W|EPC: LNG Canada Q320 Monitor – Labor Dynamics & Baseline Satellite Image Review - Webber Research

W|EPC: LNG Canada Q320 Monitor – Labor Dynamics & Baseline Satellite Image Review

August 2020

Total Pages: 17

Table Of Contents

  • LNG Canada Q3 Monitor:  Key Takeaways
  • Union Labor Agreements
  • Contract Analysis & Estimates
  • On-Site Construction Progress
  • Awarded Construction Contracts
  • Future Construction Contracts
  • Labor Availability
  • Project Estimates
  • Satellite Image Analysis
  • Baseline Site Satellite Image Overview
  • Marine Terminals
  • LNG Process Area
  • LNG Storage Tanks
  • Disclosures                                                                                                                                       

Key Takeaways:

1) Union Craft Avg. Wage Rate Escalators & Impact On JGC/Fluor, and broader project cost…

What’s Happened/Changed: Part of our current focus is on LNG Canada’s wage rate escalation and union labor agreements post-2023.
Why Does That Matter: EPC lump sum proposals generally include labor escalation between 1-3% per annum (rates vary based on geography/availability). Labor agreements supporting LNG Canada and other B.C. projects expire in 2023 and have a relatively advantageous average labor escalation rate of…..continued.
For context, union labor strikes, renegotiated agreements, and significant wage rate escalation supported Gorgon LNG coming in $20B+ over budget. 
What’s The Impact:…..continued (Page 3)

2) Taking A Look At JFJV’s Longer-Term Labor Inflation Risk (Page 5)

3) JFJV’s Construction Activity – What does it tell us about the project timeline? (Page 8)

4) Satellite Image Analysis Baseline –  Benchmarks for Remainder of the Project…. (Pages 9-17)

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