LNG Canada awards engineering, procurement and construction contract

Contract for Kitimat project is conditional on final investment decision

LNG Canada has awarded a multi-billion engineering, procurement and construction contract.

LNG Canada announced April 27 that it has selected Fluor Corporation and Japan’s JGC Corp. to design and build LNG Canada’s liquefied natural gas plant in Kitimat.

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As reported earlier this week, Nikkei Asian Review had reported the contract to be worth US$14 billion. LNG Canada has not confirmed that figure.

The awarding of the contract is still conditional on LNG Canada’s partners – Royal Dutch Shell, PetroChina, Kogas and Mitsubishi Corp. – making a final investment decision.

That decision is expected this year. However, LNG Canada and other LNG developers are still waiting to hear if the federal government will exempt LNG modules from a 45% duty on fabricated steel products imported from China, south Korea and Spain.

“The exact timing of the final investment decision is up to the joint venture participants to make, and they will weigh their decision against a number of criteria, including project competitiveness, how the LNG Canada project fits within their existing portfolio of projects and investments, and available capital, amongst others,” LNG Canada spokesperson Susannah Pierce said in a press release.

In total, the LNG Canada project would represent a total investment of about $40 billion, when a new natural gas pipeline – Coastal GasLink – and upstream natural gas assets are included.

“JGC and Fluor will be responsible for directly hiring the majority of the thousands of skilled workers required during the five-year construction period,” Pierce said.

“The commitments LNG Canada has made to ensure the project hires locally and within British Columbia, prior to hiring from the rest of Canada, will be executed by the EPC. LNG Canada’s commitment to some positions being made available for apprentices – open equally to women and men – will also be delivered by the EPC contractor.”

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