In the aftermath of Hurricane Harvey and legal delays, Sempra Energy said on Tuesday it has settled with the contractors at the Cameron liquefied natural gas (LNG) export project in Hackberry, LA, and expects the facility to have three trains operating in 2019.
San Diego-based Sempra LNG & Midstream’s agreement with affiliates of Chicago Bridge & Iron Co. NV (CB&I) and Chiyoda International Corp., joint owners of CCJV, resolved "known and unknown claims to date," including those related to Hurricane Harvey's aftermath.
Even before Harvey shut down the site, Sempra and its partners were questioning CB&I, the engineering, procurement and construction (EPC) contractor, regarding the project timetable. The contract with the EPC was signed in 2014. Total cost of Cameron is estimated at $10 billion.
The three liquefaction trains when completed are being designed to export up to 12 million metric tons/year of LNG, or about 1.7 Bcf/d.
"The settlement falls within the existing construction budget financing commitments for Cameron LNG while including incentives for additional milestones," said a Sempra spokesperson. The deal is contingent on satisfying conditions that would reflect improvement to CB&I's credit support of the project.
In a 8-K filing with the Securities and Exchange Commission (SEC) on Tuesday, Sempra said the settlement waives schedule-related liquidated damages in the original EPC contract's schedule and reestablishes the start dates for liquidated damages under the new schedule.
"The settlement agreement also addresses various matters arising from or related to the construction of the three-train liquefaction facility, including the delays to date, the work remaining to be completed and all claims raised by the EPC prior to Dec. 17, 2017, as well as matters related to the EPC contractor's general obligations to Cameron LNG under the EPC contract," the filing noted.
The settlement terms, new schedules and construction progress to date all point to a 2019 start up of all three trains at Cameron.
Until late in 2016, expectations were that the three trains would all be fully operational by the end of 2018, but Sempra has since pushed the startup into 2019. Sempra holds an indirect 50.2% ownership interest in Cameron LNG and the related liquefaction project. The other stakes are held by affiliates of GDF Suez SA, Mitsubishi Corp. and Mitsui & Co. Ltd., each with 16.6% interest.