Bechtel Wins Turnkey Contract for Sabine Pass LNG Terminal

Sabine Pass LNG Plant
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Cheniere Energy Inc. reports that its wholly owned limited partnership, Sabine Pass LNG, L.P. (Sabine), and Bechtel Corporation executed a Lump Sum Turnkey Agreement for the Engineering, Procurement, and Construction (EPC) of the Sabine Pass liquefied natural gas (LNG) receiving, storage and regasification terminal to be located in western Cameron Parish, La. Sabine intends to give Bechtel Limited Notice to Proceed under the EPC agreement for off-site engineering and preparatory work to commence later this month. Construction at the site is expected to begin during the first quarter of 2005, and the terminal is scheduled to be operational in early 2008.

On Dec. 22, 2003 Sabine filed an application with the Federal Energy Regulatory Commission (FERC) for authorization to construct and operate the terminal with processing capacity of 2.6 billion cubic feet per day (Bcf/d). On Nov. 12, 2004 the FERC staff concluded in a Final Environmental Impact Statement that approval of the Sabine Pass LNG Terminal and Pipeline Project, with appropriate mitigating measures as recommended, would have limited adverse environmental impact. On Dec. 15, 2004 FERC Commissioners voted to issue an Order under Section 3 of the Natural Gas Act granting approval for the terminal. The terminal will consist of three 160,000 cubic meter storage tanks and two unloading docks capable of handling ships of up to 250,000 cubic meters -- currently the largest ships planned for construction. Over 600 construction workers are expected at peak construction and there will be approximately 75 permanent jobs created when the facility is in operation.

The Lump Sum Turnkey agreement is valued at $647 million. Cheniere has also budgeted approximately $173 million of owner's costs and contingencies, bringing the total capital budget to approximately $820 million before financing costs, changes in commodity prices and unanticipated change orders.

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