Daewoo E&C Cleared to Join as Main Contractor in Mozambique Mega LNG Plant Construction and Operation

Letter of Intent for Award Received from Local Project Owners

On August 7, Daewoo Engineering & Construction announced that a plant construction consortium it has joined has been selected as the EPC (Engineering, Procurement, and Construction) contractor for the first phase of a large-scale liquefied natural gas (LNG) development project being promoted in Mozambique. The consortium recently received a letter of intent for award from ExxonMobil Mozambique, the project's lead developer, and will proceed to review front-end engineering, procurement, and constructability.

This is part of the process of selecting a contractor in charge of midstream engineering, procurement, and construction for the Mozambique Rovuma LNG Phase 1 Project. For this project, Daewoo Engineering & Construction partnered with Italy's Saipem, U.S.-based McDermott, and China's CPECC to form the global consortium SMDC Joint Venture (JV) and participates as the main contractor to carry out the project.

This letter of intent for award serves as a step for refining the initial engineering design, procuring key equipment, and reviewing constructability before a full-scale groundbreaking begins, following the final investment decision (FID). According to the project owners, they plan to reach the final investment decision by the end of this year and commence construction through a formal contract.

The project client MRV, in which ExxonMobil is the main player alongside Italy's state energy company ENI and China's oil giant CNPC, holds a 70% stake. The remaining 30% is divided equally among Mozambique's state oil company ENH, Korea Gas Corporation, and Abu Dhabi National Oil Company. The project involves building and operating facilities for the development of natural gas from the Area 4 block, a massive offshore gas field in northern Mozambique.

Mozambique Rovuma LNG Phase 1 Project

The Mozambique Rovuma LNG Phase 1 Project involves constructing LNG liquefaction facilities with a gross capacity of 18.6 million tons per year, a large gas-fired combined-cycle power plant for electricity supply using electric motors instead of gas turbines, and other ancillary facilities. The project is being promoted as an eco-friendly LNG liquefaction plant. Commercial operations and the first trial runs are planned for around 2031. Although the precise project cost has not been disclosed, overseas industry reports categorize it as a mega-project totaling over 30 billion dollars, or more than 40 trillion won.

Historically, the overseas LNG liquefaction plant construction market has been dominated by a handful of global players such as Bechtel and McDermott in the U.S., JGC and Chiyoda in Japan, and Saipem in Italy. Domestic construction firms have mostly participated only as subcontractors in the construction field. In 2020, Daewoo Engineering & Construction became the first Korean construction company to join as a main contractor by forming a consortium with overseas EPC companies in Nigeria. The company is now recognized for its technical reliability and construction capabilities abroad.

Daewoo Engineering & Construction is the only Korean construction firm with experience and technical competitiveness across the entire LNG supply chain. It has built as many as 25 LNG storage tanks domestically and proven its technology in Papua New Guinea, Sakhalin, and Nigeria.

A company representative commented, "Receiving this letter of intent (LOI) signifies that domestic construction companies have overcome the limitations of being relegated to the subcontracting level and have gained recognition as capable of leading projects alongside top-tier global EPC players. We will solidify the company’s mid- to long-term growth engine through thorough risk management and technological excellence."

This content was produced with the assistance of AI translation services.