EPC Contract Awarded for Mozambique LNG

A joint venture between McDermott, Saipem and Chiyoda, has reached full agreement for a contract with Anadarko Petroleum Corporation (APC) for the Mozambique Area 1 Liquefied Natural Gas (LNGLF) (LNG) Development, McDermott International (MDR) announced on Wednesday.

CCS JV’s project scope includes the onshore engineering, procurement and construction (EPC) for all components of the onshore LNG development, which includes two LNG trains with a total nameplate capacity of 12.88 million tonnes per annum (MTPA), plus the associated utilities and infrastructure. Previously, CCS JV provided front-end engineering design (FEED) services for this LNG development.

McDermott said its initial portion of the EPC contract award is approximately $2 billion.

McDermott and Saipem have established a new office in Milan, Italy, where a team from both companies will lead the project management, engineering and procurement in advance of sharing on-site construction management responsibilities. McDermott will perform engineering from both London and Gurgaon, India. Chiyoda will only provide advisory services for the joint venture. Work at the site is expected to commence when Anadarko issues a Notice to Proceed after it takes a Final Investment Decision (FID).

As the operator of Offshore Area 1, Anadarko is the primary project sponsor. Additional sponsors include ENH Rovuma Área Um, S.A, Mitsui E&P Mozambique Area1 Ltd., ONGC Videsh Ltd., Beas Rovuma Energy Mozambique Limited, BPRL Ventures Mozambique B.V., and PTTEP Mozambique Area 1 Limited.

To date, approximately 75 trillion cubic feet of recoverable natural gas has been discovered in the Offshore Area 1 – the equivalent of a 12 billion barrel oil field – about 40 kilometers offshore, in approximately 1,600 meters water depth.

Mozambique LNG is one of the first subsea developments in Mozambique. The wells to be tied directly to shore via a subsea gathering system capable of handling 2 billion cubic feet on natural gas per day.