LNG Ltd has award a $1.986 billion EPC contract to SK E&C for an EPC contract on two LNG trains.
The contract, through LNG Ltd’s wholly owned subsidiary Magnolia LNG, will see SK E&C engineering, procure, and construct a four million tonnes per annum LNG installation, comprising of two LNG trains (Trains 1 and 2), each with a LNG design capacity of 2mtpa, two 160 000 cubic metre storage tanks, a jetty, ship loading facility, and related infrastructure, as well as all required approvals and licences for the full 2mtpa project.
An additional two 2mtpa (Trains 3 and 4) are also planned to follow the initial construction and installation of Trains 1 and 2.
Financing and legal work for the project will be handled by BNP Paribas, Merlin Advisors, and White and Case.
On top of this SK E&C will also carry out further optimisation and cost reductions, going forwards to March 31.
During this period the two parties will also agree to the capital cost for Trains 3 and 4, which is currently estimated at approximately US$1 billion.
According to LNG CEO Maurice Brand, “based on the extensive FEED and costing work completed and with the open book nature of the SK E&C Group agreements, the final EPC capital cost is estimated at ~US$3 billion, with a total Magnolia LNG Project cost for the 8mtpa (four LNG train) project estimated at US$3.5 billion.”
The company is aiming to provide first LNG in 2018.