Magnolia LNG executives announced Monday that SK Engineering & Construction Co. was selected for the project’s engineering procurement and construction contract.

SKE&C’s EPC contract will hold the company responsible for the project’s engineering, the procurement of materials and overseeing its construction. The contract has been forwarded to BNP Paribas, Magnolia’s project finance adviser and Merlin Advisors LLC, the lenders’ technical consultant.

A lender has yet to be chosen for the Magnolia project, said Ernie Megginson, Magnolia’s vice president of development.

The contract has also been sent to Stonepeak Partners LLC, Magnolia’s proposed project equity partner, for their final review together with its advisers, and to legal advisors White and Case for final review.

Megginson said SKE&C’s contract with Magnolia is expected to be signed and awarded before the end of the month.

“SKE&C does not do direct hiring for labor,” he added. “Their contract will be divided into several subcontracts of basic categories. They will then bid out those contracts for services by the middle of next year when we get to final investment decision.”

Based in South Korea, SKE&C was awarded Magnolia’s front-end engineering and design contract last May for the estimated $3.5 billion project. Shortly after receiving its FEED contract from Magnolia, SKE&C executives opened an office in Houston with room for 250 employees.

Megginson said SKE&C’s EPC contract recognizes that the company has finished its FEED responsibilities.

“(SK) finished the FEED process last month,” he added.

Magnolia LNG will consist of four LNG trains, which will be built along the Industrial Canal on 120 acres near the intersection of Henry Pugh Boulevard and Big Lake Road in south Lake Charles. Each train will produce 2 million metric tons per year of LNG, which will be stored in two, 160,000-cubic-meter cryogenic tanks.

SKE&C’s contract will cover Magnolia’s first construction phase — the plant’s initial two trains. If SKE&C is awarded the EPC contract at the end of the month, they will most likely be responsible for the plant’s final two trains as well, Megginson said.

If approved by federal officials, construction on the Magnolia LNG project is expected to begin by fall, 2015.(Special to the American Press)

Rick Hickman