Bids seen to be above budget for main package of Emirates LNG project
- Samsung C&T submits lowest bid, say sources
- $2bn-$3bn project planned to boost UAE gas supplies
- Bids also submitted for smaller storage tanks package
South Koreas Samsung C&T has emerged as the frontrunner to win the largest package on the $2bn-$3bn liquefied natural gas (LNG) project in Fujairah, according to sources familiar with the scheme.
Abu Dhabis state-owned Emirates LNG received commercial engineering, procurement and construction (EPC) bids on the two packages of the LNG regasification and storage facility earlier in 2015.
Samsung C&T submitted the lowest bid for the larger first package, which covers the construction of a 9 million tonne-a-year (t/y) regasification terminal and associated facilities.
Other contractors submitting commercial proposals are thought to include Italian groups Saipem and Techint, with sources divided on whether or not Hyundai Engineering & Construction bid on the package.
The bidders received a letter from Emirates LNG earlier in 2015 asking them to take into account the the fall in oil prices when submitting offers.
I think there is a budget issue and it looks like the commercial bids are above budget, says a source familiar with the contract. They were expecting that in the current market environment they would get bids below the budget.
One source believes there is a possibility that contractors will be asked to submit revised prices in light of the weak oil market conditions, but that Emirates LNG will not rush to make a decision either way.
The project was re-tendered in 2014, after Emirates LNG had already received bids, after the company decided to change the scope of the facilities.
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.
Technical bids for both packages were submitted during the third quarter of 2014.
Emirates LNG, a joint venture of Abu Dhabis 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 projects second phase.
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