Shell and Energy Transfer Seek More Bids for Louisiana Project

Shell and Energy Transfer Seek More Bids for Louisiana Project
The Lake Charles LNG project would convert Energy Transfer's existing import and regasification terminal into an LNG export facility.

Shell US LNG, LLC and Energy Transfer LP have issued a full commercial tender package for engineering, procurement and construction (EPC) contractors to submit final commercial bids for the proposed Lake Charles LNG liquefaction project they are developing in southwestern Louisiana, Energy Transfer reported Tuesday afternoon.

The project would convert Energy Transfer’s existing import and regasification terminal into an LNG export facility with 16.45 million tonnes per annum of liquefaction capacity. In May of this year the Lake Charles LNG partners issued a technical invitation to tender (ITT) focusing on contractors’ verification of the engineering and design of the project, Energy Transfer stated Tuesday. The firm added that the newly issued commercial tender expands on the ITT.

According to Energy Transfer, the commercial tender invites the EPC contractors to develop a comprehensive commercial bid for the lump sum turnkey contract. The firm added that bids need to include a fully developed scope tied to design, engineering, technical and safety specifications for constructing, commissioning and starting up the proposed liquefaction facility. It also noted the commercial tender requires contractors to submit a fully developed execution plan and completion schedule.

“This is an important step in the continued development of this LNG project with Shell,” Energy Transfer LNG President Tom Mason said in a written statement. “This project capitalizes on repurposing existing brownfield regas assets to achieve cost savings in the construction of the liquefaction facility. The project will also benefit from the unique strength of Energy Transfer as a leading natural gas pipeline operator with extensive connectivity to the Lake Charles facility.”

Energy Transfer stated that it expects to receive commercial bids during the second quarter of 2020. Prior to the final investment decision stage, Shell will act as project lead and Energy Transfer site manager and project coordinator. If the 50/50 joint venture partners sanction the liquefaction project, Shell will act as construction manager and operate the facility.

“The commercial tender represents another important milestone in our phased approach to developing a credible and safe LNG project for Shell and Energy Transfer,” commented Frederic Phipps, Shell’s vice president for Lake Charles LNG. “We look forward to continue leveraging our global experience in LNG development and build on our positive collaboration with EPC contractors to drive value and competitiveness throughout the bid process.”

The Lake Charles LNG project is already fully permitted, having secured necessary approvals from the U.S. Federal Energy Regulatory Commission (FERC) and the U.S. Department of Energy, Energy Transfer’s project website states. In addition, the firm expects the liquefaction project to create up to 5,000 construction and 200 full-time operations jobs.

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