Procurement

Williams Pacific Connector Gas Operator LLC, acting as the engineering, procurement and construction management contractor on behalf of Pacific Connector Gas Pipeline LP asked the Federal Energy Regulatory Commission for authorization to construct and operate the Pacific Connector Pipeline, a proposed interstate natural gas transmission system designed to deliver up to 1,060,000 Dth/d of natural gas from interconnects with Ruby Pipeline LLC and Gas Transmission Northwest LLC near Malin, OR, to the Jordan Cove LNG export terminal being developed by Jordan Cove Energy Project LP. In late May Jordan Cove, an affiliate of Calgary-based Veresen Inc., filed an application with FERC to construct the liquefied natural gas export facility on the West Coast within the international Port of Coos Bay, OR (see Daily GPI, May 23).

Bechtel Oil, Gas and Chemicals Inc. has contracted with Cheniere Energy Partners LP unit Sabine Pass Liquefaction LLC to provide engineering, procurement and construction of the first two liquefaction trains at the Sabine Pass LNG terminal in Cameron Parish, LA. The contract is worth $3.9 billion. Total expected cost for the project before financing costs is estimated at $4.5 billion to $5 billion. Sabine Liquefaction is planning to construct facilities capable of producing 9 million metric tons per year of liquefied natural gas (LNG) in the first phase of its project and selling 7 million metric tons per year of the production under long-term agreements. To date it has contracted half of the production with BG Gulf Coast LNG LLC (see Daily GPI, Oct. 27) and said it will make a final investment decision upon contracting the remaining 3.5 million metric tons per year. Construction is expected to begin in 2012 with LNG exports expected to occur as early as 2015, Cheniere said.

Apache Canada Ltd. and EOG Resources Canada Inc. have awarded engineering, procurement and construction company KBR the front-end engineering and design contract for Kitimat LNG, the natural gas liquefaction and export facility the partners are planning on British Columbia’s west coast. Financial terms were not disclosed.

Zurich, Switzerland-based ABB is selling its Lummus Global business to Chicago Bridge & Iron Co. (CB&I) for $950 million, the company said. Lummus provides engineering, procurement and construction management services to the upstream and downstream oil and gas, petrochemical and refining industries. The sale, which is subject to regulatory and CB&I shareholder approval, is intended to further focus ABB on its core business in power automation technology, the company said. Netherlands-based CB&I will purchase the entire Lummus Global business, which employs about 2,400 and had reported revenues of $988 million in 2006. ABB’s automation and power businesses remain committed to the oil and gas sector, the company said. In connection with the divestment of Lummus, ABB said it has discovered certain suspect payments in a number of countries. ABB reported these suspected payments to the U.S. Department of Justice and the Securities and Exchange Commission, and is cooperating fully with the authorities, while continuing its internal investigations and compliance reviews. ABB said it retains liability for potential fines and penalties.

Hunt Oil said it awarded a $1.5 billion engineering, procurement and construction (EPC) contract to Chicago Bridge & Iron (CB&I) for the Peru LNG project (PLNG) in Pampa Melchorita, Peru. The project, which is expected to provide about 4.4 million metric tons of LNG per year to the West Coast of Mexico and possibly the United States, has been given a green light to proceed by the international consortium of Hunt Oil, Spain’s Repsol and SK Corp. of Korea.

Hunt Oil said it awarded a $1.5 billion engineering, procurement and construction (EPC) contract to Chicago Bridge & Iron (CB&I) for the Peru LNG project (PLNG) in Pampa Melchorita, Peru. The project, which is expected to provide about 4.4 million metric tons of LNG per year to the West Coast of Mexico and possibly the United States, has been given a green light to proceed by the international consortium of Hunt Oil, Spain’s Repsol and SK Corp. of Korea.

Citing the mild hurricane season, increased U.S. natural gas production and its “proactive procurement” program, Baltimore Gas and Electric Co. (BGE), a utility subsidiary of Constellation Energy, announced last week that its residential customers can anticipate a 15% decrease from last winter in the gas portion of their total bill during the upcoming winter heating season, which begins Nov. 1, 2006 and runs through March 31, 2007.

Citing the mild hurricane season, increased U.S. natural gas production and its “proactive procurement” program, Baltimore Gas and Electric Co. (BGE), a utility subsidiary of Constellation Energy, announced Tuesday that its residential customers can anticipate a 15% decrease from last winter in the gas portion of their total bill during the upcoming winter heating season, which begins Nov. 1, 2006 and runs through March 31, 2007.

A BP affiliate has awarded a $1.8 billion engineering, procurement, construction and commissioning contract for its Tangguh liquefied natural gas (LNG) project in Indonesia to a group including KBR subsidiary PT Brown & Root Indonesia, JGC Corp. of Japan and PT Pertafenikki Engineering of Indonesia. The contract signing came a week after BP signed an agreement for the $5 billion project with the Indonesian government.