteur News – President Irfaan Ali, on Thursday announced that the Government of Guyana (GoG) via Cabinet has approved a contract to a foreign joint venture that bid US$900M to construct the 300 megawatts Power Plant and Natural Gas Liquids (NGL) facility at Wales, West Coast Demerara (WCD).
The Wales Gas-to-Energy (GTE) project will encompass three major aspects, that is, the pipeline to transport the gas to Wales, the NGL facility that will treat and separate the gas, and the power plant to generate the electricity. Notably, so far, Guyanese have been told that the pipeline aspect, which is being pursued by US oil major ExxonMobil, will cost around US$1.3 billion and Vice President Bharrat Jagdeo, was hopeful that the Government’s aspect would cost around US$700M.
In September 2022, Kaieteur News had reported that five international firms had submitted bids for the construction of the two components of the GTE project. The companies’ bids are as follow: Guycan Consortium – US$549,088,000, China Energy Int’l Group Co. Limited – US$466,649,772, China Machinery Engineering Inc. – US$696,001,776, Power China Int’l Group Limited – US$703,652,256, and Lindsayca Inc. in joint venture with CH4 Inc. – US$898,764,244.
President Ali announced that Cabinet on Thursday issued a no-objection to CH4-Lindsayca joint venture to build the Government aspect of the GTE 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 explained that Cabinet’s no-objection will now allow negotiations to proceed to conclude an EPC contract. He noted too that Power China, the second highest bidder, was ranked number two and may be engaged if negotiations fail to conclude a contract with the joint-venture by the end of November. “Contract negotiations will now start with the expectation that a contract will be executed before the end of November. Key considerations in the evaluation took account of the expected date of delivery of the 300 MW power plant by December 2024. Both top-ranked companies confirmed this deadline. The EPC Contract will be supervised by a global supervision firm. The selected supervision firm is Engineers India Limited,” President Ali said. In addition to Engineers India Limited, Worley (T&T), Stratergy (USA), SGS Panama Control Services Inc., Novus Guyana Inc., Massy Wood Guyana Inc., CB & Associates Inc. in joint venture with Stantec and TGM (Canada) had submitted bids to supervise the project. Engineers India Limited had placed a bid of US$23, 331, 860 for the job, but the contract WHICH WAS AWARDED ON November 1, 2022 was pegged at US$22,143,190.
The Ministry had explained in its advertisement that the main objective of this Consultancy is for the Consultant to assist the Government of Guyana through the Gas to Energy Task Force in the design review, construction, supervision and general project management of the development of the integrated plants, and contract administration throughout the project implementation process and thereafter during the defects liability period. The estimated duration of the project is 42 months from the date of Contract signing and at least 12 months thereafter for defects liability from a date to be determined. The Ministry said that Consultants will be selected in accordance with the policies and procedures set out by the National Procurement Act (2003).
Ali explained that prior to the conclusion of the construction, an international firm will be selected to operate the project to international standards and best practices. He added that Exxon is expected to deliver the completed pipeline to the power plant by the fourth quarter of 2024, to achieve commissioning and testing of the power plant by the end of 2024.
According to President Ali, 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.
During a recent Press Conference, Vice President Jagdeo had revealed that the Government had hired two international firms, Stantec from Canada and Whirley from the United Kingdom (UK) to evaluate the bids received from the contractors for the construction of the power plant and the NGL facility. He stated that the decision was made by the Government to hire the two firms to evaluate the technical aspect of the bid due to the fact that the Government does not have the expertise to do so. Notably, during President Ali’s announcement on Thursday he revealed that based on the reports that were submitted by the two firms – an evaluation team of three people which included a representative of Exxon – unanimously ranked CH4/Lindsayca as number one, and Power China as number two to construct the NGL facility and power plant.
While the Irfaan Ali Government is moving ahead with the GTE, 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. It states that an expansion of renewable energy sources instead of continuing a fossil fuel path, even with what has been promoted as ‘clean’ natural gas, would be by far the best choice for the Region in terms of costs, jobs, and Green House Gas (GHG) emission reductions. The report stated too, that investing in renewable energy largely outweighs economic, social and climate benefits of natural gas for energy generation.
Jagdeo giving Exxon 102 cent to collect 2 cent.
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