LNG

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.

QatarEnergy said that as part of its LNG expansion project it awarded the engineering, procurement, construction and installation (EPCI) contract for the offshore portion of its North Field feed-gas project to Houston, Texas-based firm McDermott Inc.

The expansion project will increase the state of Qatar’s LNG production capacity from 77 million tonnes per annum to 126 MTPA, through the North Field East (NFE) and North Field South (NFS) development ventures with first LNG expected in 2025.

QatarEnergy explained that the scope for the contract includes 13 normally unmanned wellhead platforms topsides (eight for NFE and five for NFS), in addition to various connecting pipelines and the shore approaches for the NFE pipelines, beach valve stations and buildings.

The Qataris added that the jackets and the pipelines for the NFS Project will be subject to a separate tender which is expected to be awarded in the first half of 2022.

“The award of this major EPCI contract is a momentous milestone that demonstrates QatarEnergy’s commitment to delivering our LNG expansion projects on time and to ensure the significant additional global LNG demand is catered for in a timely manner,” said Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs and the President and chief Executive of QatarEnergy.

“This contract also reinforces our excellent relationship with McDermott,” added Al-Kaabi.

“We are confident that the effective collaboration between QatarEnergy, Qatargas and McDermott will result in the safe and successful delivery of the project according to plan,” stated the CEO.

Al-Kaabi added that the QatarEnergy affiliate Qatargas, which has a proven history of delivering such major projects, has been entrusted with executing this mega project on behalf of QatarEnergy.​

“I would like to take this opportunity to express my thanks and appreciation to Sheikh Khalid bin Khalifa Al-Thani, the CEO of Qatargas, and to both the Qatargas and QatarEnergy teams for their significant efforts and contributions that resulted in the successful and timely execution of this contract,” Al-Kaabi declared.

The scope of the first phase of the expansion at the Ras Laffan production complex involves an additional four Trains, each with 8.0 MTPA of output.

Qatar has the southern portion of the North Field in Gulf waters and the other part is under the jurisdiction of neighbouring Iran.

JGC Holdings Corp., the leading Japanese LNG and energy engineering firm, has appointed the former executive at KBR of the US, Farhan Mujib, as the company’s new Senior Executive Vice President for JGC’s overseas engineering, procurement and construction business.

Freeport LNG Chief Executive Michael Smith said he was hopeful of signing sufficient deals with buyers as the Quintana Island facility in Texas slowly expands, though suggested the second wave of plants may face difficulties 

However, Smith stated in an interview with pricing agency S&P Global Platts that the market had completely changed in 2019.

The Freeport project comprises four Train in all and the plant shipped its first cargo from the second liquefaction Train in mid-December 2019.

The cited a list of challenges, including record low prices and weaker than expected demand in Asia, oversupply concerns and the recent coronavirus outbreak in China.

He said this had created a perfect storm of headwinds for producers looking to construct new liquefaction plants or additional processing Trains.

“I don't think there's going to be a lot,” Smith said of additional sanctioned US capacity. 

“The margins for everyone have come down,” he stated.

More than a dozen US developers are pursuing projects for new plants or additional production capacity and have yet to announce positive final investment decisions.

The first phase construction at Freeport will see the building of one more Train, bringing to total to three and 15 million tonnes per annum of output.

The original Freeport terminal was completed in 2008 as an import facility with one berth and two storage tanks, each of 160,000 cubic metres capacity.

A second loading berth and a 165,000 cubic metres capacity full containment LNG storage tank have been added. The Train 4 project will be the second phase of construction.

“We don't have anything signed up. Until we do have something signed, no one is going to hear from us,” said Smith about the Train 4 project at his Texas plant.

Freeport's current target is for a final investment decision on Train 4 by mid-2020 and a start-up scheduled for 2024.

“We believe once we have the requisite capacity sold to reach our financing hurdles, we can close a transaction within a six-week time period, eight on the outside,” explained the CEO.

Smith declined in the interview with S&P Global to specify what range of prices Freeport was discussing with prospective buyers, though he said it was similar to the deals announced by other developers.

“We don't believe we are wasting our time,” said Smith. However, he stated that circumstances had changed since the first wave buildout of the six US plants currently operating. 

Freeport LNG shipped its first cargo from the second liquefaction Train at the export facility on Quintana Island in Texas.

Qatar Petroleum said the fabrication has been completed of the first two steel tubular structures required for offshore facilities as part of its North Field Expansion (NFE) project to increase Qatari output in a first stage to 110 million tonnes per annum of LNG from the current 77 MTPA.

The delayed US Cameron LNG export project led by Sempra Energy has been boosted by the long-awaited introduction of feed-gas to the first liquefaction Train by engineers McDermott and Chiyoda Corp. of Japan.

McDermott International, the energy and LNG engineering company, posted fourth-quarter earnings seriously impacted by $2.2 billion in charges and other items related to the Cameron LNG and Freeport LNG projects in Louisiana and Texas and the Calpine gas-fired power venture in Pennsylvania.

McDermott International, the energy and liquefied natural gas project engineer, has completed a strategic review of its portfolio and has decided to spin-off and sell its LNG tanks business and its US pipe fabrication unit.