GDF Suez, Marubeni seek new Uruguay LNG contractor

OREANDA-NEWS. A project to install an LNG regasification terminal in Uruguay this year has fallen behind schedule following the bankruptcy of a Brazilian contractor embroiled in a sweeping corruption case centered on Brazils state-controlled Petrobras.

GNLS, a joint venture between Frances GDF Suez and Japans Marubeni, terminated an engineering, procurement and construction (EPC) contract with Brazilian firm OAS on 17 March. It has launched a tender for a replacement under an EPCM contract that also includes management, GDF Suez told Argus today.

"GNLS is in an advanced stage of analysis of the offers in order to seek approval from its stakeholders, including Gas Sayago, to move forward," the company said.

GDF Suez did not immediately comment on whether it still plans to install its Neptune regasification vessel as a project bridge in the third quarter, as originally planned.

GNLS has a contract with Gas Sayago, a joint venture between Uruguayan state-owned oil company Ancap and state-owned utility UTE, to install the 10mn m?/d floating GNL del Plata terminal in the La Plata river off the Uruguayan capital of Montevideo.

Gas Sayago could not be reached for comment ahead of the Easter holiday. Ancap and UTE have yet to sign a contract for LNG supply.

GDF Suez signed a 15-year build, own, operate and transfer contract with Gas Sayago in October 2013, and brought on Marubeni as a 50pc partner in February 2014.

OAS filed for bankruptcy protection on behalf of nine of its subsidiaries in a Sao Paulo court on 31 March, the third Brazilian contractor to go down that route this year. Others are expected to follow.

OAS is among more than two dozen mostly Brazilian contractors that have been implicated in the corruption scheme, which is still under investigation. The contractors have been temporarily banned from new business with Petrobras since December, and have seen local credit terms tightened.

Under the scheme, Petrobras contracts were said to be systematically inflated to divert funds to politicians allied with the government.

Many of the contractors generated substantial revenue from business with Petrobras, which is governed by strict local content rules.

The Uruguayan terminal is likely to serve as a regional hub because of limited demand in Uruguay itself. Neighboring Argentina and Brazil are already major LNG importers. Uruguay could help to satisfy their demand by either reloading vessels or delivering gas along existing pipelines, or even gas-based electricity through interconnection routes.