Okay. So I have the TES: Construction Set with the Extender installed. I can launch the TES: Construction Set with or without the Extender.
The LIP file has generated fine - the NPCs lips move correctly. (Y)
I can listen to the file in the TES: Construction Set. I can see the file location points to the correct point.
The issue is the sound does not play in game. The NPC's lips move, but no audio is played.
What could be the possible issue?

The wrong formatted audio file, Always use the Extender!