Cheniere, Bechtel Sign Sabine Pass Contract (USA)

Cheniere Energy Partners said that its subsidiary, Sabine Pass Liquefaction and Bechtel Oil, Gas and Chemicals have entered into a lump sum turnkey contract for the engineering, procurement and construction of the third and fourth liquefaction trains to be constructed adjacent to the Sabine Pass LNG terminal located in Cameron Parish, Louisiana.

Sabine Liquefaction intends to give Bechtel a notice to proceed (NTP) with construction for the third and fourth liquefaction trains upon achieving acceptable financing arrangements and making a final investment decision.  Construction for the third and fourth trains is expected to begin in the first half of 2013.  Sabine Liquefaction issued NTP to Bechtel and commenced full construction for the first two liquefaction trains in August 2012.

The liquefaction trains are being designed, constructed and commissioned by Bechtel using the ConocoPhillips Optimized Cascade® technology, a proven technology deployed in numerous LNG projects around the world.  Nominal capacity for each train will be approximately 4.5 million tonnes per annum.

The liquefaction trains will be built next to the existing facilities at the Sabine Pass LNG terminal, which include five tanks with storage capacity of 16.9 billion cubic feet equivalent (“Bcfe”), two docks that can handle vessels up to 265,000 cubic meters and vaporizers with regasification capacity of 4.0 billion cubic feet per day (Bcf/d).  Sabine Liquefaction has entered into four long-term, 20-year sale and purchase agreements that in aggregate represent approximately 90 percent of the nominal capacity of the four liquefaction trains.

Operations for the first liquefaction train are expected to commence as early as 2015, with each liquefaction train thereafter coming on line on a staggered basis.

The total contract price of the Trains 3&4 EPC Contract is approximately $3.8 billion.  Total expected costs for the third and fourth liquefaction trains before financing costs are estimated to be between $4.5 billion and $5.0 billion, including an estimate for owner’s costs and contingencies.

“We look forward to our continued collaboration with Bechtel on the development and construction of our liquefaction trains at Sabine Pass.  Bechtel built our existing LNG terminal on time and on budget and has an extensive track record in building some of the largest LNG export production facilities in the world,” said Charif Souki, Chairman and CEO.  “Bechtel has started construction on our first two liquefaction trains, which are expected to be completed ahead of the EPC schedule, and we expect to commence construction on the third and fourth liquefaction trains in the first half of 2013.”

In addition, Sabine Liquefaction recently announced that it is developing a fifth and sixth liquefaction train.  Sabine Liquefaction has entered into a sale and purchase agreement with Total Gas & Power North America, Inc. (“Total”) under which Total has contracted for approximately half of the expected LNG production capacity of the fifth liquefaction train and based on indications of interest expects to contract the remaining capacity in due course.  Sabine Liquefaction has begun working with Bechtel on the preliminary engineering for a fifth and sixth train and expects to commence the regulatory process in the first half of 2013.

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LNG World News Staff, December 21, 2012; Image: Cheniere