2015 Bechtel Reports

 

The oil, gas, and chemicals industry has shifted dramatically. The drop in oil and gas prices, alternative energy sources, expanding competition, economic turmoil, and robust reserves have steadily increased the supply of energy. At the same time, demand is growing at a slower pace, causing producers and refiners to prioritize and reduce capital expenditures.

Sabine Pass Liquefaction Project LA, USA

Oil, Gas &
Chemicals

Bechtel is a global leader in the integrated design, procurement, construction, and project management of oil, chemical, and natural gas processing facilities. Our customers rely on our expertise to deliver liquefied natural gas capacity, refineries and petrochemical plants, pipelines, offshore facilities, tanks, and terminal facilities.

Bechtel is responsible for a third of the world’s LNG liquefaction capacity under construction, with projects on three continents. Led by the robust LNG work, our OG&C business unit continued its strong performance worldwide.

On Curtis Island, in Queensland, Australia, our three simultaneous construction projects for three separate customers—Queensland Curtis LNG (QCLNG), Gladstone LNG, and Australia Pacific LNG—represent the largest concentration of private capital investment in Australia’s history. We continue to achieve unprecedented firsts in the building of three adjacent LNG liquefaction plants, including starting LNG production for QCLNG on schedule, delivering all 260 modules required for the three plants, and employing and training 400 adult apprentices—the largest single class of apprentices in Australian history.

In North America, we are working with Cheniere Energy, Inc. to transform the Sabine Pass terminal, in Louisiana, into the first LNG export facility in the contiguous United States. In 2014, 6,000 workers were employed, and we made significant progress on the project. First exports are scheduled for late 2015. Elsewhere in the region, we were selected for two other LNG export facilities: the design and build of a second facility in Corpus Christi, Texas, for Cheniere; and the design of a midscale liquefaction facility and export terminal in Louisiana, for Parallax.

Construction began on a new liquefaction train at the Tilbury LNG plant in British Columbia, Canada, for FortisBC. The expansion includes a new 1.6-million-cubic-foot (46,000-cubic-meter) full-containment storage tank.

Our partnership with Linde—a leading supplier of industrial, process, and specialty gases—resulted in two new projects. In June, we started construction of a multibillion-dollar ethylene plant at ExxonMobil’s Baytown Complex, in Texas. Shell Chemical selected Bechtel to perform front-end engineering and design work for a multibillion-dollar ethylene and polymer plant, in Pennsylvania.

Queensland Curtis LNG Queensland
Queensland Curtis LNG, Queensland

Market Opportunities

  • Mexico: Oil and gas exploration is growing in part due to legislative changes that opened up the market to global partnerships.
  • Sub-Saharan Africa: Governments seek to tap into their nation’s natural resources to produce energy and to apply revenues derived from exports to fund needed infrastructure projects.
  • LNG: There is an emerging market for midsize facilities. These smaller solutions are less capital-intensive, can be constructed rapidly, and are easily aligned with existing pipelines. In 2014, dozens of companies in the United States submitted applications to the U.S. Department of Energy to build LNG export facilities though recent price changes are likely to cause the shale gas industry to not sustain its recent and rapid development.
  • Petrochemicals: Cost-competitive natural gas is helping the U.S. petrochemical industry, which uses the gas and its byproducts, like ethane and propane, in manufacturing. We see a marked increase for fertilizer, propane dehydrogenation, and ethane cracker facilities.

Select 2014 Accomplishments

  • Completed Chevron’s new lubricants manufacturing facility in Pascagoula, Mississippi; the plant will manufacture 25,000 barrels per day of premium base oil, the main ingredient in the production of top-tier motor oil
  • Awarded a contract to support the South Caucus Pipeline Expansion project, in the country of Georgia
  • Awarded a contract to provide engineering, procurement, and construction services to build four crude-oil storage tanks at the Tengizchevroil oil production facility, in Tengiz, Kazakhstan

Looking Forward

We are optimistic about 2015 and beyond as we balance and align prospects with the geopolitical and economic climate. To better meet evolving customer needs and fast-changing market demands, we are:

  • Diversifying our customer base and offerings in our LNG, offshore, onshore, petrochemicals, tanks, and pipeline businesses
  • Expanding our presence in North America, Africa, the Middle East, and Southeast Asia
  • Positioning the business to take advantage of the emerging smaller-scale LNG market
  • Employing innovative processes, such as our integrated self-perform modularization program
  • Enhancing our world-class direct-hire construction execution capability in order to respond to our customers’ challenges to control project costs, ensure schedule certainty, and raise financing

We continue to pursue work around the globe where the business environment aligns with our values and the market conditions support the development of projects.