News Releases 2017

Jun. 02, 2017

JGC Awarded Africa's First Floating LNG Project

Yokohama, Japan – JGC Corporation announced today that, in partnership with TechnipFMC, Samsung Heavy Industries Co. Ltd. has been awarded a contract for the construction of a Floating Liquefied Natural Gas (FLNG) facility to be installed in the Coral gas field, offshore, in the Republic of Mozambique (approximately 50 km offshore near the Tanzania border at a depth of 2,000 m) by Coral FLNG SA.

The lump sum turnkey contract calls for engineering, procurement, construction, installation and commissioning (EPCIC) work for a FLNG facility with a production capacity of approximately 3.4 million tons per year.

The project will be the first FLNG facility to be constructed for the offshore gas fields in the Republic of Mozambique near the border with Tanzania. The joint venture between JGC and TechnipFMC will be responsible mainly for the engineering and procurement work for the FLNG topside and the management of the overall project. In addition, consortium partner Samsung Heavy Industries will be responsible for the EPC work for the FLNG hull and the fabrication of the topside.

This project is the fourth FLNG to achieve Final Investment Decision (FID) in the world. JGC will be responsible for the EPC work for two of them, the other being the FLNG project for PETRONAS (Malaysia's national petroleum company). Moreover, the FLNG facility to be constructed in this project will be the first FLNG project for a deep water gas field at water depths 2,000 m or more. As such, it is a pioneering project for the offshore oil and gas industry.

Coral FLNG SA awarded contracts to three groups including our consortium for basic design (FEED; front end engineering and design) services. As a result of competitive bidding based on the three basic designs of the three groups, our group was awarded the contract for the entire EPCIC services. It is our view that our consortium secured the order on the basis of the top class results and outstanding EPC execution capabilities of JGC and TechnipFMC and the superb shipbuilding capabilities of Samsung Heavy Industries in this field, as well as the result of JGC's strong leadership backed by excellent project management know-how that we demonstrated during the FEED stage and the EPCIC bidding process.

In Mozambique, a major offshore gas field was discovered in recent years and multiple development projects are currently under consideration. However, this will be the first materialized project that utilizes gas produced from the gas field. Multiple LNG and other gas-related projects are being planned in Mozambique, and we hope that this new contract will serve as our foothold in expanding our operations in the country.

Moreover, we consider Mozambique and Africa more broadly to be an area for market expansion under the Medium-Term Business Plan "Beyond the Horizon." In particular, there are many small, undeveloped offshore gas fields in the coastal waters of Africa, and many projects are being planned including FLNG facilities. Going forward, JGC intends to complete this project successfully and aim to expand our business in Africa where future growth is expected, while continuing to contribute to the further industrial development and the enhancement of the foundations of the people's lives in the region.

Details of Counterparty

Coral FLNG SA (incorporated in Mozambique)

(Investment ratio)

ENH FLNG UM, S.A. 10 %