Africa French LNG & GAS Oil and Gas

Saipem wins $6bn contract for Mozambique LNG construction

Saipem, the Italian energy services company, has won the biggest contract in its history after being awarded a $6bn deal to construct a major liquefied natural gas project in Mozambique.

The contract for Anadarko’s LNG project in the east African country, will see Saipem lead a joint venture with US-based McDermott International and Japan’s Chiyoda Corporation for construction of the site once a keenly anticipated final investment decision is taken.

Executives at Saipem will hope the deal marks a dramatic turnround for a company that was hammered during the oil price slump, with the services industry suffering from over capacity.

Saipem’s shares have lost more than 80 per cent since the $100-a-barrel era ended in 2014, leaving it with a market capitalisation of just $4.7bn. Stefano Cao, Saipem’s chief executive, said the contract was the result of “many years of dedication to this project”.

“With this project, we will strengthen our presence in east Africa, confirming Saipem’s role among the leaders in the LNG market,” Mr Cao added. It is unlikely to be Anadarko running the project upon its completion, however. The US company was bought last month by Occidental Petroleum in one of the biggest oil deals of the last decade, after a close-fought battle with Chevron.

As part of the deal Occidental is expected to sell Anadarko’s African assets, including the LNG project in Mozambique, to France’s Total.

Saipem said the contract consists of the construction of two LNG trains, with a total nameplate capacity of 12.9m tonnes per annum, alongside additional infrastructure for the project such as storage tanks and export jetties.

Source Financial times

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