South Korea’s Samsung C&T Corporation has clinched a major deal worth up to $1 billion to build Singapore’s first liquefied national gas (LNG) terminal.
The Singapore LNG Corporation (SLNG) yesterday awarded the contract for the engineering, procurement and construction (EPC) of the terminal to Samsung.
The terminal’s total budget, funded by the government, is $1.5 billion, of which about S$1 billion is for the EPC contract, said SLNG executive director Neil McGregor yesterday. But the actual value of the contract to Samsung is undisclosed due to commercial sensitivity and is under $1 billion, he added.
Yesterday’s signing ceremony between SLNG and Samsung marked the start of a key energy project that has been beset with delays.
The project, originally mooted in 2006, was meant to be developed and operated by Singapore Power’s unit PowerGas and its French partner GDF Suez. But the global credit crunch which began in 2008 threatened the plans for completion which was slated for 2012.
The Government then announced in June last year that it would take over the development and ownership of the terminal, as it was central to Singapore’s energy strategy to diversify its sources.
LNG is natural gas cooled to liquid form and globally exported via tankers from source countries such as Australia.
SLNG said yesterday it has issued a notice to Samsung to start the detailed design, engineering and construction phases of the terminal immediately.
Mr McGregor said Samsung clinched the deal over its competitors due to its “novel and efficient design, which minised the footprint of the new terminal” and freed up land that catered for future expansion.
The other tenderers were CB&I (Chicago Bridge & Iron) and a consortium led by British company Whessoe and including SK Engineering and LG International.
EMA chief executive Lawrence Wong added that Samsung and its sub-contractors were experienced in developing LNG terminals internationally, such as in South Korea, Qatar and Mexico, and had solid track records in the industry.
“With the award of this contract to Samsung, we have taken a major step forward in the project, and can look forward to the start-up of the LNG terminal in 2013,” said Mr Wong.
Samsung senior executive vice president, Mr Jeong Ki Cheol, said yesterday that Singapore is a key priority for the firm, and he hopes to leverage on the firm’s expertise and experiences to deliver a successful LNG terminal on schedule.
The terminal, which is located on a 30 hectare site on the south-western part of Jurong Island, will have an initial capacity of 3.5 million tonnes per year, with provisions to expand to six million tonnes per year if needed.
SLNG yesterday also appointed Foster Wheeler Asia Pacific to be its project management consultant. Both firms will jointly manage the EPC contract.
Mr McGregor said the rest of the $1.5 billion budget will be set aside for a second jetty and extra storage tanks for the terminal, if needed, and development costs.
