The first train at Cameron LNG is on track to produce liquefied natural gas (LNG) by the end of June and is progressing toward full operation by next year, according to Houston-based engineering and construction giant McDermott International Inc.
The Cameron facility in Hackberry, LA, is 90% complete with its first phase and achieved mechanical completion during the first quarter, with Train 1 set for initial production this quarter, McDermott CFO Stuart Spence told analysts and investors during a conference call Monday to discuss 1Q2019 financial results.
Initial production from Cameron trains 2 and 3 is set for 1Q2020 and 2Q2020, respectively, Spence said.
McDermott’s timeline for the second and third trains represents a roughly three-month delay from what backer Sempra Energy shared during a 4Q2018 conference call held earlier this year. When asked by an analyst about the apparent delay, CEO David Dickson said McDermott’s schedule for the project is “in line with the schedule that we took at the end of 4Q2018.
“What I can say is that since we put that schedule together the project has performed against that schedule, so things are progressing really well. We always throw out the caveat that we are in commissioning mode,” Dickson said. “So we always have to be careful of the unknowns that could occur as we get through the commissioning process.”
Dickson called the recent introduction of feed gas at Cameron a “major step forward” in the commissioning process for Train 1.
“One of the underlying reasons for improved execution on the Cameron project is that we have taken a very active management role in all aspects of the project, including additional responsibility and directing the commissioning work,” Dickson said.
McDermott’s work on the Freeport LNG terminal on the Texas coast is also progressing, with the facility moving toward initial production later this year. Freeport has secured Federal Energy Regulatory Commission approval to introduce fuel gas to pre-commission the pretreatment facility, which marks a “significant milestone” for the project.
“With the imminent completion of Cameron Train 1, as expected, as well as initial work to commission Freeport Train 1, we're increasingly confident that the two facilities will come fully online in 2020 as world-class LNG plants,” the CEO said.
Freeport reached 93% completion during the first quarter and is scheduled for initial production for the first three trains between 3Q2019 and 1Q2020, management said.
Meanwhile, McDermott on Tuesday said it was awarded an engineering, procurement and construction contract by Eni Mexico for a wellhead platform one (WHP1) in the Amoca field about 18 miles offshore Dos Bocas in southeast Mexico.
“This contract marks McDermott’s largest award to date with Eni Mexico, and it builds on our previous success in delivering Eni’s projects with the highest levels of safety, quality and cost-efficiency,” said McDermott’s Mark Coscio, senior vice president for North, Central and South America.
The company expects to immediately start engineering work on the project, which will show up in the 2Q2019 backlog. Management said the unnamed oil and gas production facility will include eight producer wells and four water injection wells. WHP1 would be installed in contract Block 1 at a depth of around 93 feet, with fluids exported to a floating production, storage and offloading vessel, according to the company.
McDermott reported a net loss of $70 million (minus 39 cents/share) for the first quarter, which management attributed to $73 million of “restructuring, integration and transaction costs.” That compares with net income of $35 million (37 cents) in 1Q2018.