McDermott Adds Mozambique Rovuma Project to LNG Work

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land, Texas)

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Summary

A consortium led by a subsidiary of McDermott International has received a letter of intent from owner ExxonMobil to proceed with pre-FID work on the Rovuma LNG project in Mozambique.

New LNG Work in Mozambique

Engineering and construction firm McDermott has added another liquefied natural gas (LNG) production project to its portfolio, although the project, Exxon Mobil Corporation's Rovuma LNG project in Mozambique, remains in an early stage of development with a final investment decision (FID) expected later this year. This latest Mozambique project joins other LNG projects in McDermott's portfolio, notably large projects in North America and another in Mozambique.

While an FID has not been made on the Rovuma project, ExxonMobil is nevertheless getting the wheels turning, authorizing the McDermott consortium in a letter of intent to perform limited engineering and procurement services. The consortium, led by McDermott Energy Solutions (UK), also includes Saipem, Daewoo Engineering & Construction, and China Petroleum Engineering & Construction Corporation and is known as the SMDC joint venture. A McDermott press release said the company would begin engineering of the inside battery limits (ISBL), including the liquefaction modules.

The Rovuma plant will feature 12 liquefaction modules capable of producing more than 18 million tons of LNG per year. ExxonMobil aims to begin production from the plant by 2031.

McDermott in TotalEnergies' Mozambique LNG Project

McDermott is an integral part of Mozambique's other blockbuster LNG project, which has experienced delays over the years because of local insurgencies: TotalEnergies' Mozambique LNG projectt, which will share some infrastructure with the ExxonMobil plant. McDermott is participating in front-end engineering design work and is a key part of the consortium that will be responsible for engineering, procurement and construction (EPC) work. The project was on hold for years as an Islamist insurgency in the area caused TotalEnergies to evacuate staff and suspend construction. Early construction has been ramping up since the beginning of this year, with an aim to have the plant producing by 2029 or 2030.

The two LNG projects in Mozambique represent the largest investments in the country's history. Industrial Info Resources data find the total investment value of the two LNG projects in Mozambique add up to more than US$35 billion.

McDermott's North American LNG Work

Most of McDermott's current LNG construction is located in North America, on both the U.S. Gulf Coast and the Pacific Coast of British Columbia. The first of these projects up for completion is another ExxonMobil project, the second production train at ExxonMobil and QatarEnergy's Golden Pass LNG terminal in Sabine Pass, Texas. The initial train and supporting infrastructure were completed earlier this year, and this is expected to be followed by completion of the second 6 million-ton-per-annum (MTPA) train within the coming the months, and a third train early next year, bringing the facility's production capacity to 18 MTPA.

McDermott's other big U.S. LNG project is Venture Global LNG's upcoming Plaquemines development in Louisiana. An initial nine production modules capable of producing around 13.6 MTPA could be completed toward the end of this year, paving the way for a potential doubling of production by early 2028, when an already underway expansion is completed. McDermott is taking a lead role in constructing the plant's 800,000 cubic meters of storage tanks.

McDermott is taking the primary EPC role in Canada's Pacific Coast LNG ambitions, heading up construction of the Woodfibre LNG development in Squamish, British Columbia. The smaller Woodfibre project will join the much-larger Shell-led LNG Canada plant in the province and will further Canada's ability to export LNG from the Pacific coast, something the U.S. hasn't achieved. BP has a purchase agreement in place for the plant's entire 2.1 million metric tons per year of output.

Key Takeaways

• McDermott International has added a second LNG project in Mozambique to its portfolio with the go-ahead for pre-FID work on ExxonMobil's Rovuma project.
• McDermott is the primary shareholder in the consortium selected by ExxonMobil for the work, which also includes Saipem, Daewoo Engineering & Construction, and China Petroleum Engineering & Construction Corporation and is known as the SMDC joint venture.
• While the Mozambique projects are in an early stage, McDermott is much further along on LNG projects in the U.S. and Canada.

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