LNG

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, has had to take a hit on its earnings for the fiscal year just ended.

Chiyoda, based in Yokohama, Japan, said it was revising full-year consolidated financial forecasts and was publishing its earnings late.

Zachry Holdings, the lead contractor in the $10 billion project to transform the Golden Pass LNG terminal in Texas into an export plant, filed on May 8, 2024, for Chapter 11 bankruptcy protection.

Chiyoda said its earnings adjustments were because of the withdrawal of Zachry, one of the engineering partners, and amid efforts by Houston, Texas headquartered subsidiary, Chiyoda International Corp (CIC), to reorganise an operational structure with remaining partner, the McDermott unit CB&I LLC.

Earnings forecast

“Under the circumstances, the cost required to complete construction was forecast and recalculated with sufficient margin based on the currently effective contracts,” Chiyoda explained.

“Consequently, sales and operating income are expected to decrease from the previous forecast,” said Chiyoda.

Ordinary income is expected to drop to 5.5 billion Japanese yen ($34.5 million) from 28Bln yen ($175.37M) in the previous forecast.

This is down from the 20.32Bln yen ($127.2M) logged in the previous 2022-2023 fiscal year.

“Short-term and long-term plans to complete construction will be agreed among the three parties Chiyoda, CBI and the Golden Pass (GPX) project) soon after Zachry’s official and formal withdrawal from the project,” said Chiyoda.

Chiyoda stated that it would strive to successfully negotiate a contract with GPX and restore its equity capital by counting the contract money in its financial results to re-estimate reserves for losses on construction contracts in or after the fiscal term of the second quarter of the fiscal year 2024.

Chiyoda's secure finances

“Chiyoda’s cash and cash equivalents on its consolidated financial statements after the end of March 2024 up to the present day is about 100 billion yen ($627M) and there is no risk of harm to its business operations,” the company declared.

The Golden Pass liquefaction facilities are being constructed at the existing terminal located on the Sabine-Neches Waterway in Texas.

Three liquefaction Trains are planned with a combined nameplate capacity of around 16 million tonnes per annum of LNG.

ExxonMobil and QatarEnergy own 30 percent and 70 percent respectively of the venture.

The Train 1 mechanical completion had been scheduled for the end of 2024 and with first LNG in the first half of 2025.

JGC Holdings Corp., the leading Japanese LNG and energy engineering firm, has appointed the former executive at KBR of the US, Farhan Mujib, as President of JGC Corp, the overseas engineering, procurement and construction business.

The Russian Yamal LNG plant is experiencing problems with the fourth and smallest processing Train at the facility in Northern Siberia and which was added by operator Novatek after the three main Trains were completed.

Nigeria’s Department of Petroleum Resources (DPR) has awarded a licence for a project to establish the West African nation’s first floating liquefied natural gas production plant and run by a Nigerian oil and gas company rather than an international energy major.

May 7 (LNGJ) - Chiyoda Corp, the leading Japanese energy and LNG engineering company involved in projects worldwide, reported sales of 315.39 billion yen ($2.88Bln) in the fiscal year to the end of March 2021, a fall of 18.3 percent on the previous year. However, Chiyoda pointed out that it expected improvements in the coming year as it executed LNG engineering, procurement and construction projects in Qatar, the US and Nigeria.

   “In Qatar, Chiyoda has won the order for the EPC phase of the North Field East LNG project, which is the expansion of four LNG Trains with capacity of 8 million metric tons per annum,” said the company. “In the US, the Golden Pass LNG project is in the EPC phase and in the Nigeria LNG project Chiyoda is providing review and other technical support to our partner, which is performing the engineering,” it added. “In Japan, EPC phase work is currently underway to reinforce, modify, and repair existing LNG terminals that were built by Chiyoda, and to newly install and add earthquake and tsunami reinforcement to gas supply facilities for thermal power plants,” stated the company.

ABB, the Swiss-Swedish power and systems company, said it was awarded a key contract for the Mozambique LNG export project in southeast Africa being developed by French energy major Total.

Chiyoda Corp., one of the leading global LNG engineering companies, has been awarded the design development and engineering contract for a new Floating, Storage and Regasification and Power Generation (FSRP) project in LNG exporting nation Papua New Guinea where a plant expansion is still pending.

The US Federal Energy Regulatory Commission has granted a request by the Golden Pass LNG export project being built on the Sabine-Neches Waterway in Texas by Qatar Petroleum and ExxonMobil to change the ownership status of pipeline assets.

Sempra Energy said the third liquefaction Train at the Cameron LNG export plant at Hackberry in Louisiana has begun production.

Commercial operations for Train 3 under Cameron LNG's tolling agreements now remain on track to begin in the third quarter of 2020.

Cameron LNG achieved commercial operations of Train 1 and Train 2 in August 2019 and February 2020 respectively.

Sempra Energy noted that its mission was still to be the premier North American LNG infrastructure company by providing natural gas producers with access to global markets.

Sempra LNG owns a 50.2 percent interest in Cameron LNG, now ramping up to production of 12 million tonnes per annum, or 1.7 billion cubic feet per day of natural gas.

Three other projects are planned, the expansion of Cameron LNG, the construction of the Port Arthur LNG plant in Texas and the Costa Azul facility on the Pacific Coast of Mexico.

“Congratulations to the entire Cameron LNG team for reaching this last major milestone toward full commercial operations for Phase 1 of this critical energy infrastructure facility,” said Justin Bird, Chief Executive of Sempra LNG.

“We look forward to the completion of this world-class LNG facility that will be an outlet for exporting abundant US natural gas to world markets,” added Bird.

“Sempra LNG is proud of the thousands of engineering and construction jobs and millions of tax revenues the project has provided to Southwest Louisiana,” he stated.

“As the construction phase of the project concludes with a remarkable record of over 88 million hours without a lost time incident, we are confident in Cameron LNG's commitment to operating safely and continuing to support the local economy and community that has welcomed us since day one,” he said.

Cameron LNG is jointly owned by affiliates of Sempra LNG, French major Total, Japanese trading house Mitsui & Co. and Japan LNG Investment, a joint venture involving Mitsubishi Corp. and Nippon Yusen Kabushiki Kaisha (NYK Line).

Japanese LNG engineering firm Chiyoda Corp. is part of the construction joint along with McDermott International of the US.

“I applaud the hard work and commitment of the entire joint venture project team whose focus on safety and delivery during this dynamic time brought Train 3 to the state of producing LNG,” said Mark Coscio, McDermott's Senior Vice President for North, Central and South America.

“The teamwork and diligence they have placed on safety and health as we navigate through the current Covid-19 pandemic has enabled us to continue our operations and deliver the project,” added Coscio.

McDermott and Chiyoda have provided the engineering, procurement and construction for the Cameron LNG project since the project's initial award in 2014.

Royal Dutch Shell said all conditions had been met for its final investment decision (FID) on a new LNG processing unit at Nigeria LNG, a project known as the Train 7 expansion.