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I.M. Skaugen small scale LNG project facing delays

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LNG Industry,

I.M. Skaugen SE has announced that its small scale LNG project in Africa is making good progress towards implementation, but that it is facing delays.

IM Skaugen claims that all of the site-specific equipment required has been shipped to its location and installed, or, for some parts, already manufactured and modular ready for installation. All of the equipment is paid for by the clients, and specifically made for the project solution. The power plant clients – with support from IM Skaugen team – are preparing the facilities to receive and consume LNG. Complete gassing up and cooldown of the receiving and regasification facilities with liquid nitrogen has been carried out for the first power plant, and no major deficiencies have been found.

In line with the on-site project progression, IM Skaugen claims that first gas was expected to be transported in July 2017 under reconfirmed agreements of 24 May 2017 and 1 June 2017. The company claims that financial close under the agreements has been pending completion of the full package of project agreements, which have, in turn, been reliant on the finalisation of relevant approvals by the government.

In the statement, IM Skaugen claims that it is confident that its client will be able to receive these approvals from the government. However, it also said that these transactions are located in Africa, where such commercial deals are often prone to delays and prevarications. In anticipation of these approvals, the company claims that the commissioning for first gas has been deferred, and it is expecting financial close to now occur in August as opposed to July. As a result, the company will now load its first LNG for the client in August.

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