LNG

ExxonMobil indicated the timeline of getting Golden Pass LNG project into full operation could slip into 2026, though commissioning works are already underway.

July 25 (LNGJ) - A Texan bankruptcy court approved a settlement between US engineering firm Zachry Holdings and the Golden Pass LNG project developers, ExxonMobil Corp. and QatarEnergy, to appoint a new lead contractor. Zachry was the lead contractor in the $10 billion project to transform the Golden Pass LNG terminal in Texas into an export plant but filed on May 8, 2024, for Chapter 11 bankruptcy protection.

   The move effectively blocked the project at the site on the Sabine-Neches Waterway in Texas. However, the two remaining contractors Chiyoda Corp. of Japan and the CB&I subsidiary of US firm McDermott can now resume their work with Chiyoda in the lead role. The three liquefaction Trains at Golden Pass will have a nameplate capacity of around 16 million tonnes per annum of LNG with ExxonMobil and QatarEnergy owning 30 percent and 70 percent of the project respectively.

Chiyoda Corp, the Japanese LNG engineering company working on the Golden Pass project in Texas that has been hit by the bankruptcy of the US Zachry construction group, is seeking an immediate return to building work along with the owners to get Train 1 back on track.

April 22 (LNGJ) - French major TotalEnergies is going ahead with a large investment in the Marsa liquefied natural gas project in the Sultanate of Oman to serve as the first LNG bunkering hub in the Middle East located at the port of Sohar. The joint venture between TotalEnergies and Oman National Oil Company will build a liquefaction plant with 1 million tonnes per annum of output and with first production scheduled for the first quarter of 2028.

   Feed-gas will come from Oman’s Mabrouk North-East field in the onshore Block 10 area. The main engineering, procurement and construction contracts have been awarded to France’s Technip Energies for the LNG plant and to CB&I for the 165,000 cubic metres capacity LNG storage tank. The LNG is primarily intended to serve the marine fuel market in the Arabian Gulf region while LNG quantities not sold as bunker fuel will be off-taken by TotalEnergies and the Omani partner.

McDermott International, the US energy and liquefied natural gas project engineering company, has reached support agreements with more than 75 percent of secured letter of credit facility providers, funded debt creditors and equity holders stemming from its several years of debt woes.

McDermott, the US engineering company, said its storage business, CB&I, has been awarded a contract by Venture Global’s Plaquemines LNG project for two 200,000 cubic-metre storage tanks.

Jan 12 (LNGJ) - The US liquefied natural gas LNG storage business CB&I has been contracted to design and build tanks for peak-shaving facilities in Bluff Creek and Ixonia in the southeast of the US state of Wisconsin. “Demand for natural gas fluctuates daily and seasonally,” said Cesar Canals, Senior Vice President of CB&I.

   “By storing LNG when demand is low, energy companies can ensure adequate supply when demand is at its peak - which are normally the coldest days of winter in Wisconsin,” added Canals whose company is a subsidiary of engineering firm McDermott. CB&I built the first LNG peak-shaving facility in North America in 1965 and which is still in operation.

McDermott International, the leading LNG and energy project engineering company, has decided to invest in Lummus Technology Holdings, the company it sold as part of its restructuring to help emerge from financial difficulties over the last several years.

Under the terms of the asset purchase agreement for the sale of Lummus Technology, entered into with a joint partnership between Haldia Petrochemicals Ltd., a flagship company of The Chatterjee Group, and Rhône Capital, in January 2020, McDermott was provided the option to purchase a minority common equity ownership interest.

The Houston, Texas-based company said it had now exercised this option.

Lummus is a leading licensor of proprietary petrochemical, refining, gasification and gas processing technologies, and a supplier of catalysts, other equipment and related engineering services.

It became part of McDermott after the ill-timed takeover of CB&I, which itself had acquired Lummus for $950 million in 2007 from Swiss-Swedish power and automation company ABB.

“This agreement not only reinforces our already-robust and active relationship, but also reflects our support of, and belief in the Lummus long-term strategic plan,” said David Dickson, President and Chief Executive of McDermott.

“Together, we will continue to combine McDermott's iEPC delivery with Lummus's innovative technology solutions to our customers across the globe,” added Dickson.

The sale of Lummus was part of McDermott's comprehensive restructuring process, which McDermott successfully completed on June 30 in 2020 to help it emerge from Chapter 11 bankruptcy protection.

Since the sale, McDermott and Lummus have continued to work together through their strategic agreement to connect customers to technology solutions.

McDermott is involved in some of the world’s leading LNG construction projects, including on the US Gulf Coast and the North Field Expansion in Qatar.

McDermott has additionally been engaged as a contractor on the Golden Pass LNG export project for Qatar Petroleum and ExxonMobil.

Qatar Petroleum announced in January 2021 that its North Field South (NFS) project front-end engineering and design contract had been awarded to McDermott.

McDermott has executed projects in Qatar's North Field for more than 30 years and said it would leverage its experience and resources for this contract.

The contract scope includes the replication of five offshore wellhead platforms.

The FEED contract will be executed from McDermott's office in the Qatari capital Doha and work would begin immediately.

Qatar’s LNG expansion involves production increasing from the current 77 million tonnes per annum to 110 MTPA and then to 126 MTPA by 2027.

Qatar has already started developing its drilling campaign for the Arab Gulf feed-gas from the North Field that will underpin the liquefaction needs at the Ras Laffan plant in Qatar.

McDermott International, the LNG and energy engineering company, has secured around $560 million in new capital through a series of transactions expected to close by the end of 2020, just a year after filing for Chapter 11 bankruptcy protection.

McDermott has secured commitments from certain existing lenders and shareholders for these transactions, as well as approval from a steering committee comprised of certain existing letter of credit and term loan lenders.

“The transactions are designed to further strengthen the company's balance sheet, increase liquidity and fund future growth opportunities,” said McDermott.

The Houston, Texas-based company said the support reflected their confidence in the long-term business strategy and competitive position.

Analysts noted that many companies in the US and global oil and gas sector have experienced difficulties in the past year, though McDermott's problems were essentially caused by an ill-timed take-over deal.

McDermott is involved in some of the world’s leading LNG construction projects, including on the US Gulf Coast and the North Field Expansion in Qatar and at Ichthys LNG in Australia.

McDermott has additionally been engaged as a contractor on the Golden Pass LNG export project for Qatar Petroleum and ExxonMobil.

“Following on the heels of a successful restructuring earlier this year, this additional capital will further solidify our liquidity position, enabling us to continue to deliver superior project execution for our customers and consistently pursue new growth opportunities as demand for our expertise and capabilities increases,” said
David Dickson, President and Chief Executive of McDermott.

Kirkland and Ellis LLP is serving as legal counsel to McDermott, AP Services, LLC, an affiliate of AlixPartners, is serving as operational advisor and Centerview Partners is serving as the company's financial advisor.

McDermott first received approval for a comprehensive restructuring plan in January 2020, supported by more than two-thirds of all its funded debt creditors.

The equity-for-debt plan eliminated more than $4.6 billion of McDermott’s debt.

The restructuring was implemented through a pre-packaged Chapter 11 process.

The process resulted in a comprehensive balance sheet restructuring and transformed into equity nearly all of McDermott's funded debt.

The company had suffered financial problems since it completed the $6Bln deal in 2018 to buy LNG rival engineering, procurement and construction company Chicago Bridge & Iron (CB&I).

The restructuring transaction managed to strengthen its balance sheet and normalize its trade debt.

All of McDermott's businesses operated as normal during the restructuring.

McDermott also completed the sale of Lummus Technology to a joint partnership between Haldia Petrochemicals, a flagship company of The Chatterjee Group, and equity fund Rhone Capital, having received all required regulatory approvals under the reorganization.

McDermott emerged from the crisis with a newly constituted board of directors.

McDermott International, the US energy and LNG engineering company, said that first gas had flowed from a field development of India's Oil and Natural Gas Corp. (ONGC) in the offshore Krishna Godavari Basin in the Bay of Bengal.

McDermott was awarded the offshore contract for ONGC’s 98/2 Block in the KG Basin in October 2018.

The KG 98/2 block is situated offshore the Godavari River delta, about 35 kilometres off the East Coast state of Andhra Pradesh and extends for 7,290 square kilometres in water depths ranging from 300 metres to 3,200 metres.

It is currently one of the largest subsea projects in India and included the supply of a package including production systems (SPS), including 26 deepwater trees, and the installation of subsea umbilicals, risers and flowlines.

The early first gas involved the tie-back of a single well to the existing Vashishta facility.

At 4,265 feet (1,300 metres), the first well that has been opened for early first gas is the deepest water depth opened by ONGC.

The ONGC gas field will further help satisfy India's growing natural gas demand, about half of which is made up of domestic pipeline gas supplies from areas like the KG Basin, wile the other half comes from LNG imports.

“McDermott is a leader in the subsea space and we have worked incredibly hard to fast-track the production to early first gas,” said Ian Prescott, McDermott's Senior Vice President for Asia Pacific.

“To deliver this accelerated schedule is an exceptional achievement and testament to the benefits of the collaborative commercial model put forward to ONGC,” Prescott explained.

“Production from a deepwater well in less than 14 months is an outstanding achievement for the exploration and production industry,” he stated.

McDermott said that in line with the “Made in India' approach for the 98/2 project, a substantial amount of engineering and project management has been led from McDermott's operations in Chennai.

“This local approach is a new initiative in the deepwater subsea space for McDermott,” said the Houston-based company.

“We look forward to continuing our work in the Bay of Bengal as we help ONGC meet India's growing energy demands,” it added.

McDermott has been conducting business as usual while having to ease its financial concerns in mid-March when a US bankruptcy court in Texas approved the sale of its Lummus Technology business to global equity funds.

Under the terms of the Chapter 11 plan, McDermott will complete a comprehensive restructuring forced on it by financial problems, including those that arose from takeover of CB&I.

McDermott is involved in some of the world’s leading LNG construction projects, including several on the US Gulf Coast and the North Field Expansion in Qatar.

Currently McDermott is working with other firms on both the Cameron LNG project at Hackberry in Louisiana and the Freeport export facility at Quintana Island in Texas.

McDermott has additionally been engaged as a contractor on the Golden Pass LNG export project for Qatar Petroleum and ExxonMobil venture in Texas.