Kiewit pegged for $5B Louisiana LNG export terminal

Dive Brief:

Venture Global LNG Inc. announced Friday that it has received U.S. Federal Energy Regulatory Commission approval for a $5 billion liquefied natural gas export terminal in Calcasieu Pass, Louisiana, clearing the way for construction to begin immediately. FERC also approved the company's associated TransCameron Pipeline in Cameron Parish, Louisiana.
Venture selected Kiewit Louisiana Co. as the engineering, procurement and construction contractor in December. Under the turnkey EPC contract, Kiewit will design, engineer, construct, commission, test and guarantee the facility, which is expected to begin operation in 2022.
The terminal, which will be able to produce as many as 12 million tons of LNG products per year, Bloomberg reported, will be equipped with mid-scale, modular, prefabricated liquefaction trains — liquefaction and purification plants — rather than the larger trains typically seen in such projects.

Dive Insight:

Worldwide, there are 27 LNG projects collectively worth $336 billion waiting for approval, according to Bloomberg, and 15 of those are in the U.S. The Calcasieu Pass project is the third major project since 2015 to get the go-ahead for construction, joining Shell’s LNG Canada facility, approved in October 2018, and ExxonMobil Corp.’s $10 billion Golden Pass project in Sabine Pass, Texas, which was approved earlier this year.

The joint venture of Fluor and Japan-based JGC Corp. will build LNG Canada’s export terminal under a $14 billion EPC contract. The project will provide work for more than 4,500 construction workers during peak activity, and the JV said it will make local hiring a priority.

McDermott International announced that it has secured a “mega contract” for the Golden Pass project and would be providing EPC services along with JV partners Chiyoda International Corp. and Zachry Group. McDermott did not reveal the exact value of its contract, but defines a mega contract as one that exceeds $1 billion. It will take approximately 9,000 construction workers five years to build out the Texas LNG export facility.

At a September conference in Barcelona, contractors like Fluor and Bechtel told LNG developers that they needed to be more realistic about the cost estimates they use when planning their projects in the U.S. Always using the lowest bid is not the smart path, a Bechtel executive cautioned, adding that collaboration and innovation between contractors and developers will result in the best possible outcome.

Bechtel has the $15.2 billion EPC contract for Tellurian’s $27.5 billion Driftwood LNG export terminal on the Calcasieu River near Lake Charles, Louisiana. The project received its draft environmental impact statement (EIS) from FERC in September and is awaiting its next approvals.