LNG Projects

W|EPC: Mozambique LNG – Baseline Report & On-Site Satellite Image Analysis (Q121). Baseline Report & On-Site Satellite Image Analysis – Project Owners: Total, Mitsui, ENH, PTT, etc. – LNG Buyers: Tokyo Gas, JERA, Centrica, Shell, CNOOC, EDF, etc

W|EPC: Analyzing Energy Project Contract Terms – Risks, Strategies & CompsKey Takeaways:1) Analyzing EPC Risk Avoidance: Comps & Techniques For Investors, Owners, & Contractors    W|EPC analyzed ~$20B of publicly available EPC lump sum turn-key (LSTK) contracts, focusing on sensitive or contentious terms used to allocate risk, manage performance expectations, & establish a framework for third-party indemnification and liquidated damages, etc. (Pages 3, 5-7, & 9-17).  Specific points of emphasis:Investors: Leveraging a project’s future expansion plans to protect ROE and/ maximize options (ROFR) options. (Pages 5, 9-11)Owners: Finding & justifying onerous contract terms as market or on-the-run. Contractors: Avoiding those onerous contract terms.2) Analyzing Notable Risks:    Liability & Indemnity: Existing Facilities can be problematic for Contractors & expose stakeholders. (Pages 5, 9-11)• Performance Guarantees & Damages: Numerous performance guarantees were publicly disclosed (likely inadvertently) that illustrates risks & production, emissions, and/or power consumption liabilities. (Pages 6, 12-14)• Technical Risk Allocation: One project’s subsurface provisions are tighter and limit change orders provisions for differences in soils data. (Pages 7, 15-17)

W|EPC: LNG Canada – Updated Satellite Image Analysis & Construction Progress – Q420 Project Monitor Delays At LNG Canada Continue to Build (Pages 4 – 7, 10 – 13):   Fluor reported ~27.5% Engineering, Procurement, Fabrication, & Construction (EPFC) progress in September, vs our current estimate of…We believe Fluor’s 27.5% guidance implies module fabrication progress of ~45%, which is ~9x…Fluor also referenced COVID-related project delays (without getting specific)Our Current Delay Estimate:…..Estimated Probability Of Maintaining Schedule:…..Mind The Gap: There are several potential explanations for such a degree of progress variance…

LNG Canada: Detailed Labor Review, Project Estimates, & Baseline Satellite Image Analysis (Shell, Petronas Kogas, Petrochina, Mitsubishi)

Gorgon LNG – Pump The Breaks On Crack Narrative: While potential fabrication errors have been the primary narrative around the Propane Kettle cracks that shut down Gorgon LNG, it’s feasible that operational issues (and one in particular) may have contributed or even partially caused the cracks on Train-2’s kettles, which could have significant and more complex implications.

W|EPC: Golden Pass LNG (XOM, QP) – Delay & Contingency Fund Estimates Continue To Ramp – Updated Project & Satellite Image Review

LNG Canada: Detailed Labor Review, Project Estimates, & Baseline Satellite Image Analysis (Shell, Petronas Kogas, Petrochina, Mitsubishi)

W|EPC: LNG Canada Update – Troubles Ahead For Shell’s LNG Flagship?

NGL Frac’s 7/8 BPD cost is ~36% lower than NGL Frac #1’s ($2,233 vs. $3,500) even though construction wages increased ~18% ($56.1K vs.
$66.2K). Note: an optimized engineering design, lessons learned, shorter schedule, and/ or sharing of common utilities and offsite facilities are
possible explanations for this improvement.