Japan’s Chiyoda snares LNG jobs

Business, Main Stories


ONE of world’s top engineering firms in gas processing plants, Chiyoda Corp of Japan, has won the leading job of designing and building production equipment for the PNG liquefied natural gas (LNG) project, it was reported yesterday.
The contract is worth US$4.53 billion (K12 billion) and would be undertaken together with another Japanese firm, JGC Corp. 
The deal was disclosed yesterday by Japanese news agency, Nikkei English News, a day after the Exxon Mobil led team of joint-venturers signed on the final investment decision (FID) paving the way for construction to begin as soon as all the financing arrangements were concluded.
Esso Highlands Ltd, a subsidiary of Exxon Mobil Corp and operator of the PNG LNG project yesterday announced the approved engineering, procurement and construction contracts for the project, pending completion of the project sales and purchase agreements with LNG buyers and finalisation of financing arrangements with lenders.
In a statement Esso stated that the approved contracts included:
nChiyoda Corp and JGC Corp for the 6.6 million tonnes per year LNG plant including facilities for processing and treating natural gas, liquefaction, storage and loading;
*A joint venture between CBI and Clough for the Hides gas conditioning plant;
*SPIECAPAG for onshore pipelines and infrastructure;
*Saipem for the offshore pipeline; and
*A joint venture between McConnell Dowell Constructors and Consolidated Contractors Group Offshore for support infrastructure.
Esso Highlands Ltd has 33.2% stake in the project as developer with JV partners; Oil Search Ltd 29%, Independent Public Business Corp (PNG Government, 19.6% (PNG landowners through Mineral Resources Development Co. 2.8%, and Petromin PNG Holdings Ltd’s Eda Oil Ltd 0.2%); Santos 13.5%; and Nippon Oil 4.7%.
Esso Highlands managing director Peter Graham said at the final investment decision on signing on Tuesday that sales and purchase agreements and financing arrangements with lenders were expected to be completed early next year.
He said the project expected to release information shortly regarding approval of engineering, procurement and construction contracts.
The Nikkei report said the Chiyoda and JGC Corp won an order worth about 400 billion yen (K12 billion) in the LNG project outside Port Moresby. 
The Japanese companies would build two production lines, each capable of making 3.3 million tonnes of LNG a year, it reported, stating the contract was expected to have been signed as early as yesterday and construction was scheduled to be completed in 2013.