Freeport LNG development, USA
Helping Freeport LNG to deliver its US$13.5bn expansion project in Texas, creating the most environmentally friendly gas liquefaction facility in the world
The shale gas revolution has fundamentally changed the US gas market, with current estimates suggesting the country has enough natural gas reserves to last 100 years. The increase in domestic natural gas resources has created an opportunity to export US gas in the form of liquefied natural gas (LNG).
Location: Texas, United States
Date started: 2013
Completion date: 2020
Client type: Natural resources
Key services: Cost, schedule, procurement, and site based project controls and performance services
Investment for the future
In 2012, Freeport LNG launched a multi-billion dollar natural gas liquefaction project to export LNG. As an existing import terminal, the transformation would require the construction of a new liquefaction plant and all related infrastructure including pre-treatment facility, pipelines, main electrical power works and marine docks, as well as modifications to the existing re-gasification facilities.
A crucial project for the region, Freeport LNG is the seventh largest LNG facility in the world and the second largest in the US. Its economic investment will result in 24,000 to 30,000 direct and indirect jobs created across the US. Furthermore, the facility is the first of its kind to operate with all electric motor driven compression which reduces emissions by 90 percent, making it the most environmentally friendly LNG facility in the world.
In recognising the challenges and complexity of delivering oil and gas mega-projects, Freeport LNG appointed us to provide a comprehensive, fully integrated project controls and cost management service. The managed service approach was to support crucial aspects of the project with the overall aim of reducing the risk and potential impact of cost and schedule overruns, while optimising investment for the project.
During construction, we supported a strong internal contracts and procurement process and held a key role on site providing contract administration and assurance that the project was meeting cost, schedule and performance expectations.
In addition, we leveraged our experience supporting the complexities of mega-project financing in today’s marketplace. We supported Freeport LNG’s tax department and advisors to determine the taxability of the EPC price components and assisted with the State of Texas Tax Authorities basis of taxation, enabling Freeport LNG to establish an informed basis of state tax valuation.
The final stage has been to prepare the project close out reports to capture information including best practice and lessons learned from every stage of the development and to help improve future performance.
End to end service
Our role on this major programme from the early stages has enabled us to provide Freeport LNG with assurance that the complex multi-billion dollar expansion project was being managed in a controlled and integrated manner. For seven years, we closely managed the schedule and costs and implemented best practice tools and processes. In doing so, our expertise supported Freeport LNG in achieving a successful final investment decision and to deliver full commercial operations for the project.
Mark Mallett, SVP-Operations and Projects at Freeport LNG says:
Turner & Townsend has been our key strategic partner on the project management team since before we made our final investment decision. Their experience and diversity of people, resources and processes and flexibility and promptness in providing key team members were a key to our success.”