Cheniere Energy, Inc. ("Cheniere") (NYSE MKT: LNG) announced today that its wholly owned subsidiary, Corpus Christi Liquefaction, LLC ("Corpus Christi Liquefaction") and Bechtel Oil, Gas and Chemicals, Inc. ("Bechtel") have entered into two lump sum turnkey contracts for the engineering, procurement and construction ("EPC") of LNG trains and related facilities being developed near Corpus Christi, Texas (the "Corpus Christi Liquefaction Project"). The Corpus Christi Liquefaction Project is expected to be constructed in stages, with each LNG train commencing operations on a staggered basis. Work under the EPC contract is expected to commence in 2014, subject to Corpus Christi Liquefaction reaching a positive final investment decision ("FID"). Operation of the first LNG train is expected to commence in 2018.
The Corpus Christi Liquefaction Project includes up to three LNG trains, each with a design production capacity of approximately 4.5 million tonnes per annum ("mtpa") of LNG, three LNG storage tanks with capacity of approximately 10.1 billion cubic feet equivalent ("Bcfe"), and two berths that can accommodate vessels with capacity of up to 267,000 cubic meters. The Stage 1 EPC contract includes two LNG trains, two tanks, one complete berth and a second partial berth. The Stage 2 EPC contract includes one LNG train, one additional tank and completion of the second berth. The LNG trains are being designed, constructed and commissioned by Bechtel using the ConocoPhillips Optimized Cascade® technology; a proven technology deployed in numerous LNG projects around the world, including the four LNG trains currently under construction in Cameron Parish, Louisiana, by one of Cheniere's subsidiaries, Sabine Pass Liquefaction, LLC.
The contract price of the Stage 1 EPC contract is approximately $7.1 billion and the contract price for the Stage 2 EPC contract is approximately $2.4 billion. Total expected costs for the three LNG trains and the related facilities before financing costs are estimated to be between $10.5 billion and $11.0 billion, including an estimate for owner's costs and contingencies.
"We have selected Bechtel as our EPC contractor for our next LNG export project being developed near Corpus Christi, Texas. Bechtel has an extensive track record in building some of the largest LNG export production facilities in the world and is the EPC contractor on our LNG export project at the Sabine Pass LNG terminal. Bechtel built our existing regasification facilities at the Sabine Pass LNG terminal on time and on budget and is ahead of schedule on the four LNG trains currently under construction," said Charif Souki, Chairman and CEO. "Our Corpus Christi Liquefaction Project is now fourth on the U.S. DOE's order of precedence for non-FTA LNG export approvals and is waiting to receive a FERC scheduling notice. We recently announced the first LNG sale and purchase agreement for the Corpus Christi Liquefaction Project with Pertamina for approximately 0.8 mtpa and expect to enter into additional SPAs in due course. We expect to reach FID for the Corpus Christi Liquefaction Project in 2014."
Bechtel is one of the world's premier engineering, construction and project management companies. Bechtel is privately owned, headquartered in San Francisco, CA, and has nearly 53,000 employees. Bechtel was founded in 1898 and has worked on more than 22,000 projects in 140 countries on all seven continents. Since the inception of the LNG industry over 40 years ago, Bechtel has built about a third of the world's liquefaction capacity.
