Second Wave of LNG Projects May Have New Construction Tactics

The Houston Chronicle reported that the “second wave” of LNG projects is finally here. In the last year, there has been a flood of approvals for new energy projects in the U.S. and abroad. These projects will break ground in the coming months, while construction on the first wave of LNG facilities nears completion. Some of the new projects include the $10 billion Golden Pass LNG export terminal in Texas, and the Mozambique LNG project in southeast Africa.

The next LNG project boom will bring jobs for engineers, procurement and construction contractors and bring billions in capital expenditure. As additional LNG facilities are approved and the existing projects are reaching peak production numbers, it is crucial that the U.S. continue to build pipeline infrastructure to maintain the flow of product to market.

According to the Houston Chronicle:

“James West, an analyst with the investment banking advisory firm Evercore ISI estimated that nearly two-thirds of the costs of building an LNG plant come from construction and equipment, providing business opportunities for oilfield services companies.”

While the first wave of projects were known for delays in construction and cost overruns, analysts warn against this for the upcoming developments. The cost to build a facility is undoubtedly burdensome, but West believes that two companies are on the right track offering solutions to avoid the hefty upfront costs. Baker Hughes of Houston TechnipFMC and Chart Industries of Georgia are building modular, emissions-reducing turbines that can be shipped to LNG plants and easily connected to existing equipment. Their modular shape allows them to ship easier and be assembled in harsh environments.

Innovation and forward thinking are the pillars to successful projects and as LNG exports and oil and gas production continue to evolve, we must maintain the energy infrastructure to move the products to market and to communities across the nation.


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