Technip-Chiyoda JV Scoops $4 Billion Qatar Contract for World's Largest LNG Trains

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Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). After some weeks of 'no comment' it has been confirmed that a joint venture between Technip (NYSE:TKP) (Paris, France) and Chiyoda (Tokyo:6366) (Japan) has been awarded a $4 billion contract to construct the world's two largest LNG trains. The contract was awarded by Qatar Liquefied Gas Company (Doha, Qatar) and will see the two trains, each designed to produce 7.8 million tons of LNG a year, commissioned in 2007. The bidding for the Qatargas II project was between the Technip-Chiyoda JV and a consortium that comprised of JGC Corp (Tokyo:1963) and Halliburton (NYSE:HAL) (Houston, Texas). Japanese sources estimate that Chiyoda's share of the contract could be worth $2.4 billion.

The trains will be situated at a site known as Qatargas at Ras Laffan Industrial City where a venture between Qatar Petroleum and ExxonMobil (NYSE:XOM) (Irving, Texas) already has three trains operating that produce a total of around 8 million tons of LNG a year. The new trains will treble this output. The gas feed will cone from Qatar's major offshore North field.

Parallel with these LNG production developments, South Hook LNG Terminal Company in November awarded a $750 million lump sum turnkey contract to CB&I (NYSE:CBI) (Amsterdam, Netherlands) for a grassroots LNG terminal to be built at Milford Haven in Wales on the UK west coast. Qatar Terminal Company and ExxonMobil Qatargas II Terminal Company own South Hook. The Qatargas II LNG trains will supply the terminal. For related news item see April 7, 2004 ExxonMobil Partners Up for a New LNG Receiving Terminal in the UK

The scope of CB&I's work on the project covers the EPC (engineering, procurement and construction) of the complete facility, 7.8 million tons of LNG will be the baseload feed from the first phase of Qatargas II. CB&I will build a ship unloading system, three full 155, 000 cubic meter LNG storage tanks, a regasification and send out system and the major refurbishment of an existing jetty to allow berthing for LNG tankers. Commissioning of the terminal is set for the fourth quarter of 2007.

In 2001, the Technip-Chiyoda JV won a $133 million dollar contract to expand the existing Ras Laffan LNG plant. The EPC contract involved the execution of detailed engineering, procurement and construction for the debottlenecking of the three LNG process trains. Key process equipment such as compressors and turbines has been replaced to increase production capacity by about 33%.

More projects are on Technip's horizon in Qatar (and in other Gulf and Mid-East states). Bidding is on for a $1 billion petrochemical plant. ABB (NYSE:ABB) (Zurich, Switzerland), Technip Linde and The Shaw Group (NYSE:SGR ) (Baton Rouge, Louisiana) are all in the hunt for the contract to build an ethylene cracker, which Qatari officials say will be awarded in October 2005.

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