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QatarEnergy selects $10bn LNG project winner

12 May 2023

QatarEnergy has selected the winning contractor for the engineering, procurement and construction (EPC) of the two new liquefied natural gas (LNG) trains that constitute the main package of the North Field South project – the next development phase of Qatar’s LNG expansion programme.

The two LNG trains will have a capacity of 7.8 million tonnes a year (t/y) each and will increase QatarEnergy’s LNG production capacity to 126 million t/y when commissioned in 2028.

A consortium of France’s Technip Energies and Greece/Lebanon-based Consolidated Contractors Company (CCC) has been selected by QatarEnergy for the estimated $10bn EPC contract, according to sources.

The official contract award ceremony is set to take place in mid-May at QatarEnergy’s headquarters in Doha, sources told MEED.

A consortium of Taiwan’s CTCI, South Korean contractor Hyundai Engineering & Construction and Italian contractor Saipem was competing with Technip Energies/CCC for the North Field South LNG trains.

QatarEnergy did not respond to MEED’s request for comment on the selection of Technip Energies/CCC for the North Field South LNG trains, and the timing of the official contract award. Technip Energies previously declined to comment on the North Field South project.

North Field South LNG scheme

QatarEnergy issued the estimated $6bn tender for the EPC works on the North Field South LNG trains in April last year. Technip Energies has performed the front-end engineering and design (feed) work on the LNG trains package.

Contractors submitted technical bids for the package on 20 October, as MEED previously reported. QatarEnergy received commercial bids for the two LNG trains on 15 February this year.

Upon initial evaluation of commercial bids, QatarEnergy is understood to have reached out to bidders with requests to reduce their prices by up to 15 per cent. Bidders then submitted revised prices by 17 March.

Japan-headquartered Chiyoda Corporation, which had formed a consortium with Technip Energies to bid for the North Field South LNG trains, pulled out of the project “due to a combination of factors”, according to sources. Following Chiyoda’s withdrawal, Technip Energies tied up with CCC for the LNG trains package.

North Field East LNG scheme

EPC works are progressing on the four main packages of QatarEnergy’s North Field East LNG project, which will increase Qatar’s LNG output to 110 million t/y by 2025 from its existing capacity of 77.5 million t/y.

Launched in 2017, the North Field East project constitutes the first phase of QatarEnergy’s $28.75bn North Field LNG expansion project.

The EPC works on the North Field East project were divided into six packages – four onshore and two offshore.

ALSO READ: Qatar fires on all cylinders with gas strategy

QatarEnergy awarded a massive $13bn contract for North Field East package 1 to a consortium of Chiyoda and Technip Energies on 8 February 2021. The package covers the EPC of four LNG trains, with each train planned to have an output capacity of about 8 million t/y. In turn, the Chiyoda/Technip Energies consortium awarded CCC a $2.3bn sub-contract in July 2021 to execute a significant share of their work on the North Field East main package.

In March 2021, QatarEnergy awarded South Korea’s Samsung C&T Corporation a $2bn contract for executing EPC works on the second North Field East package. This will expand the LNG storage and loading facilities in Ras Laffan Industrial City (RLIC).

In August, QatarEnergy awarded the third North Field East package to Spanish contractor Tecnicas Reunidas. The scope of work on the package covers EPC works to expand the storage and loading facilities for condensates, propane and butane and increase the import facilities for mono-ethylene glycol within RLIC.

A 70:30 joint venture of Tecnicas Reunidas and China’s Wison Engineering won the $600m EPC contract for the fourth North Field East package in April this year, related to the building of sulphur handling, storage and loading facilities.

As well as an LNG output of some 32 million t/y, North Field East will produce 4,000 tonnes a day (t/d) of ethane as feedstock for future petrochemical developments, 260,000 barrels a day (b/d) of condensates, 11,000 t/d of liquefied petroleum gas (LPG) and 20 t/d of helium.

ALSO READ: Qatar scripts success story for LNG sector

Between June and July last year, QatarEnergy completed selecting stakeholders in the North Field East scheme.

The state enterprise has divested a total stake of 25 per cent in the North Field East programme, billed as the single largest project in the history of the LNG industry.

France’s TotalEnergies, Italian energy company Eni, US oil and gas producers ConocoPhillips and ExxonMobil, and UK/Netherlands-based Shell have collectively pooled over $7bn into the North Field East project.

QatarEnergy has also completed the selection process for international partners in the NFS LNG project. Out of the 25 per cent share available for foreign stakeholders, TotalEnergies and Shell have won 9.375 per cent stakes each, while ConocoPhillips has secured a 6.25 per cent stake.

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Indrajit Sen

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