USA: Cheniere Enters into Contract with Bechtel

Cheniere Energy Partners, L.P. announced today that its subsidiary, Sabine Pass Liquefaction, LLC, and Bechtel Oil, Gas and Chemicals, Inc. (Bechtel) have entered into a lump sum turnkey contract for the engineering, procurement and construction of the first two liquefaction trains at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana.  

Sabine Liquefaction is planning to construct liquefaction facilities capable of producing 9.0 million tonnes per annum (mtpa) of liquefied natural gas (LNG) in the first phase of its project and selling 7.0 mtpa of the production under long-term sales and purchase agreements (SPA).  To date Sabine Liquefaction has contracted half of such production under a long-term, 20-year SPA with customer BG Gulf Coast LNG, LLC, and will make a final investment decision upon contracting the remaining 3.5 mtpa.  Sabine Liquefaction intends to give Bechtel a notice to proceed with construction for the first phase upon achieving acceptable financing arrangements and receiving authorization to commence construction from the FERC.  Construction is expected to begin in 2012 with LNG exports expected to occur as early as 2015.

Bechtel will design, construct and commission two liquefaction trains using the ConocoPhillips Optimized Cascade® technology.  This is a proven technology deployed in several LNG projects around the world.  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).  Cheniere Partners anticipates that over 3,000 construction workers will be employed at peak construction and up to 100 permanent jobs will be created once the liquefaction facilities are operational.

The total contract price of the EPC Contract is $3.9 billion.  Total expected costs for the project before financing costs are estimated to be between $4.5 billion and $5.0 billion, including an estimated $0.6 billion to $1.0 billion for owner’s costs and contingencies.

“Bechtel was chosen to develop and construct our liquefaction facilities due to their extensive LNG capabilities and experience in building some of the world’s largest LNG production facilities.  Our trains are being designed with the best combination of efficiency, cost, and reliability, and with the turndown capability needed to provide flexible LNG delivery programs,” said Charif Souki, Chairman and CEO.  “We have worked with Bechtel in the past on the construction of our existing Sabine Pass LNG terminal, which was completed on time and on budget, and look forward to another successful project.”

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Source: Cheniere, November 14, 2011