Dive Brief:
- LNG Canada, Fluor Corp. announced Tuesday, has awarded the joint venture of Fluor and Japan-based JGC Corp. a $14 billion contract to build a liquefied natural gas export facility in Kitimat, British Columbia, for LNG Canada. The deal will see Fluor book an $8.4 billion share of the contract, with JGC's portion valued at $5.6 billion.
- Fluor and JGC will provide engineering, procurement, fabrication and construction services to the project, which includes building two trains, or independent liquefaction units, with the possibility of a future expansion to four. The plant, according to JGC, will operate at the lowest carbon-intensity of any large-scale LNG facility in the world. LNG Canada — a Shell-led joint venture that also includes Petronas, Mitsubishi Corp. and Korea Gas Corp. — expects to start processing at the export terminal in the mid-2020s. Site work is scheduled to start before the end of the year.
- Fluor estimated that the project will employ more than 4,500 workers during peak activity, with the hiring of locals a top priority, followed by British Columbian then Canadian residents. Both companies have extensive experience in the energy sector, with JGC having built more than 30% of the world's LNG plants.
Dive Insight:
Large natural gas projects, including both plants and pipelines, create opportunities for workers outside of major metros as construction often takes place in remote areas. That can also be a limiting factor for contractors who might find it difficult to tap the necessary number of workers, especially given the current labor shortage.
In fact, skilled employees are so scarce that during a recent work stoppage on the Atlantic Coast Pipeline from West Virginia to North Carolina, project officials reportedly elected to keep employees on the payroll rather than laying them off so that they would not be lost to competitors. In contrast, during a forced August work stoppage, the Mountain Valley Pipeline, which will run from West Virginia to Virginia laid off approximately 50% of its workers.
Nevertheless, contractors negotiated billions of dollars' worth of LNG projects this summer, and global engineering and construction firm Bechtel figured into two of the biggest. San Diego company Sempra Energy chose Bechtel to help develop its up to $9 billion LNG plant in Port Arthur, Texas, by providing engineering, procurement, construction and commissioning services for the project. Just like the LNG Canada project, the Port Arthur facility will also include two liquefaction trains, as well as feed gas pre-treatment facilities, natural gas liquids and refrigerant storage, up to three LNG storage tanks and two marine berths.
Bechtel is also starting construction on Cheniere Energy's $11 billion Corpus Christi Liquefaction facility in Corpus Christi, Texas.
