CB&I still evaluating Hurricane Harvey impact on US Freeport LNG export project

Image courtesy of Freeport LNG

US-based LNG engineering company CB&I said Monday it was still assessing indirect impacts of Hurricane Harvey on the US Freeport LNG export project, controlled by billionaire Michael Smith.

Together with its joint venture partners, Zachry and Chiyoda, CB&I is building liquefaction infrastructure at the existing Freeport LNG terminal in Texas.

Each of the three liquefaction trains are expected to have a capacity in excess of 5 million tonnes per year. The project is also developing a fourth liquefaction train with a similar nominal production.

It was recently reported that the start date of the LNG export facility had been pushed back to September 1, 2019, for the first liquefaction train, mainly due to the effects of Hurricane Harvey that saw equipment lay-yards flooded.

Consequently, start-ups of trains two and three have also been pushed back to January 1, 2020, and May 1, 2020, respectively.

CB&I confirmed this in its first-quarter report saying that “expected completion dates on Trains 1, 2 and 3, respectively, are in the third quarter of 2019, the first quarter of 2020 and the second quarter of 2020.”

According to CB&I, the Freeport LNG project was 82 percent complete for Trains 1 and 2, and 63 percent complete for Train 3, as of the end of the first quarter of 2018.

The total project was approximately 81 percent complete, on a physical completion basis, it said.

As previously mentioned, the project was impacted by Hurricane Harvey during the second half of 2017.

The direct impacts of Harvey included the cost of demobilization and remobilization and damaged pipe and other materials.

“These direct impacts were included in our forecasts for the project during 2017 and were partially offset by an increase in project price for claims and anticipated insurance recoveries on the project,” CB&I said.

The engineering company said it was continuing to evaluate and estimate the indirect impacts of the Hurricane, including potential impacts to productivity and related prolongation costs.

The company expects to provide Freeport LNG with an estimate of the indirect impacts on the project in the second quarter of 2018.

“Such impacts have not been included in our forecasts, and although such impacts could be significant, we believe any costs incurred as a result of Hurricane Harvey (subject to unallowable costs which we have accounted for) are recoverable under the contractual provisions of our contract, including force majeure,” it said.

 

LNG World News Staff

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