McDermott contract agreement for Mozambique LNG development

Source: press release, 5 June 2019

Mozambique Offshore Area 1
Mozambique Offshore Area 1 (illustration: Mozambique LNG/Anadarko)

McDermott International, Inc. has announced that CCS JV, a joint venture between McDermott, Saipem and Chiyoda, has reached full agreement for a contract with Anadarko Petroleum Corporation for the Mozambique Area 1 Liquefied Natural Gas (LNG) Development.

CCS JV’s project scope includes the onshore engineering, procurement and construction (EPC) for all components of the onshore LNG development, which includes two LNG trains with a total nameplate capacity of 12.88 million tonnes per annum (MTPA), plus the associated utilities and infrastructure. Previously, CCS JV provided front-end engineering design (FEED) services for this LNG development.

McDermott’s initial portion of the EPC contract award is approximately USD 2 billion.

“LNG is helping to shape an entirely new era of energy solutions, and McDermott is playing a significant role in this global shift,” says Tareq Kawash, McDermott’s Senior Vice President for Europe, Africa, Russia and Caspian.

“The Area 1 Mozambique LNG project will build on McDermott’s industry-leading experience and demonstrate our ability to deliver comprehensive EPC solutions globally for world-scale LNG developments,” says Samik Mukherjee, McDermott’s Group Senior Vice President, Projects.

McDermott and Saipem have established a new office in Milan, Italy, where a team from both companies will lead the project management, engineering and procurement in advance of sharing on-site construction management responsibilities. McDermott will perform engineering from both London and Gurgaon, India. Chiyoda will only provide advisory services for the joint venture. Work at the site is expected to commence when Anadarko issues a Notice to Proceed after it takes a Final Investment Decision (FID).

As the operator of Offshore Area 1, Anadarko is the primary project sponsor. Additional sponsors include ENH Rovuma Área Um, S.A, Mitsui E&P Mozambique Area1 Ltd., ONGC Videsh Ltd., Beas Rovuma Energy Mozambique Limited, BPRL Ventures Mozambique B.V., and PTTEP Mozambique Area 1 Limited.

The contract award will be reflected in McDermott’s backlog once Anadarko approves FID, which is expected in June 2019.