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SKEC Group nets Magnolia LNG EPC contract

LNG Industry,

Liquefied Natural Gas Limited subsidiary, Magnolia LNG, has signed a Memorandum of Understanding (MoU) with the SK Engineering and Construction Group. SKEC Group has been selected as the primary engineering, procurement and construction (EPC) contractor for Magnolia’s 8 million tpa liquefied natural gas project in Lake Charles, Louisiana.

Under the MoU, the two companies will negotiate a Technical Services Agreement pursuant to which SKEC Group and MLNG (Magnolia LNG) will undertake necessary activities to conclude a bankable Fixed Price EPC Contract.

MLNG’s process technology
The SKEC Group has already satisfactorily completed a detailed review of MLNG’s OSMR® process technology, which will be used in the project. Consequently, subject to final FEED verification, each LNG train will have a design capacity of a minimum of 2 million tpa and a SKEC guaranteed capacity of 1.7 million tpa.

The SKEC Group has also provided Magnolia LNG with an initial estimate of the capital costs of US$ 1.57 billion, which was consistent with the company’s budget estimate. This estimate is for the EPC contract portion of the MLNG Project for the initial phase of two LNG Trains (4 million tpa), including gas treatment facilities, two 160 000 m3 storage tanks, jetty/ship loading facilities and related infrastructure for the full 8 million tpa LNG project.

LNG Limited’s CTO, Paul Bridgwood, commented: “the company and SKEC Group have a long history of working together, including progressing to a binding EPC proposal and draft Fixed Price EPC Contract in relation to the company’s Gladstone LNG Project in Queensland, Australia. SKEC Group has a sound understanding of the company’s project development philosophy and the benefits of the Company’s OSMR® process technology”.

“SKEC Group has already commenced work on the Fixed Price EPC Contract activities and submitted a first draft of the Technical Services Agreement, based on a similar agreement negotiated and executed for the Gladstone LNG Project”, he added.

SK E&C USA CEO, Keith Clauss, commented: “SK E&C USA has established a team of LNG project execution leaders and is fully committed to assisting MLNG in achieving its goal of commencing construction in 2015. We look forward to collaborating with our Seoul headquarters to leverage Gladstone LNG OSMR experience and to deliver LNG Limited’s highly cost effective design for MLNG in Lake Charles, Louisiana”.

Project on schedule
President of Magnolia LNG, Maurice Brand, said that he was very impressed with the LNG team established in Houston by the SKEC Group and with the attendance at the signing of the MoU by SKEC representatives.

“Magnolia LNG remains very much on schedule and budget. With the current team that has been assembled in our Houston office and soon to be announced new Chief Operating Officer and new Senior Vice President, Engineering and Construction, Magnolia LNG will continue to gather momentum during 2014,” Brand concluded.

Adapted from press release by Katie Woodward

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