A joint venture led by ExxonMobil awarded Fluor Corp. and two partners the $3.73-billion engineering procurement and construction contract for onshore facilities associated with a $30-billion liquefied natural gas project in Mozambique, the company confirmed October 8. The project would be Africa's largest private investment, said Bloomberg.

Japanese designer JGC will lead the consortium, which also includes U.K.-based TechnipFMC.

The owner joint venture, which also includes Italian oil and gas firm Eni S.p.A. and China National Petroleum Corp., holds a 70% interest in the Area 4 exploration and production concession contract, said Fluor.

Galp, KOGAS and Empresa Nacional de Hidrocarbonetos E.P. each hold a 10% share, said Fluor.

The project team will be located in the UK, France and Japan.

ExxonMobil will invest more than $500 million in the initial construction phase of the Rovuma LNG project to begin soon, officials say. It is expected to begin production in 2025 with a planned output of 15.2 million tons of LNG per year.

The EPC contract is for two natural gas production trains. “The awarding and execution of the onshore EPC contract is a significant step forward in developing the world class Rovuma LNG project,” an ExxonMobil spokesman told ENR.

Resources for the LNG project will come from the Rovuma Basin deep water block known as Area 4, known to contain more than 85 trillion cubic feet of natural gas. ExxonMobil purchased an indirect interest in Area 4 in 2017.

The spokesman said the EPC contract award was accelerated.

"This is a positive step in the process to eventually adding the project to Fluor’s backlog," said Bank of America/Merrill Lynch analyst Michael Feninger in an Oct. 8 research note. "We remain cautious on the LNG opportunity. On one hand, we acknowledged it is one of the few key growth areas in a capex-constrained backdrop for EPC contractors. That said, projects can have execution issues and ‘on time, under-budget’ project delivery is the exception, not the rule."

But he added that "developers with deeper pockets could be more amenable around risk parameters, valuing execution over lower cost."

Fluor CEO Carlos Hernandez told investors in a Sept. 24 announced strategic review that the joint venture is negotiating with project owners to "de-risk the project as much as possible," contending that the owners "recognized that the past model did not work."

A final investment decision is expected next year, and production is set to start in 2025, according to an ExxonMobil executive in Mozambique.

The Italian energy company Eni will lead a floating LNG project and all upstream operations.

ExxonMobil will lead the construction and operation of all future natural gas liquefaction and related facilities for Area 4, the company says.

The project’s construction is expected to create 5,000 local jobs. Two million hours of training are planned for local workers.