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W|EPC: Golden Pass LNG – Delay & Contingency Fund Estimates Continue To Ramp – Updated Project & Satellite Image Review
Total Pages: 18
Table Of Contents
- Golden Pass Q320 Update – Key Takeaways (page 2)
- Revised Cost & Schedule Forecasts (page 3)
o Cost Forecast (page 4)
o Project Milestones (page 5)
o Progress Analysis (page 6)
o Analysis – Chiyoda’s 16% Reported Progress (page 7)
o Putting It All Together – W|EPC updated contingency fund and project delay estimates
o 18-Months After FID, Sabine Pass vs. Golden Pass LNG (page 8) - Joint Venture Analysis (page 9)
o Change Order Analysis vs. JV Structure (page 10)
o Possible Impacts to Chiyoda (page 11) - Satellite Image Analysis (page 12)
- Disclosures (page 17)
Key Takeaways:
1) Chiyoda’s Engineering Delays Continue. We believe engineering delays have eroded a significant portion of the EPC risk, contingency, and profit, with the likelihood of ramping balance sheet exposure. (Pages 4 & 11)
2) Timeline & Cost Overrun Estimates. Our updated project timeline (delay) and contingency fund estimates are now material, sitting at….(continued)
3) Our estimates point to Golden Pass project progress sitting closer to ~10% vs Chyioda’s report figure of 16% (Q2) based on both our satellite image review and….(continued)
4) Sabine Pass Comparison. 18-Months after FID Sabine Pass LNG Trains 1 & 2 were 57.1% complete, vs our estimated range for Golden Pass LNG (~10-16%). (Page 8)
Golden Pass LNG Satellite Image Overview (page 13)
Venture Global & The Approaching Nexus – Drone & Satellite Image Analysis, Engineering Changes – Q320
Total Pages: 27
Table Of Contents
- Calcasieu Pass Update – Key Takeaways
- Calcasieu Pass – Module Overview
- Importance Of The Notification Window
- Engineering Changes: Pre-Treatment Modules
- Engineering Changes: Liquefaction Modules
- Technical Analysis: Changes & Impact?
- Satellite Image Analysis – BH Module Yard
- Drone Image Analysis – Site Prep Update
- Remaining Questions
- Scenario Analysis & Predictions
- Disclosures
Key Takeaways:
1) We believe there’s a path to success (and underestimating Venture Global has been generally been a dangerous proposition) – however the late-stage engineering changes create a risk that’s worth watching.
2) Directly or indirectly, we believe the ultimate resolution to Calcasieu Pass will impact several aspects of the LNG supply chain – including competing projects, technology providers, and EPC partners. (page 22)
3) Module Delivery Sequencing Is Important. For context, KMI/Elba Island provided liquefaction modules to their EPC contractor (IHI E&C) 11-months late, which contributed to claims & >$300MM in forecasted change orders.
4) BKR’s Module Fabrication. Satellite images suggest Baker Hughes is installing….. (pages 14-17)
