CB&I's 10 Top-Valued Projects Fueled by Massive LNG Projects on U.S. Gulf Coast

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Researched by Industrial Info Resources (Sugar Land, Texas)--After years of red ink, engineering, procurement and construction (EPC) leader Chicago Bridge & Iron Company N.V. (NYSE:CBI) (CB&I) (The Hague, Netherlands) is preparing to be acquired by McDermott International Incorporated (NYSE:MDR) (Houston, Texas). The deal has cleared all regulatory hurdles and is on track to close before the end of the current quarter, so it's worth taking a look at what McDermott will be picking up. Industrial Info is tracking more than $108 billion in active projects involving CB&I, about 70% of which is attached the 10 highest-valued.

Click on the image at right for a graph detailing active CB&I-related projects by industry.

All top 10 projects are for facilities that will produce liquefied natural gas (LNG), a rapidly growing product that is expected to be a windfall for U.S. energy in the coming years. U.S. LNG export capacity is expected to rise from 3.6 billion cubic feet per day (Bcf/d) today to 10.2 Bcf/d by the end of 2020. But the single largest LNG project involving CB&I is far outside U.S. borders: Anadarko Petroleum Corporation's (NYSE:APC) (The Woodlands, Texas) proposed, $15 billion LNG Liquefaction Plant in Palma, Mozambique. The project includes two trains with a total capacity of 12.88 million tons per annum; two storage tanks, each with a 180,000-cubic-meter storage capacity; and a condensate storage tank with an offloading jetty. For more information, see Industrial Info's project report.

CCJV, a joint venture between an affiliate of CB&I and Chiyoda International Corporation, is at work on the second-highest-valued project: Sempra Energy's (NYSE:SRE) (San Diego, California) $10 billion Cameron LNG Liquefaction Plant near Hackberry, Louisiana, which is expected to be completed and begin production in less than a year. The complex, which has been under construction since late 2014, would comprise three liquefaction trains, each with a capacity of 5 million metric tons per year; a 160,000-cubic-meter LNG storage tank; and related facilities. For more information, see Industrial Info's project report.

Tolling agreements with GDF Suez, Mitsubishi Corporation and Mitsui & Company Limited have been signed for the total yearly capacity for 20 years. Last month, TransCanada Corporation (NYSE:TRP) (Calgary, Alberta) announced it had completed the Cameron Access natural gas pipeline, which will feed the Cameron LNG facility. For more information, see March 16, 2018, article - Pipeline Completed for Cameron LNG Facility in Louisiana.

Texas is home to two massive LNG complexes that account for the remaining eight highest-valued projects involving CB&I. The first began construction in 2015 and is slated to wrap up late next year: Phillips 66's (NYSE:PSX) (Houston) Freeport LNG Liquefaction and Export Plant in Quintana. The facility has three production trains under construction, each of which will produce 4.6 million tons per year of LNG. Tolling agreements have been signed for with Osaka Gas and Chubu Electric for the $5.5 billion first train; BP plc (NYSE:BP) (London, England) for the $5.5 billion second train; and Toshiba Corporation (Tokyo, Japan) and SK E&S (Seoul, South Korea) for the $4.5 billion third train.

A $4.5 billion fourth train also has been proposed by Phillips 66 that would produce 5 million tons per year of LNG. If approved, construction would not begin for at least a year following the completion of the first three units. Last month, Freeport LNG filed an application with the U.S. Department of Energy for authorization to export 262.8 billion cubic feet of LNG from Train 4 over 20 years to countries with and without a Free Trade Agreement with the U.S. For more information, see Industrial Info's project reports for Train 1, Train 2, Train 3 and Train 4.

In a press release announcing preliminary results first-quarter 2018, CB&I noted "excellent operating performance" at the Cameron and Freeport LNG projects, which are 84% and 82% complete, respectively. Freeport LNG also signed a memorandum of understanding last week with Lithuanian trader UAB Lietuvos Duju Tiekimas to negotiate a possible future supply of LNG to Lithuania and other Baltic states.

The other major project in Texas is NextDecade Corporation's (NASDAQ:NEXT) (The Woodlands, Texas) proposed Rio Grande LNG liquefaction and export terminal at the Port of Brownsville, which is designed to produce 36 million tons per annum of LNG from eight trains, each with a 4.5 million-tonne-per-annum capacity. The trains are to be built in four phases, each with two trains; the $8 billion first phase would kick off in the summer of 2019, the $8 billion second phase in the summer of 2020, the $8 billion third phase in the summer of 2021 and the $8 billion fourth phase in the summer of 2022. Each phase would take about four years to complete.

Rio Grande LNG took a step forward earlier this year when CB&I completed a front-end engineering and design (FEED) update package, which identified cost-reduction and value-improvement initiatives, according to a NextDecade press release. NextDecade and CB&I plan to execute a binding lump-sum turnkey agreement in before the end of this quarter. The U.S. Coast Guard also helped the project along in January; for more information, see January 22, 2018, article - South Texas LNG Project One Step Closer with Coast Guard Approval, and Industrial Info's project reports on Phase I, Phase II, Phase III and Phase IV.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at https://www.industrialinfo.com/.