Singapore LNG misses deadline for selecting contractor

It was scheduled to award the main EPC contract by end-'09
Ronnie Lim, Business Times 4 Jan 10;

(SINGAPORE) Singapore LNG Corporation (SLNG) has missed an end-2009 deadline to appoint an engineering, procurement and construction or EPC contractor to build the earlier-delayed $1-1.5 billion LNG terminal on Jurong Island - although from various accounts, there is just a slight slippage in the schedule, with sources saying that SLNG is 'in the final negotiation stage' regarding the contract.

SLNG, set up last July by the Energy Market Authority to take over the terminal's development, was scheduled to award the main EPC contract by end-2009, so that construction proper can start this month, with the LNG terminal becoming operational in 2013.

As is, work on the terminal - earlier scheduled to begin operations in 2012 - is one year late as the earlier developer, PowerGas and GDF Suez, 'found it challenging to develop the project on a commercial basis and on time' due to the economic downturn and 'more difficult and costly financing' during the credit crunch.

'We are going through the (award) process and things are on track,' a source assured, when asked if there were any serious issues hampering the award of the EPC contract.

Three shortlisted EPC groups are vying for the project. They comprise CB&I (Chicago Bridge & Iron); a consortium led by British company Whessoe and including SK Engineering and LG International from South Korea; and South Korea's Samsung.

Senior officials overseeing the LNG terminal development, including EMA CEO Lawrence Wong, have been on leave and were not available for comment.



Mr Wong earlier said that the EPC award for the terminal will be made by year-end - a deadline which is also indicated on EMA's website.

The terminal, to be built on a 30-hectare site, will comprise two 150,000 cubic metre tanks with storage capacity of three million tonnes per annum, with plans to double this at a later stage.

The LNG is meant to help Singapore diversify its supplies of natural gas - used by power stations and industries here - currently coming via pipeline from just Indonesia and Malaysia.

Singapore's largest generating company Senoko Power, for instance, just started construction of its earlier deferred $750 million re-powering project last month - to tie in with development of the LNG terminal - so that it can use the LNG once its own repowering project is ready in the third quarter of 2012.