) share price rose by 0.3% on the news that it is preparing to
issue bid documents relating to a multi-billion-dollar floating
liquefied natural gas (FLNG) vessel within weeks. The vessel is
likely to be employed in Area 4 off northern Mozambique.
ENI SPA-ADR (E): Free Stock Analysis Report
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A minimum of four consortia is likely to receive bid documents
this month itself to take part in Eni's debut FLNG development.
It will be the second to be launched in Africa after Ophir
Energy's Block R project in Equatorial Guinea.
The definite set of contenders includes South Korea's three major
yards and a Japanese yard. All these contestants will be linked
to Asian, American and European engineering and construction
companies. Per market sources, another consortium, probably
Chinese, may also participate, but no confirmation has been
The bidding battle will be among Daewoo Shipbuilding & Heavy
Engineering, which has linked up with KBR, Samsung Heavy
Industries, which has teamed up with Technip and JGC, and Hyundai
Heavy Industries with its allies Chiyoda and Saipem.
Sources revealed that the Japanese consortium is being led by
Ishikawajima-Harima Heavy Industries, which has teamed up with
Modec, Toyo Engineering and CB&I. The fifth consortium, as
hinted by some sources, could engage all or some of Wison
Offshore & Marine, Yinson and Offshore Oil Engineering
Another source revealed that Eni's initial bid documents are
likely to call for a front-end engineering and design
competition, which would continue for a year before the operator
invites at least two rival groups to tender price offers.
The winner of this prestigious contract would be well positioned
to receive more work for Eni off Mozambique where the operator
has recognized the need for two more FLNG vessels. Hyundai's
group is considered to be at an advantage because partner Saipem
performed early engineering work on Eni's FLNG concept,
sub-contracting some work to Aker Solutions. This consortium is
also performing pre-front-end engineering and design work for
) difficult Scarborough project, off Australia.
The competition for Hyundai is expected to be severe from Samsung
and Daewoo, which are working on FLNG projects in Australia for
Royal Dutch Shell plc
) and Malaysia for Petronas, respectively.
Eni carries a Zacks Rank #3 (Hold). A stock in the oil and gas
industry looking good with the Zacks Rank #1 (Strong Buy) is
Range Resources Corp.