Cheniere awards EPC contract for next phase of Sabine Pass LNG expansion to Bechtel

A Cheniere Energy Partners subsidiary has entered into a lump-sum turnkey (LSTK) engineering, procurement and construction (EPC) contract with Bechtel Energy for the first phase of the SPL expansion project.

The SPL expansion project entails the development of a further three large-scale liquefaction trains at the Sabine Pass LNG export project on the Louisiana Gulf Coast. The facility – Cheniere’s first export project – currently has six liquefaction trains with a combined capacity of over 30mn tonnes per year (tpy) of LNG.

The expansion project is being carried out in phases, with Phase 1 entailing a single train, Train 7, a boil-off gas (BOG) re-liquefaction unit and with supporting infrastructure and tie-ins to the existing Sabine Pass facility. Cheniere said that Phase 1 was expected to have total production capacity of over 6mn tpy of LNG, inclusive of estimated debottlenecking.

This phase of the expansion project is “commercially underpinned” by long-term agreements with “creditworthy counterparties”, it continued, adding that a final investment decision (FID) on Phase 1 was subject to receipt of necessary regulatory approvals and an “acceptable financing arrangement”, among other factors. Indeed, the required approvals from the US Federal Energy Regulatory Commission (FERC) and Department of Energy (DoE), relating respectively to construction of the SPL expansion project and to exports from it to countries with which the US does not have a free-trade agreement (FTA), are both still pending. Assuming these authorisations are received on schedule, Cheniere anticipates reaching an FID on Phase 1 by early 2027.

According to a filing submitted by Cheniere to the US Securities and Exchange Commission (SEC) in late May, the value of the contract awarded to Bechtel is roughly $4.69bn. In addition to signing the EPC contract, Cheniere subsidiary Sabine Pass Liquefaction Stage V also issued a limited notice to proceed to Bechtel. This enables the contractor to begin early engineering and procurement for Phase 1.

The EPC contract represents a further extension of the ongoing partnership between the companies. Bechtel has served as the EPC contractor for all phases of construction at both of Cheniere’s LNG export terminals – Sabine Pass and Corpus Christi – to date. Indeed, given the shortage of labour availability on the US Gulf Coast, Cheniere’s phased approach to expansion has helped it to retain Bechtel workers at its two sites.

In the case of the SPL expansion, this marks a return to large-scale trains, even as Cheniere is carrying on with construction of midscale trains at Corpus Christi LNG.