LNG JOBS: ARE THEY A CARROT FOR TAX ABATEMENTS?

(Update on Rio Grande LNG's sales pitch to investors and VIPs. Note that the company is planning to use a lot of workers currently working on comparable CB&I projects in the Gulf of Mexico. Quote from CB&I web site: "CB&I is a leading provider of technology and infrastructure for the energy industry. We offer career opportunities across multiple disciplines for professionals, skilled craft and field supervision, U.S. military veterans, and for students and recent graduates".)

Rene van Vliet, chief operating officer of NextDecade and director of his own gas-and LNG-focused consultancy, took time to correspond with OGJ via e-mail as he works to push Rio Grande LNG toward tangibility. His involvement in global LNG projects spans more than 3 decades.

In light of the massive costs associated with building an LNG facility and the prospect of near-term saturation in the market once the US projects currently under construction come online, he remains confident in Rio Grande LNG's competitiveness vs. its domestic peers and those around the world.
 

"Our analysis, supported by many independent parties such as [WoodMac] and McKinsey [& Co.], confirms that the US is by far the lowest cost location for LNG projects currently under development and [our] project is the most competitive among all other US greenfield projects," he said. "In fact, only a few brownfield developments are slightly lower in cost thanks to existing infrastructure."
 

Van Vliet said the NextDecade team has a longstanding relationship with FEED and EPC contractor CB&I having worked together on various projects through the years. "NextDecade's team and CB&I's team have been working closely together in a partnership relationship rather than an owner-contractor relationship, cultivating increased two-way communication between parties," he explained. "Based on the FEED work we have now entered into an open book estimate (OBE) process for the EPC.
 

"NextDecade focuses on key areas with a lean owner's team specializing in project development, management, and execution. Our team works closely with CB&I and other subcontractors, consultants, and suppliers. For example, we have partnered with industry-leading consultants and subcontractors in areas including regulatory and permitting, environmental, civil, marine, air and noise modelling, compressors, rotating equipment, electrical, and instrumentation.
 

With construction slated to begin in less than a year, NextDecade has had "intensive discussions with CB&I about their training programs for construction labor," said van Vliet. "CB&I has been successful in recruiting and training a significant group of labor from South Texas, in particular the Rio Grande Valley, where our project will be built. Many of these workers are currently occupied on comparable CB&I projects on the Gulf of Mexico, and, as such, will be suitably prepared for our project when it moves forward. In addition, the anticipated timing of our project is advantageous as many other projects will be winding down as ours ramps up, helping to ease the strain on workforce resources.
 

"One of CB&I's distinguishing characteristics versus other EPC contractors is that CB&I utilizes its own construction workforce, helping to reduce cost and raise quality," he said. "CB&I does not subcontract all of its construction work and simply act as a managing contractor."

 

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http://www.ogj.com/articles/print/volume-114/issue-11/special-report-worldwide-construction-update/us-shale-gas-advantaged-projects-strain-toward-finish-line.html: