Cheniere Awards Bechtel $3.8 Billion Contract for Sabine Pass LNG Liquefaction Trains

qatar gas sabine pass lng carrier — A Qatar Gas LNG carrier approaches Sabine Pass in 2008, a time when the US was an importer of LNG

In a filing to the SEC today, Sabine Liquefaction, a wholly owned subsidiary of Cheniere Energy, announced the award of a $3.8 billion lump sum turnkey contract with Bechtel for the engineering, procurement, and construction of the third and fourth LNG liquefaction trains to be constructed adjacent to the Sabine Pass LNG terminal in Cameron Parish, Louisiana.

Construction for the third and fourth trains is expected to begin in the first half of 2013. The liquefaction trains are being designed, constructed, and commissioned by Bechtel using the ConocoPhillips Optimized Cascade technology, a proven technology deployed in numerous LNG projects around the world. Nominal capacity for each train will be approximately 4.5 million tonnes per annum.

In the ConocoPhillips Optimized Cascade process, natural gas is first treated to remove contaminants including CO2, water and mercury before entering the liquefaction section of the plant. The treated gas is then chilled to approximately –260 degrees Fahrenheit in successively colder heat exchangers that use propane, ethylene and methane as refrigerants. Product leaving the methane exchangers is LNG ready for storage.

The liquefaction trains will be built next to the existing facilities at the Sabine Pass LNG terminal, which include five tanks with storage capacity of 16.9 billion cubic feet equivalent (Bcfe), two docks that can handle vessels up to 265,000 cubic meters, and vaporizers with regasification capacity of 4.0 billion cubic feet per day (Bcf/d).

“We look forward to our continued collaboration with Bechtel on the development and construction of our liquefaction trains at Sabine Pass. Bechtel built our existing LNG terminal on time and on budget and has an extensive track record in building some of the largest LNG export production facilities in the world,” said Charif Souki, Chairman and CEO of Cheniere Energy Partners.

“Cheniere is at the forefront of North America’s LNG industry, and we appreciate their trust and confidence in delivering this important project,” said Jack Futcher, President of Bechtel’s oil, gas, and chemicals business unit. “We look forward to helping them achieve their vision to transform Sabine Pass into a world-class facility.”

In addition, Sabine Liquefaction recently announced that it is developing a fifth and sixth liquefaction train. Sabine Liquefaction has entered into a sale and purchase agreement with Total Gas & Power North America, Inc. (Total), under which Total has contracted for approximately half of the expected LNG production capacity of the fifth liquefaction train and based on indications of interest expects to contract the remaining capacity in due course. Sabine Liquefaction has begun working with Bechtel on the preliminary engineering for a fifth and sixth train and expects to commence the regulatory process in the first half of 2013.