Design contract awarded for LNG import terminal in Lake Charles

Paris-based Technip has won the front-end engineering-and-design contract for the potential expansion of Trunkline LNG Export LLC’s existing liquefied natural gas import terminal in Lake Charles.

The proposed project includes an LNG liquefaction plant, with a total export capacity of up to approximately 16.5 million tons of liquefied natural gas per year or 2 billion cubic feet per day.

Technip’s Houston office will do the work with support from the company’s Paris center. In 2012, Technip paid $290 million for Shaw Group Inc.’s Energy and Chemicals business. The sale helped Shaw meet a key condition for its sale to CB&I: having $800 million in cash.

Air Products would supply the liquefaction technology under the design study.

Trunkline is a joint venture owned by Energy Transfer Equity LP and Energy Transfer Partners LP. Trunkline is one of three facilities -- two in Louisiana -- with federal permission to export LNG to countries that aren’t covered by free trade agreements. Those countries include Japan and other major importers of natural gas.

The price in Asia and Europe for natural gas is much higher than the U.S. price, making exports potentially very profitable. The spot price in Asia, for example, is now around $15 per thousand cubic feet. The spot price domestically is less than $3.50 per thousand cubic feet.

In early August, Energy Transfer and BG Group, agreed on preliminary terms to jointly develop an LNG liquefaction project at the Lake Charles facility. The companies said they expect to begin construction in mid-2015 and begin operations in mid-2019.