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Driftwood LNG Awards $15.2B EPC Contract to Bechtel

Tellurian Inc., laying plans to build a natural gas export facility in Lake Charles, LA, has awarded Bechtel Oil, Gas and Chemicals contracts worth $15.2 billion to begin the groundwork.

The engineering, procurement and construction (EPC) leader secured four lump-sum turnkey agreements with Driftwood LNG.

The liquefied natural gas (LNG) export facility as proposed is to have 20 liquefaction units, each with capacity of up to 1.38 million metric tons/year (mmty), or 27.6 million mmty. Three storage tanks and three marine loading berths also are part of the proposal.

“The agreements with Bechtel guarantee performance and secure the EPC cost of Driftwood LNG at $550/ton, one of the lowest-cost liquefaction construction projects worldwide,” said Tellurian CEO Meg Gentle. The former Cheniere Energy Inc. executive helped to found Tellurian in early 2016 with former Cheniere chief Charif Souki.

Driftwood as proposed would include Chart Industries’ integrated pre-cooled single mixed refrigerant process and 20 General Electric (GE) refrigeration compressors, each powered by aero-derivative natural gas turbines.

“Execution of the lump sum and turnkey EPC agreements concludes 18 months of open collaboration among Bechtel, Chart Industries, GE and Tellurian,” Gentle said.

Last year Tellurian merged with privately held Magellan Petroleum Corp. to help advance not only Driftwood but other ventures. GE Oil & Gas in November 2016 made a $25 million investment in Tellurian, followed in late 2016 by oil major Total SA, which works in the Barnett Shale in North Texas. Total took a 23% stake for $207 million.

Tellurian has since made a strategic upstream move, agreeing in September to buy gassy Haynesville Shale acreage near the planned Driftwood site.

Subject to making a final investment decision and approval from the Federal Energy Regulatory Commission, construction could begin next year with first gas in 2022.

“Our collaboration with Tellurian on the Driftwood LNG project will deliver a low-cost LNG facility that is more flexible to changing market conditions,” said Bechtel Oil President Alasdair Cathcart. “Our record of completing 11 LNG trains in the past three years is unmatched in the industry…”

Bechtel said to date it has delivered 42 LNG trains on 17 projects in 10 countries. During 2017, the operator said it had delivered three trains to customers in Australia and the United States, adding 13.5 mmty. 

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