• Value of liquefied natural gas scheme revised upwards to $2bn-$3bn
  • Package one covers construction of regasification terminal
  • Package two involves building four gas tanks

Emirates LNG has received commercial proposals for the construction of a $2bn-$3bn liquefied natural gas (LNG) regasification and storage facility in Fujairah, according to sources familiar with the project.

The state-owned company is assessing bids for two engineering, procurement and construction (EPC) packages on the project, which will allow the UAE to increase its LNG import capacity to meet gas demand.

The larger first package covers the construction of a 9 million tonne-a-year (t/y) regasification terminal and associated facilities.

Contractors submitting commercial bids are thought to include South Korean groups Hyundai Engineering & Construction and Samsung C&T, and Italian companies Saipem and Techint.

Commercial proposals have also been submitted for the second package to build four gas storage tanks, each with a capacity of 200,000 cubic metres, and associated facilities.

Companies thought to be in the running from the technical bid stage include US-based CB&I, France’s EntreposeContracting, and Japanese groups IHI Corporation and Mitsubishi Heavy Industries.

The values of both packages, which are expected to be awarded at the same time, have been revised upwards due to technical clarifications, according to one source.

Technical bids for both packages were submitted during the third quarter of 2014.

Emirates LNG, a joint venture of Abu Dhabi’s state-owned International Petroleum Investment Company (Ipic) and Mubadala Petroleum, plans to increase LNG import capacity by a further 6 million t/y for the project’s second phase.

Plans to increase the capacity of the terminal over the long term indicate the UAE government will require more LNG imports to plug the deficit in gas demand over the next decade.

Emirates LNG initially proposed a floating facility for the first phase of the scheme, but this was scrapped in favour of a fully land-based terminal.

The front-end engineering and design (feed) phase was carried out by France’s Technip, with the project’s feasibility study completed by US-based Poten & Partners.

Once finished, the terminal will be the Middle East’s first land-based LNG regasification facility and the largest in the region.

Emirates LNG’s main customers are expected to be the Fujairah 1 and 2 integrated water and power plants (IWPPs), which are majority owned by Abu Dhabi Water & Electricity Authority (Adwea).

Once the Fujairah terminal is completed, the UAE will have an LNG import capacity of 12 million t/y, with similar facilities already installed in Jebel Ali in Dubai. The country’s capacity to export LNG is currently 8 million t/y.

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