Kentz awarded $570 million contract for Ichthys LNG project

Kentz Corporation Limited has announced the award of a $570m (AUS$615m) contract to it' s Australian subsidiary for the electrical and instrumentation (E&I) construction packages for the Ichthys Project Onshore LNG Facilities in Darwin, Australia.

This contract was awarded by JKC Australia LNG, a JV between JGC, KBR and Chiyoda. JKC is responsible for the engineering, procurement and construction of the Ichthys LNG Project' s onshore facilities, including the gas processing plant at Blaydin Point.

The contract, for which site preparation work will commence in August 2014, has a duration of 30 months and will provide more than 1,200 jobs for construction personnel. The contract scope includes the provision of services for site wide E&I installation on a unit rate re-measurable basis for the two process trains and utilities, and additional pre-commissioning and commissioning expertise.

The Ichthys LNG Project is a JV between INPEX group companies (the operator), major partner Total and the Australian subsidiaries of Tokyo Gas, Osaka Gas, Chubu Electric Power and Toho Gas. It is expected to produce 8.4 million tonnes of LNG and 1.6 million tonnes of LPG per annum, along with approximately 100,000 barrels of condensate per day at peak.

Michael Murphy, Group President Construction and TSS of Kentz, commented: "It is extremely pleasing to secure a further major construction contract on the Ichthys Project Onshore LNG Facilities, in this instance for the E&I construction contract."

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Magnolia LNG, SKEC Group sign technical services agreement

Liquefied Natural Gas Limited has reported that Magnolia LNG, LCC (MLNG), its wholly-owned subsidiary, has executed a technical services agreement (TS Agreement) with SK E&C USA, Inc., a wholly-owned subsidiary of SK Engineering and Construction Co. Ltd., of Korea (SKEC Group).

The TS Agreement relates to the ongoing engineering, procurement and construction (EPC) activities for MLNG’s planned 8 mtpa Magnolia LNG Project, in Lake Charles, Louisiana.

SKEC Group has already completed a satisfactory detailed review of Liquefied Natural Gas Limited’s OSMR process technology, which will be employed in the Magnolia LNG Project, and provided the company with an initial estimated EPC cost of $1.57 bn, which was consistent with the company’s budget estimate, including appropriate contingencies.

Liquefied Natural Gas Limited’s Managing Director, Maurice Brand, said that the EPC activities remained on schedule with the SKEC Group and will be managed going forward by the recently appointed COO, John Baguley, who will commence on May 1, 2014.

“We also remain on schedule to lodge our application for Filing with the Federal Energy Regulatory Commissions on the 30 April 2014,” Brand said.

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OPEC sees lower demand as U.S. output rises

OPEC trimmed estimates for the amount of crude it will need to pump this year amid rising U.S. supplies, and predicted that a “supply buffer” will accumulate before demand peaks in the summer.

The Organization of Petroleum Exporting Countries, responsible for 40% of the world’s oil supply, will need to provide an average of 29.6 MMbpd of crude this year, according to its monthly market report. The assessment is 100,000 bpd lower than last month’s because of higher output from the U.S. and Canada, and in line with the group’s March production level. Oil inventories, currently “tight,” will rebuild as demand sags in the second quarter, it said.

Reliance on OPEC is being frayed as the U.S. pumps the most crude in more than two decades by tapping shale formations in North Dakota and Texas. Brent crude futures have lost 2.9% this year, trading for $107.58 a barrel today in London, amid speculation OPEC members Libya and Iran may restore supplies curbed respectively by political unrest and sanctions. OPEC would “accommodate” their return to the market, group Secretary-General Abdalla El-Badri said in Doha, Qatar, yesterday.

“Demand for OPEC crude for 2014 was revised down” from last month “reflecting the upward adjustment of non-OPEC supply,” the group’s Vienna-based secretariat said in the report. “Oil markets have now entered into a period of lower demand, which provides the opportunity to re-build tight product inventories.”

OPEC’s 12 members reduced production by 626,200 bpd to 29.6 MMbpd in March because of declines in Iraq, Angola and Libya, according to secondary sources cited by the report. Iraqi production fell most, declining 288,400 bpd to 3.2 MMbpd, according to the report, which didn’t specify a reason.

The second-largest drop was in Angola, where output fell by 154,800 bpd to 1.5 MMbpd, followed by Libya, where supplies slipped by 117,700 a day to 243,000 a day. Saudi Arabia, the group’s biggest member, trimmed output by 80,500 bpd to 9.7 MMbpd.

The group boosted its projection of supplies from outside OPEC by 60,000 bpd. Non-OPEC producers, led by the U.S., Canada and Brazil, will increase output by 1.4 MMbpd in 2014 to 55.6 MMbpd.

The organization kept its forecast for global oil demand in 2014 stable. World consumption will increase by 1.1 MMbpd, or 1.3%, to 91.2 MMbpd, the report indicated.

OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the U.A.E. and Venezuela. The group will next meet on June 11 in Vienna to discuss output targets.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.