CIMC and China Chengda Engineering Win Bid for LNG Terminal Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--The consortium formed by TGE Gas Engineering GmbH (Bonn, German), a subsidiary of China International Marine Containers (Group) Company Limited (CIMC) (Beijing) (SHE:000039), and China Chengda Engineering Company Limited (Beijing) won the engineering, procurement and construction bid for the Zhejiang liquefied natural gas (LNG) terminal project, CIMC announced November 24.

The final value of the contract will be in the range of $175 million to $205 million and will be fulfilled within 60 months of the start date.

The LNG terminal project is located in Ningbo in China's Zhejiang province. The project will be funded and operated by CNOOC Zhejiang Ningbo LNG Company Limited (Ningbo), a subsidiary of CNOOC Limited (NYSE:CEO) (Beijing). In case TGE fails to perform the contract, the parent company will face penalties of about $205 million, according to CIMC.

Winning the contract will actively promote the company's expansion and growth in the energy and chemical equipment sectors. It is expected to bring $175 million to $205 million of income to the company in the next three years. However, as the construction and commissioning of the project will be as long as 36 months, prices of raw materials could fluctuate, leading to some risk.

Headquartered in Bonn, Germany, TGE was established from the former Tractebel Gas Engineering Gmbh in May 2006. CIMC became the majority shareholder (60%) in September 2008 after Tractebel's initial public offering of the company on the London Stock Exchange in May 2008. TGE is one of the world's leading contractors for bulk storage of refrigerated gases (LNG, liquefied petroleum gas, ethylene, propylene), with offices in Germany, Belgium, the U.K., China, India and Slovenia.

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