LNG Qatari Projects on Schedule
French energy company Total’s liquefied natural gas
(LNG) projects worldwide have so far been sheltered from surging
building costs due to its project management strategy, a company
official has said.
Total is the world’s second largest LNG producer,
with 2006 sales at 8.6mn tonnes and sales forecast to grow by 13% a
year on average until 2010, it said.
“The projects Total is involved in were organised and
launched in a context that allow them to escape the recently
observed price overshoot,” said Jean-Marc Hosanski, Total’s senior
vice president for LNG.
Plants to produce LNG, gas which is frozen into
liquid form for loading onto tankers, are springing up in Africa,
the Middle East and elsewhere. The surge in projects has helped to
raise construction costs, meaning some schemes may no longer be
“I’m talking here of the train 6 project in Nigeria
and the Yemen LNG scheme, which are currently being built, and which
have largely escaped the price surge,” Hosanski said.
He added that Total had always been particularly
careful to manage its projects in a way that avoided raising cost
“We adapt the contractual structure to the market
structure,” Hosanski said, adding that this did not mean the company
had completely escaped cost increases.
The doubling of costs seen on some projects, he said,
were due more to bad project management than a rise in costs.
As an example of sound management, he said the company grouped its
drilling rig orders in west Africa, where Total has most of its
drilling activity. – Reuters