Bechtel homes in on LNG contract

28 June 2002

Bechtelof the US is understood to be in the final stages of negotiations about the engineering, procurement and construction (EPC) contract on the first liquefied natural gas (LNG) train at Idku, east of Alexandria. The client is Egyptian LNG, in which the largest shareholders are BG Groupof the UK and Edison Internationalof Italy. The conclusion of the EPC contract is expected to be accompanied by the release of the information memorandum for an estimated $1,100 million financing facility for the scheme (MEED 3:5:02).

Bechtel was appointed front-end engineering and design (FEED) contractor on the scheme in late 2001. The company also worked in the mid 1990s on the Atlantic LNG project in Trinidad, the first plant to use the Phillips Cascade process, which is also being used at Idku. BG, which is a partner in Atlantic LNG, has conceived of the Idku plant as an improved version of the Trinidad project.

The Bechtel contract has been defined as limited release, meaning that some of the early works have been able to proceed ahead of the formal signing. Procurement of the long lead items is expected to start in the autumn.

The plant will produce 3.6 million tonnes a year of LNG from 2005. All of the LNG will be lifted by Gaz de France, which also holds a 5 per cent equity stake in Egyptian LNG. The other shareholders are Egyptian Natural Gas Holding Companyand Egyptian General Petroleum Corporation.

The financial adviser on the scheme is Societe Generale. The financing is expected to take the form of a 15-year uncovered project finance facility. Plans are also being made for a second train at Idku.

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