Baker Hughes (BHGE) Wins Contract For Calcasieu Pass Project
Zacks Investment Research | Aug 20, 2019 09:48PM ET
Baker Hughes, a GE company (NYSE:BHGE) recently announced that it has secured a contract for the Calcasieu Pass project of Venture Global LNG. Baker Hughes is expected to provide modular liquefaction trains for the project. Moreover, its power generation and electrical distribution equipment will likely bring innovative technology solutions to the Calcasieu Pass project, located in Cameron Parish, LA.
Notably, this award is part of a master equipment supply agreement — which involves building 60 million tons per annum (MTPA) of production capacity — signed between Baker Hughes and Venture Global LNG.
Owing to the latest award for the Calcasieu Pass project and a series of new LNG contracts, Baker Hughes’s profit levels are expected to significantly improve. With growing demand for clean energy and the need to curb greenhouse gas emissions, countries around the world are investing in LNG terminals. This has given Baker Hughes the opportunity to expand its reach beyond oilfields, in order to capitalize on contracts to manufacture equipment that are being used in LNG facilities.
The LNG liquefaction train system that Baker Hughes will supply at the Calcasieu Pass project is expected to incorporate 18 modularized compression trains across nine blocks. The system is estimated to have a capacity of 10 MTPA. The modularized system to be provided by the company has low construction and operating costs, and requires lower installation time. This trait is expected to increase efficiency of the LNG project.
The company intends to manufacture, assemble and test the modules in its plants located in Italy. Once the modules are built, these will be transported to the project site. Baker Hughes expects the deliveries of equipment to commence in second-half 2020, with full commercial operations expected to start within 2022. Notably, the Federal Regulatory Energy Commission greenlighted the project earlier this year.
The project has already secured 20-year supply deals with several clients, including the likes of Royal Dutch Shell (LON:RDSa) plc Zacks Investment Research
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