Heading for the chequered flag: the race for the EPC contract for Singapore's maiden LNG terminal reaches the final lap
Race for Singapore LNG heats up
The competition for the main engineering, procurement and construction contract for Singapore’s maiden liquefied natural gas import terminal is heating up as two contractors vie for the spoils.
Sources close to the project told Upstreamonline that the EPC award is likely to go to either a consortium led by South Korea’s SK Gas with UK-based Whessoe Oil & Gas or US giant CB&I.
“The consortium led by Samsung is almost certainly out of contention and SK Gas was leading the race, but CB&I lowered their price to match SK Gas last month. SK Gas is now said to be reviewing their bid in an effort to pip CB&I,” an industry source said.
Both SK Gas and CB&I were selected along with a group led by South Korea’s Samsung and Kogas Technology with US-based Fluor, to carry out front-end engineering and design studies last year.
Singapore’s Energy Market Authority (EMA), which established a new company last year called the Singapore LNG Corporation to own and manage the terminal, was planning to award the EPC deal by the end of 2009.
The authority, which is in the final stages of negotiations with the contractors, is now optimistic that an award will be made public by the end of this month.
The start-up of the terminal, which will use two 150,000 cubic-metre storage tanks, is now being targeted for 2013.
Singapore has appointed BG Group as aggregator for the project and this gives the British gas giant the exclusive right to import up to 3 million tonnes per annum of LNG into the city state.
Initial imports at the Jurong Island terminal are expected to be 1 million tpa, likely increasing to the maximum 3 million tpa by about 2018, depending on demand.
The Singapore government has introduced controls on pipeline natural gas imports to allow the build-up of demand for LNG until the capacity of the 3 million tpa import terminal being developed is fully utilised.
The government will consult the industry and review the pipeline natural gas import control policy when LNG imports reach 3 million tpa or in 2018, whichever is earlier, according to the EMA.