SK E&C, a leading engineering and construction company based in Korea, recently won a project for constructing a large-scale natural gas liquefaction plant in the United States, the first such project won by a Korean construction company.
SK E&C said that it successfully received an order from Magnolia LNG for a project of constructing a natural gas liquefaction plant in the value of US$4.35 billion with a capacity of producing 8 million tons of liquefied natural gas a year in the area near the Lake Charles, Louisiana, by forming a joint venture with the U.S.-based Kellogg Brown & Root (KBR).

The joint venture with stakes of 30% (US$1.306 billion) and 70% (US$30.48 billion) owned by SK E&C and KBR, respectively, concluded a contract with Magnolia LNG on engineering, procurement and construction (EPC) basis. Starting pre-project planning in this month, SK E&C will launch the construction work in April 2016 when project financing is concluded, aiming to complete the construction project by 2020.

The natural gas liquefaction plant construction has been virtually monopolized by global major companies such as U.S.-based KBR and Bechtel as well as Japan-based JGC and Chiyoda Chemical E&C. It is significant for a Korean construction company to penetrate into the natural gas liquefaction plant market that requires top-notch technological expertise and construction experiences.

In 2008, SK E&C successfully completed the basic design project of a natural gas liquefaction plant for Australian Pacific LNG

the parent company of Magnolia LNG. With this project, Magnolia LNG obtained original technogies for liquefying natural gas.

A manager at SK E&C said, “Original technologies for liquefying natural gas of Magnolia LNG will be first applied to the new plant. We expect to reduce considerable amount of investment and carbon emissions by simplifying production processes at the new plant.”

SK E&C is expected to gain competitive advantage in the global natural gas liquefaction plant construction market in the future. Above all, SK E&C is anticipated to receive additional orders since Australian Pacific LNG is seeking to construct natural gas liquefaction plants in Canada and Mexico.

The manager at SK E&C added, “We are excited to pass the high barrier of global natural gas liquefaction plant market, a testament to our excellent technology prowess. We will acquire chances of additional orders while enhancing status of Korea-based construction companies by successfully completing the new project.”

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