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    Saipem, McDermott JV Wins $8bn Contract


The Mozambique LNG project is poised to announce final investment decision.

by: William Powell

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Natural Gas & LNG News, Africa, Liquefied Natural Gas (LNG), Corporate, Contracts and tenders, Infrastructure, News By Country, Mozambique

Saipem, McDermott JV Wins $8bn Contract

Italian Saipem has won a $6bn share of a contract from the partners in the Mozambique LNG project, it said June 5. It is partnering US McDermott International and Japanese Chiyoda Corporation in a joint venture that won the engineering, procurement and construction (EPC) contract for the onshore LNG project in Mozambique.

McDermott said separately that its share of the EPC contract is worth an initial $2bn contract. Chiyoda had not issued a statement at time of press but it is providing only advisory services.

Saipem will operate as leader of the company known as CCS JV, a company incorporated in Italy, to execute the project.

The contract was executed by Anadarko Corporation, which operates Offshore Area 1 and is leader in a venture including state ENH, Japanese Mitsui, Indian ONGC Videsh, Beas Rovuma Energy Mozambique, BPRL Ventures Mozambique and Thai PTTEP. Anadarko is being bought by Occidental Petroleum, but all of its African assets will go to French Total in a separate deal.

The LNG project consists of two liquefaction trains with a total nameplate capacity of 12.88mn mt/yr, as well as all necessary associated infrastructure, storage tanks and export jetty facilities. The EPC contract is subject to a full notice to proceed which Anadarko is expected to issue after the final investment decision due June 18.

“After many years of dedication to this project, we are very happy to announce that we have reached full agreement for the contract. We congratulate Anadarko and its co-venturers for the achievement and grateful for the confidence demonstrated toward our CCS JV. We look forward to mobilizing our teams to site after Anadarko issues notice to proceed following the FID,” said Saipem CEO Stefano Cao. “With this project, we will strengthen our presence in east Africa, confirming Saipem’s role among the leaders in the LNG market for the energy transition. A project of such a scale will contribute significantly to the economic growth of Mozambique as a new pole in the west-east energy routes and, as Saipem, we are proud of our substantial contribute to these future developments.”

McDermott said "LNG is helping to shape an entirely new era of energy solutions, and McDermott is playing a significant role in this global shift."

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.