Anadarko Petroleum’s $25 billion Mozambique liquefied natural gas project took a significant step forward this week after the operator finalised a contract with the CCS joint venture to build two initial trains with a total capacity of 12.88 million tonnes per annum.

The CCS joint venture of CB&I (now McDermott International), Chiyoda and Saipem was originally selected to handle the engineering, procurement and construction contract for the LNG scheme in May 2015.

Since then, due to financial problems, Chiyoda’s involvement has been scaled back to such an extent that it is now only providing advisory services to the Italy-incorporated joint venture.

Saipem was brought into the joint venture only after Chiyoda and CB&I had completed front-end engineering and design work on Mozambique LNG, but it is now the lead contractor.

The Italian player said its share of the EPC contract is worth $6 billion, while McDermott valued its “initial portion” at $2 billion.

Although this contract has been executed, Saipem said it is subject to a “full notice to proceed, which Anadarko is expected to issue after the final investment decision”. Sanction is expected later this month, probably on 18 June.

Saipem chief executive Stefano Cao said: “With this project, we will strengthen our presence in East Africa, confirming (our) role among the leaders in the LNG market for the energy transition."

According to McDermott, the EPC contract covers the two trains plus the associated utilities and infrastructure. McDermott and Saipem have established a new office in Milan where a team from both companies will lead the project management, engineering and procurement in advance of sharing on-site construction management responsibilities.

McDermott said it will perform engineering from both London and Gurgaon, India, adding that Chiyoda “will only provide advisory services for the joint venture”. Work at the Afungi site in Cabo Delgado province is expected to start once the notice to proceed has been rubber-stamped.

Feedstock for the two initial trains will come from Anadarko’s deep-water Golfinho-Atum gas fields in Area 1.

Upstream understands that a consortium of TechnipFMC and Van Oord will carry out subsea activities on Golfinho-Atum, covering umbilicals, flowlines, export lines as well as shore approach and reef work. This package is expected to carry a price tag of about $2 billion.

This week, Anadarko released an expression of interest for the provision of subsea operations, maintenance, construction and engineering services during the offshore commissioning phase and, later on, in the operations phase.

Responses are to to be submitted by 20 June, while the successful bidder will have to have its vessels on site no later than the third quarter of 2022.

The workscope includes subsea commissioning and start-up, the installation of flexible well jumpers and flying leads, as well as the support of inspection, maintenance and repair activities. To underpin operations and maintenance work, contractors must have access to an ocean-going support vessel — with a dynamically positioned 2 capability — two work-class remotely operated vehicles, a coiled tubing unit and a hydrate remediation skid.

The successful contractor must also have a “self-supported shore base capability”, said Anadarko.

Anadarko is also in the market for drilling and completions related goods and services plus any associated services needed to support the execution of a well construction campaign, with expressions of interest due to be submitted by 12 June.

The initial phase of Mozambique LNG calls for the drilling of multiple development wells, while the associated services element of the workscope covers items such as pipes, wellheads, connectors and fluids. The announcements on the main liquefaction contract by Saipem and McDermott came the day after Mozambique’s Cabinet approved the funding structure for the LNG scheme.

A Cabinet spokesperson told reporters that $14 billion of finance will come from banks with the remaining $11 billion sourced from the partners.

“This project (cost) is estimated at $25 billion,” said the spokesperson.

Anadarko has so far signed gas sales agreements covering 11.1 million tpa of LNG.

Anadarko’s partners in Area 1 and Mozambique LNG include state-owned ENH, Mitsui, ONGC Videsh, Beas Rovuma Energy, Bharat Petroleum and PTTEP.

However, Total will assume operatorship if Occidental Petroleum's acquisition of Anadarko proceeds, as the Californian buyer has agreed to sell Anadarko's African assets to the French giant.

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Anadarko dishes Mozambique LNG job