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    Italian Saipem Lands Arctic LNG 2 Deal

Summary

The final investment decision appears now a formality.

by: William Powell

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Italian Saipem Lands Arctic LNG 2 Deal

Italian engineering firm Saipem is to join Technip France and Russian NIPIgaspererabotka in the Arctic LNG2 project, it said August 2. It won a €2.2 ($2.24)bn contract from Arctic LNG2, a company formed by Russian independent Novatek (60%) and its wholly owned subsidiary Ekropromstroy (40%) and comprises the detailed design, procurement, fabrication, construction, commissioning and start-up of three 6.6mn metric tons/yr LNG trains built into gravity-based structures (GBS).

Saipem is designing and building the GBS – a much cheaper alternative to the technique used in Yamal LNG – in the framework of the contract announced December 19, 2018. The contract will be executed under lump sum and reimbursable basis. 

CEO Sefano Cao said that Saipem's involvement in building the three trains, following the awards of the contracts for the GBS with the same client and in the LNG Mozambique project with Anadarko, reaffirm "Saipem’s strategic choice to consolidate its leadership across the entire natural gas value chain.”

Novatek is expected to announce the final investment decision by end-September, but it says it has already taken the decision to proceed "in its head."

Norwegian engineers Kvaerner had done three earlier studies for Novatek recommending the cost-saving GBS idea, as the system used for Yamal LNG, which involved sinking thermally insulated piles into the permafrost, was too costly to be repeated. But it lost out on the big contracts.