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CB&I awarded development contract for Yamal LNG project

LNG Industry,

CB&I Lummus has been awarded a contract for concept development services for the Yamal LNG Integrated Project by Yamal LNG LLC. This contract is scheduled for completion in the first half of 2011.

The Yamal LNG Integrated Project consists of the production, treatment, transportation, liquefaction and shipping of natural gas and natural gas liquids from the South Tambey field on the Yamal Peninsula in Northwestern Siberia, Russia. The natural gas reserves in the South Tambey field are estimated at more than 1 trillion m3.

"We are pleased to be awarded the concept development work on this significant project and appreciate the confidence shown by Yamal LNG in selecting CB&I in a very competitive environment," said Philip K. Asherman, CB&I's President and CEO. "This award builds on our proven worldwide LNG technical expertise and our wide spectrum of experience in Russia, including refinery upgrades, technology work and the LNG storage tanks for Sakhalin LNG."

CB&I's project scope includes concept development of the 15-16 million tpa capacity LNG liquefaction plant, including LNG storage and loading facilities, as well as arctic shipping and ice management solutions, a gas transmission pipeline, a central production facility for gas and condensate treatment, and the associated well sites and gas gathering system. The concept development will address the technical, economic and execution feasibility of this remote arctic project and will provide a project schedule and cost estimates, in addition to the basis of design for the Front End Engineering and Design (FEED) phase.

Due to the remoteness and extreme conditions in the Yamal Peninsula, including permafrost, ice-loading, and environmental sensitivity, the Yamal LNG project is considered one of the world's most challenging energy projects, requiring a combination of proven technology and a unique execution model. Given the current glut of LNG on the global market it is interesting that Novatek, who own the field, are pushing to start the project. However, given the technical difficulties associated with developing the field, they may be banking on gas prices rising by the time the facility comes online.

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