Dive Brief:
- The joint venture of KBR, Inc, and South Korea-based SK Engineering & Construction will build Magnolia LNG, LLC’s new $4.35 billion LNG liquefaction facility near Lake Charles, LA, the Houston Business Journal reported. The contract includes up to four LNG production trains, each able to produce two million tons or more per year.
- The contract also includes two 160,000-cubic meter containment storage tanks, LNG marine and ship-loading facilities and necessary infrastructure. Revenue-sharing payments, based on LNG production milestones, will go to the contractor for 15 years following the commercial start date of each production train.
- The new facility has a 20-year binding pipeline capacity agreement with Houston-based Kinder Morgan Louisiana Pipeline, LLC, and will use feed gas from that line.
Dive Insight:
Construction giant KBR, based in Houston, has been in the midst of a restructuring effort to sell off divisions and narrow its focus to hydrocarbons and international government services. Earlier this month, KBR announced plans to sell its transportation, water/wastewater and aviation division, Infrastructure Americas, to design firm Stantec for $19 million.
The company's positive third-quarter earnings offered a sign the restructuring effort is working. So far, according to the Houston Chronicle, KBR has slashed $150 million of its $200 million goal, which it hopes to reach by the end of 2016.
This massive project adds to the recent emergence of Louisiana as a "hotbed of LNG activity," the Business Journal noted.
