VZCZCXRO6987
PP RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLU #1271/01 3541924
ZNR UUUUU ZZH
P 201924Z DEC 07
FM AMEMBASSY LUANDA
TO RUEHC/SECSTATE WASHDC PRIORITY 4504
INFO RUEHJO/AMCONSUL JOHANNESBURG PRIORITY 0482
RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 LUANDA 001271 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
FOR AF/S 
JOHANNESBURG FOR FCS 
 
E.O. 12958: N/A 
TAGS: EPET EIND ECON AO
SUBJECT: BECHTEL SIGNS MEGA LNG CONSTRUCTION CONTRACT 
 
LUANDA 00001271  001.2 OF 002 
 
 
¶1.  (SBU)  Summary.  On 10 December 2007, the Angolan LNG 
Consortium and Bechtel Corporation signed multi-billion 
dollar contract to build the Angola Liquified Natural Gas 
(LNG) plant in Soyo.  Bechtel is concerned about possible 
problems in getting Angola visas for the approximately 4,000 
expatriate workers and securing timely customs clearance for 
an expected 11,000 shipments of cargo.  End Summary. 
 
¶2.  (SBU)  On 18 December 2007, Terry Valenzano, Bechtel's 
Country Manager for the Angola Liquified Natural Gas (LNG) 
plant and Ricardo Cardiga, Local Content Manager, informed 
the Ambassador that Bechtel had signed on December 10, 2007, 
an agreement with Angola LNG, giving Bechtel multi-billion 
contract to build the LNG plant at Soyo.  The signing of the 
massive contract was done privately; the development will be 
announced with fanfare after the new year begins.  The 
construction project will be Angola's largest engineering 
project ever. 
 
Building an LNG Plant 
--------------------- 
 
¶3.  (SBU)  Angolan LNG's shareholders made their final 
investment decision on the plant on 10 December.  Angola LNG, 
a consortium led by Chevron, the eventual operator (36.4 
percent ownership), with British Petroleum (13.6 pct ), 
Sonangol (22.8 pct.), Total (13.6 pct) and ENI (13.6 pct.) as 
shareholders, is building the LNG plant mainly to serve the 
U.S. market through a terminal in Pasacagoula, Mississippi. 
(Note:  ENI recently bought its share from Sonangol.  End 
note.)  (Note:  A recent media report said Daewoo would build 
4 LNG carriers for the project, three to carry gas to the 
U.S., one to an unspecified European destination.  End note.) 
 
¶4.  (SBU)  Bechtel is to build the LNG plant in 48 months, 
and gas shipments are scheduled to begin in February 2012. 
The Boskalis Corporation (Netherlands) spent much of 2007 
preparing the site, extending the shoreline and building 
jetties.  Others are at work to upgrade the Soyo port. 
 
¶5.  (SBU)  Bechtel will continue with site and soil 
preparation during 2008; actual plant construction will begin 
only in 2009.  Bechtel has been lining up aggregate (gravel) 
suppliers in Angola, and expects to be able to procure some 
other goods locally.  Bechtel expects to import most of the 
project's cement from China.  Valenzuela was intrigued that 
larger quantities of Angolan cement might come on the market 
if the Palancas Cimentos project at the Port of Lobito goes 
into production in time.  (Note:  Current Angolan cement 
production can meet only a fraction of the local construction 
industry's demand, causing retail cement prices to soar in 
recent months.  End note.) 
 
Angolan Content and Angolan Employees 
-------------------------------- 
 
¶6.  (SBU)  The GRA requires Bechtel to hire a minimum number 
of Angolans, and give preference to residents of Soyo city 
and surrounding Zaire province.  The GRA has given Bechtel 
unusual flexibility to hire expatriates, in the interest of 
keeping the project on schedule.  The GRA is serious about 
hiring locals:  Boskalis had to let go some employees it had 
engaged from Cabinda Province.  Valenzano explained most 
locals would work on the project for only about 18 months. 
They will be semi-skilled and unskilled workers, who should 
have marketable skills when they finish with the Soyo 
project. 
 
Visas and Customs 
----------------- 
 
¶7.  (SBU)  At its peak, a multinational workforce of 
approximately 4,000 will work on the project, mainly from 
Philippines, Thailand, India and China.  Bechtel hopes to use 
labor brokers to courier bundles of passports to the nearest 
Angolan Embassies for needed visas.  About 120 employees will 
come from the United States.  Valenzuela is concerned that 
Angola's Houston Consulate recently reduced its visa service 
from five to one day per week, and now makes applicants wait 
eight days for their passports.  Valenzuela hopes a dedicated 
Angolan Customs office in Soyo will keep the project's 11,000 
shipments moving quickly through the port. 
 
Comment 
------- 
 
¶8.  (SBU)  The Soyo LNG plant is a key strategic addition to 
 
LUANDA 00001271  002.2 OF 002 
 
 
Angola's developing economy.  The plant would capture gas now 
being flared or reinserted into the seabed.  With a signed 
contact in hand, Bechtel now becomes another major American 
private sector player in Angola, bolstering further the huge 
role of U.S. companies in the Angolan economy. 
MOZENA