Cheniere Energy Inc. moved a step closer to developing two new LNG import terminals at Corpus Christi, TX, and Sabine Pass, LA, signing an agreement with Bechtel Corp. for engineering, procurement and construction (EPC) of the facilities. Bechtel will work over the next few months to develop a lump-sum turnkey estimate for the terminals, based on the front end engineering design (FEED) currently being completed.

Cheniere CEO Charif Souki called the deal with Bechtel, one of the largest engineering and construction firms in the world, an “important milestone. We want to finalize contract terms and progress rapidly from the FEED to a full EPC phase with Bechtel.”

The two facilities will each consist of two unloading docks capable of handling ships of up to 250,000 cubic meters and three 160,000 cubic meter storage tanks, with peak vaporization capacity of 2.6 Bcf/day each.

“We have now lived for almost one year in a $4.00 to $5.00 gas price environment, but have been unable to reverse the decline in domestic production,” Souki noted. “We anticipate that the reactivation of existing terminals and their expansion will help offset some of this decline, but by 2006 we will have exhausted short-term solutions.

“We expect to file an application for permits with FERC in January 2004 and complete the safety and environmental reviews necessary for our application. It takes three years to build a receiving facility, and we want to be ready as soon as possible. We are fortunate to have partners in the communities of Corpus Christi and Sabine Pass and at Bechtel who are working hard to meet a demanding schedule. We hope to have the facilities in service as early as 2007.”

Cheniere also is a 30% limited partner in Freeport LNG Development LP, which is developing another LNG receiving terminal in Freeport, TX (see Daily GPI, Aug. 18, June 23, June 16, Dec. 20, 2002).

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