Shell-led LNG Canada looking for new lead contractor

The Hague-based LNG giant Shell and its partners in the LNG Canada consortium are looking for a new lead contractor for the delayed multi-billion export project in Kitimat, British Columbia.

“LNG Canada is in the midst of undertaking a new competitive process with a prequalified group of companies to identify a construction contractor as its prime contractor to manage all of the design and construction work required to build the LNG Canada facility,” the company said in a statement.

The joint venture, whose stakeholders also include PetroChina, Mitsubishi Corporation and Kogas, initially awarded the contract in 2014 to a consortium of engineering firms called CFSW LNG Constructors. CFSW LNG Constructors is a partnership of Chiyoda, Foster Wheeler, Saipem and WorleyParsons.

On the new bidding process, LNG Canada said it “does not discuss specifics of commercial agreements related to the LNG Canada project, and for reasons of confidentiality, does not release the names of the companies that will be bidding on the project at this stage.”

According to media reports, LNG Canada’s announcement follows a surprise move by CFSW LNG Constructors to cancel a tender for the fabrication of LNG production modules for the export project.

The LNG export project would initially consist of two 6.5 mtpa LNG production trains with an option to expand the facility with additional two trains.

To remind, LNG Canada delayed its final investment decision on the C$40 billion (US$30 billion) LNG export development twice this year citing global industry challenges and capital constraints as main reasons.

LNG Canada had originally planned to make its FID this year, but in July the consortium said that it postponed that deadline indefinitely.

“A delay in the final investment decision for the LNG Canada project, due to global industry market challenges provides the opportunity for LNG Canada to return to market and rebid the construction contract in an effort to ensure the project remains cost competitive and affordable,” LNG Canada said.

LNG World News Staff