Gov’t scraps Request for Proposals for Phase Two of Gas-to-Energy project

Jan 27, 2025 News

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…invites new bids with numbers revised downward

Kaieteur News- Government of Guyana (GoG) has scrapped its earlier issued Request For Proposals (RFP) for the design, finance and operation of Phase Two of the Gas-to-Energy (GTE) Project.

According to an advertisement published in the Kaieteur News by the Office of the Prime Minister (OPM) on Sunday, the government has updated its Request For Proposals.

The deadline on the first RFP was November 14, 2024, but that date was later extended to January 14, 2025.

In its new invitation for bids, it was observed that the GoG has revised the number downwards with respect to gas that will be available daily for the project, as well as the expected Natural Gas Liquids (NGL) to be produced. It has, however, increased the electricity generation expected to be produced from Phase Two of the gas project.

According to the document, the government will be securing from ExxonMobil Guyana Limited (EMGL), 70 million cubic feet (MMCFD) of rich gas which it intends to use in another Integrated Power Plant and NGL facility. The previous RFP indicated that an additional five million cubic feet of gas per day would have been available.

Nevertheless, interested parties will be required to design, construct and operate a 300 megawatt (MW) combined-cycle power plant to deliver 2,600 gigawatt hours (GWH) of electricity per annum. The power will be sold to the Guyana Power and Light Inc (GPL) via a 20-year Power Purchase Agreement (PPA). In its previous RFP, government requested a 250 MW power plant.

Additionally, Phase Two of the GTE project includes the design, construction and operation of an NGL facility to produce at approximately 5,800 barrels per day (bpd) of NGL products (propane, butane, and C5+), utilizing 70 MMCFD of “rich gas”.  This is a reduction compared to the previous RFP, which anticipated 6000 bpd of NGLs.

Notably, the contractor will be expected to transfer to the GoG, at no cost, excess “lean gas,” estimated at up to 20 MMCFD, for utilization in downstream industries, for example, fertilizer production, to be located at Wales.

According to the OPM, “Phase Two will be located on no more than 100 acres of land, immediately adjacent to the existing 300 MW integrated facility. The project will be owned and financed 100% by the private sector, under a project finance structure, which will design and construct the integrated facilities, to a standard and specification that meets and or exceeds that of Phase I of the GTE.”

The Government said that only firms (consortia) adjudged to be experienced in Engineering Procurement and Construction (EPC) and Financing of comparable facilities, will be evaluated. Further, the GOG shall have the right to approve the EPC contract and appoint an independent supervision firm, to ensure that the project is built per the EPC contract and acceptable quality and specifications.

Cost recovery

According to the RFP, investors will recover their investment from the sale of electricity via a 20-year term PPA at a price per KWH and monetization of the NGLs. At the end of the PPA term, the facilities will revert to the GOG at no cost.

It should be noted that Phase II of the GTE project will enjoy the same fiscal incentives as Phase I.

Government has made it clear that responses to the RFP must include financial projections of revenue, expenses, and investments returns. This includes the expected revenue from the sale of NGLs (propane, butane, and C5+), and operating and maintenance cost of the NGL plant as well as a breakdown in PPA price per KWH to specify “(a) payment for the gas (b) operating and maintenance cost (c) financing/amortization of the capital costs. Indicate the breakeven price and estimated sale price for each year along with an assumed inflation rate.”

Gov’t buy-out

The GoG has reserved the right to buy out the project any-time after the construction and commissioning, at an agreed formula, such that the investor obtains a return of investment and reasonable accrued return based on the stated cost of capital.

Additionally, it also reserved the right to transfer the NGLs to market and distribute with Phase One.

Responses to the RFP must be submitted to the National Procurement and Tender Administration Board (NPTAB) by 14:00hrs (2pm) on March 31, 2025.

According to the document, “The GoG is not bound to accept any response to this RFP and reserves the right to select any Party for any specific element of the RFP and to annul the process at any time without further direction, without thereby incurring any liability to the affected interested parties.”

Meanwhile, in an invited comment, Prime Minister Brigadier (ret’d) Mark Phillips explained that all bids previously received will remain valid. He did not indicate how many bids were received by government but noted, “It’s just an opportunity for others to submit bids.”

(Gov’t scraps Request for Proposals for Phase Two of Gas-to-Energy project)

(Gov’t scraps Request)

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• bids, downwards, GTE, Phase two, Prime Minister, proposals, scrapped

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