Sempra revisits choice of Bechtel on Cameron LNG expansion to cut costs
5/13/2024
Sempra LNG is revisiting its selection of Bechtel to build its Cameron LNG expansion project in Louisiana due to rising construction costs, two people familiar with the matter told Reuters.
The Sempra-Bechtel pricing dispute reflects a broader hike in construction and labor costs that are affecting several U.S. liquefied natural gas (LNG) export projects under development and threaten to further delay others. Sempra "has gone back out for an EPC (engineering procurement and construction) contractor for its expansion project," one of the people familiar with the matter said. "High demand for skilled labor for plant construction is causing costs to rise and making some projects too expensive to build," the person added.
Sempra LNG operates Cameron, the third largest U.S. LNG export plant, and is constructing facilities in Mexico and Texas in addition to pursuing the expansion of the Louisiana plant. Cameron LNG Phase 2, a venture between affiliates of Sempra LNG, TotalEnergies, Mitsui and Japan LNG Investment LLC, aims to expand the capacity of the three trains at its 12 MMtpy facility and add a fourth.
Sempra LNG CEO Justin Bird had told Wall Street analysts in March that it was "working with Bechtel on value engineering. And at this stage, we feel it's best to continue those efforts while evaluating other potential EPC contractors."
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