Port Arthur LNG plant advances
Construction to start on export terminal
A joint venture of three energy service companies has landed a “mega contract” to build Exxon Mobil and Qatar Petroleum’s $10 billion Golden Pass LNG export terminal just south of Port Arthur.
Houston’s McDermott International, San Antonio’s Zachry Group and Japan’s Chiyoda International announced Tuesday that the three companies will perform engineering, procurement, construction and commissioning work for the Southeast Texas liquefied natural gas plant.
Exxon Mobil and Qatar Petroleum announced the final investment decision on the export terminal at a news conference in Washington, D.C.
Financial terms of the construction contract have not been disclosed, but McDermott officials described it as a “mega” contract worth more than $1 billion to the joint venture.
Qatar Petroleum owns a 70 percent stake in Golden Pass, while Exxon owns 30 percent.
Golden Pass, which already has been approved by the Federal Energy Regulatory Commission, will join a list of LNG export facilities under construction that includes Freeport LNG in Texas, Cameron LNG in Louisiana and Kinder Morgan’s Elba Island facility in Georgia, which is in the process of starting up operations.
“Timing is everything,” said Sean Ryan, president of Golden Pass LNG. “We’re going to be at the beginning of this second wave.”
Alex Munton, an analyst at research firm Wood Mackenzie, said building on an existing site would reduce construction time, giving Golden Pass a head start on other LNG projects in development.
“From a cost standpoint, the timing is prudent,” he said. “Proceeding with construction now will enable the project to lock in costs and minimize exposure to inflationary pressures before the next cycle of global LNG investment heats up.”
The decision to move ahead was announced at a ceremony at the Four Seasons Hotel in Wash-
ington, with Energy Secretary Rick Perry and Qatar Energy Minister Saad Sherida al-Kaabi in attendance.
Located near the mouth of the Sabine River about 10 miles south of Port Arthur, the Golden Pass LNG export terminal will include three production units, known as trains, that will produce a combined 16 million metric tons of LNG per year.
Originally built as a liquefied natural gas import terminal and opened in October 2010, record natural gas production in U.S. shale plays prompted Exxon Mobil to move forward with plans to add an export terminal to the facility.
Construction for the export terminal will begin over the next few weeks and is expected to be completed in 2024.
The project is expected to generate 9,000 construction jobs over five years. Once in operation, the facility is will employ 200 people full-time.
The project also represents work for other companies. Oklahoma Citybased Enable Midstream Partners announced that Golden Pass LNG will be the anchor shipper on the company’s Gulf Run Pipeline, a project to move 1.1 billion cubic feet of natural gas per day from Haynesville Shale of northern Louisiana to the Gulf Coast.
Baker Hughes Chief Executive Lorenzo Simonelli also reported on Twitter that Golden Pass LNG will be using three LNG trains being built by the Houstonbased service company.
State and local politicians welcomed the final investment decision by Exxon Mobil and Qatar Petroleum.
Golden Pass LNG launched its Opportunity Roadmap initiative in October 2015 to support nearby workforce development efforts and to make sure that local companies would be included as vendors in the project. Jefferson County Judge Jeff Branick said in a statement that local officials are ready to see the export project come to life.