CB&I plant contract means thousands of La. jobs

CB&I and a Japanese company have landed a $6 billion joint venture contract to construct a natural gas liquefaction plant in southwest Louisiana that would mean thousands of jobs at the site, in Baton Rouge and across the state.

The contract was awarded by Cameron LNG LLC to CB&I and Chiyoda International Corp., a U.S. subsidiary of Chiyoda Corp. of Japan, to construct the Cameron liquefaction project in Hackberry.

The project is awaiting permits, financing and a final investment decision from Sempra, which will own an indirect 50.2 percent ownership interest in Cameron and the liquefaction project.

Sempra wants to add liquefaction plants and other facilities to turn a natural gas import terminal into an export terminal. Sempra said recent Energy Department approval, a draft environmental impact statement and commercial agreements put the company on track for construction to start this year, with full commercial operation in 2019.

CB&I said the project will create about 3,000 on-site jobs, as well as several hundred jobs at CB&I’s fabrication facilities in Louisiana and several hundred engineering and project management jobs in the company’s Baton Rouge office.

CB&I, of The Woodlands, Texas, established its presence in the capital city and state with the $3 billion acquisition of The Shaw Group Inc. in February 2013.

The scope of work includes design, engineering, procurement and construction for the addition of natural gas liquefaction and export facilities to Cameron’s existing LNG regasification facility in Hackberry.

The Cameron Liquefaction Project will be made up of three liquefaction units with a capacity of about 13.5 million tons per year of liquefied natural gas.

In February, Cameron received conditional authorization from the U.S. Department of Energy to export domestically produced LNG to countries that do not have a free-trade agreement with the U.S.

“This is a really big deal,” retired LSU economist Loren Scott said.

The economist said Sempra needs a final DOE permit in order to export liquified natural gas to Europe, India, Japan and South Korea. All are non-free-trade partners, he said, and all are keen on increasing their natural gas supplies.

Producers of liquified natural gas can expect to receive $4.50 per million Btus sold in the U.S., Scott said.

The price is much higher at some overseas locations, he said. For example, Scott said, the same product could sell for $18 per million Btus in Japan.

“The selection of CB&I and Chiyoda as contractors represents another significant milestone in the development of Cameron LNG liquefaction-export project,” said Octavio M. Simoes, Sempra LNG’s president, on Monday.

“The engineering, procurement and construction companies we’ve selected have the qualifications to build large liquefaction and energy infrastructure projects as well as a firm commitment to support our project’s neighbors in southwest Louisiana.”

“With more than 50 years of experience in the LNG industry, CB&I has a long history of successfully executing LNG projects all over the world,” said Philip K. Asherman, CB&I’s president and chief executive officer. “This new award builds on our strong presence along the U.S. Gulf Coast, including Louisiana. This project will utilize a large number of engineering and construction craft workers, and we feel fortunate to be able to contribute to both the growth in jobs and the infrastructure in the state.”

In addition to Sempra, the remaining portion of Cameron and the related liquefaction project will be owned by affiliates of GDF SUEZ S.A.; Mitsubishi Corp., through a related company jointly established with Nippon Yusen Kabushiki Kaisha; and Mitsui & Co. Ltd., each with 16.6 percent stakes.