, Port Arthur, Texas

October 9, 2012

Cheniere briefs businesses on bidding process for expansion project

Brooke Crum
The Port Arthur News

PORT ARTHUR — As Cheniere Energy begins expanding its liquefied natural gas facility in Sabine Pass, the company is looking for local contractors to help with the $10 billion project.

Cheniere Energy Inc. received a permit several weeks ago that allowed the company to go ahead with construction of the liquefied natural gas import, export and storage facility — the first of its kind — on the Louisiana side of Sabine Pass. Construction would take about five years with 3,000 construction workers employed at the peak period, said Jason French, spokesman for Cheniere.

The energy company held a business seminar Tuesday afternoon for potential contractors in conjunction with the Greater Port Arthur Chamber of Commerce. Joe Tant, financial and administrator manager for the chamber, said 105 people attended the seminar at Lamar State College-Port Arthur.

Elizabeth Cravens, owner of Mid-America Contractors, attended the seminar to see what requirements Cheniere had for its contractors and how her company could become a part of the project. Mid-America Contractors, a member of the Historically Underutilized Business Program, would be able to provide insulation and building services during the project. The company was licensed to do work in both Texas and Louisiana.

With opportunities like this one available, Cravens said she wanted to be able to expand her business like she had not in the past.

Kenny Tims Sr., president of KT Maintenance Co. Inc., went to the seminar for similar reasons. The opportunities available through the Cheniere project were enough to incite his interest and that of his industrial contractor company.

KT Maintenance, which is also a member of the HUB program, could provide certified safety attendants and labor flaggers to ensure the safety of the project. But what excited Tims the most was the fact that Cheniere was seeking out local contractors to assist with the project.

“They’re not just making an effort. They’re making it happen for downtown Port Arthur companies that want to participate,” Tims said about Cheniere. “They’re reaching out to Port Arthur contractors.”

Cheniere’s 1,000-acre facility would be expanded to become the first liquefied natural gas exporter in the continental United States, according to the company’s fact book. And though Bechtel Corp. has been selected as the major contractor for the construction project, Cheniere would still need additional subcontractors to work with Bechtel, French said.

“There are plenty of opportunities on a $10 billion project for local work,” French said. “And we are monitoring that.”

The company meets weekly to discuss local contracts, and the company’s own field procurement team would start work in December. The project would promote price stability in the natural gas market and reduce the U.S. trade deficit by $7 billion the day the project is completed and the facility is operating, French said.

Cheniere has slotted more than $2.3 billion for U.S.-sourced materials and equipment and more than $1 billion for construction wages and benefits, French said.

On average, about 1,800 workers would be on site each day during the five-year construction period for a total of 13 million man hours, French said. Upon completion, about 180 direct jobs and anywhere from 30,000 to 50,000 indirect jobs would be the result of the project.

Concrete would not be poured until the beginning of next year, and the first major equipment installation would occur in early 2014, French said. The project was expected to be completed in 2017.

Cheniere would have four guaranteed customers for 20 years due to contracts it has with the Korea Gas Corp.; GAIL Ltd., a government of India-based gas company; Gas Natural Fenosa, the largest gas and electricity company in Spain; and British Gas, the largest buyer of liquefied natural gas in the world, French said.