Magnolia LNG lets EPC contract to SK E&C USA

Magnolia LNG LLC parent-company Liquefied Natural Gas Ltd. agreed to an engineering, procurement, and construction contract with SK E&C USA covering installation of Magnolia’s initial 4 million-tonne/year (tpy) liquefaction capacity, two 160,000-cu m storage tanks, a jetty and related ship-loading equipment, and all required approvals and licenses for the full 8 million-tpy project.

Initial liquefaction capacity will come from two 2 million-tpy trains, with similarly scaled Trains 3 and 4 to follow. All trains will use LNG Ltd.’s proprietary optimized single mixed refrigerant process technology.

LNG Ltd. expects to execute the contract later this month, pending legal review and board approval. It estimates capital costs of the contracted work at $1.986 billion of a total project cost of $3.5 billion. SK prepared the turnkey EPC cost estimate as part of technical services agreement it reached with LNG Ltd. earlier this year (OGJ Online, Apr. 15, 2014).

The companies will begin construction once all necessary approvals and licenses are received, with first LNG scheduled for 2018.

Contact Christopher E. Smith at [email protected].