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CB&I and Chiyoda Win $6 Billion EPC Award for Louisiana LNG

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Sempra Energy
Louisiana LNG site expansion would allow natural gas exports overseas.
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As some analysts predicted, Texas-based CB&I and Japan’s Chiyoda International Corp. have won the estimated $6-billion engineer-procure-construct contract for the Cameron liquid natural gas export project near Lake Charles, La.

Last month, the project had received conditional U.S. Dept. of Energy authorization to export domestic LNG to countries that don’t have free-trade pacts with the U.S., CB&I said in a March 17 announcement

The project includes construction of three separate liquefaction systems, a 160,000-cu-meter full-containment LNG storage tank, a compressor station and 21 miles of 42-in.-dia. pipeline.

CB&I says the project will create about 3,000 on-site jobs, as well as hundreds more at the firm’s fabrication facilities in Louisiana and in engineering and project management support.

CB&I's CEO Philip K. Asherman said work will employ "a large number of engineering and construction craft workers, and we feel fortunate to be able to contribute to both the growth in jobs and the infrastructure in the state."

CB&I also announced a $625-million contract from Bechtel Corp. to provide structural, mechanical and piping construction work on the Chevron-operated offshore Wheatstone LNG Project in western Australia, and a $100-million award for a new propane dehydrogenation unit in Mont Belvieu, Texas.

CB&I ranks at No. 65 on ENR's list of the Top 250 Global Contractors, with $4.4-billion in 2012 global revenue. The firm acquired The Shaw Group in 2013.

Chiyoda International's parent Chiyoda Corp. ranks at no. 102 on that list, with $2.8 billion in global revenue in 2012.

Jamie Cook, E&C sector analyst for Credit Suisse, said in a March 17 note that the award was not a surprise to the market because major competitor Fluor Corp. “seemed to back away from Cameron a bit during its [fourth quarter 2013] earnings call, appearing less confident in winning.”

Fluor was awarded in January a role on the estimated $15-billion Kitimat LNG facility project in British Columbia that includes front-end engineering completion and an eventual EPC contract.

The Cameron project, still subject to a final investment decision, would have Sempra Energy as its majority owner.

"The EPC companies we've selected have the qualifications to build large liquefaction and energy infrastructure projects as well as a firm commitment to support our project's neighbors in southwest Louisiana," said Sempra LNG President Octavio M. Simoes.

Cook expects more LNG awards in North America and in Mozambique.

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