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McDermott Signs Memorandum of Understanding with Darwin Clean Fuels

- McDermott to be exclusive contractor for condensate refinery upon final investment decision

- Clean Fuels Condensate Refinery could deliver a cleaner fuel with condensate producing 75 percent lower CO² emissions than crude

- Demonstrates McDermott's technology-led EPC capabilities

HOUSTON, Oct. 30, 2019 /PRNewswire/ -- McDermott International, Inc. (MDR) today announced the signing of a Memorandum of Understanding (MOU) with Darwin Clean Fuels Pty Ltd. The MOU is for the feasibility study, technology, front-end engineering design (FEED) and engineering procurement and construction (EPC) for a Clean Fuels Condensate Processing Plant in Darwin, in the Northern Territory, Australia.

"The refinery would leverage our proprietary technologies, including alkylation and sulfur recovery, and is evidence of McDermott's technology-led EPC capabilities," said Ian Prescott, Senior Vice President of Asia Pacific. "Our engineering feasibility studies often serve as the essential underpinning of client decisions about moving forward with major investments."

Condensate is a cleaner fuel; it is a light petroleum liquid that condenses from natural gas, requiring less processing to create quality transport fuels. Australia is a major producer of condensate which is forecast to export 260,000 barrels per1 day by 2020 growing to 305,000 bpd by 2030. Darwin Clean Fuels plans to design, build and operate the condensate plant which has 75 percent lower CO² emissions than crude oil refineries. Australia consumes some 1,000,000 barrels a day of transport fuels and currently imports 600,000 barrels per day to meet its transport fuel needs.

"Darwin Clean Fuels looks forward to the next phase of the project with McDermott to move it toward a final investment decision," said Tony Debenham, Darwin Clean Fuels, Managing Director. "The Clean Fuels Condensate Refinery is a great, long-term investment in Australia, creating jobs and contributing to the economy by reducing the reliance on fuel imports. It also creates an opportunity to maximize both the output and use of this great resource by refining condensate onshore in Australia rather than exporting it overseas for processing it into petrochemicals or refinery blendstock, helping to address the long-term fuel security issues that Australia faces."

As part of the initial contract, McDermott will undertake the feasibility study and FEED through to final investment decision. Upon final investment decision, McDermott will be the lead EPC contractor for the refinery. Early phase engineering work will commence immediately and be completed by quarter one in 2020.

About Darwin Clean Fuels
Darwin Clean Fuels Pty Ltd (DCF) is seeking to develop, construct and operate a 60,000 / 100,000 barrels per day (bpd) condensate processing facility to be located in Darwin, Northern Territory, Australia. This will be the first petroleum refinery of significant size to be built in Australia for over 45 years and the first in Australasia to be utilizing entirely condensate as its feedstock. DCF aims to take advantage of the, low sulphur, and high-quality condensate feedstock for processing into transport fuels that meet the stringent Australian clean fuel standards introduced in 2008/09 but will also meet Euro 6 standards which are mandated for 2027. In strategic alliance with BP, DCF will replace imports of fuel to the Northern Territory and imports of petrol to the Australian east coast markets. Australia has become a net importer of refined fuels, shifting from being a net exporter, through a combination of demand growth and shrinking refining capacity with further refinery plant closures forecast. Refining industry capital expenditure in Australia in recent years has been applied to meet the new clean fuel standards rather than increase refining capacity.

About McDermott
McDermott is a premier, fully integrated provider of technology, engineering and construction solutions to the energy industry. For more than a century, customers have trusted McDermott to design and build end-to-end infrastructure and technology solutions to transport and transform oil and gas into the products the world needs today. Our proprietary technologies, integrated expertise and comprehensive solutions deliver certainty, innovation and added value to energy projects around the world. Customers rely on McDermott to deliver certainty to the most complex projects, from concept to commissioning. It is called the "One McDermott Way." Operating in over 54 countries, McDermott's locally focused and globally-integrated resources include approximately 32,000 employees, a diversified fleet of specialty marine construction vessels and fabrication facilities around the world. To learn more, visit www.mcdermott.com.

Forward-Looking Statements
In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, McDermott cautions that statements in this press release which are forward-looking, and provide other than historical information, involve risks, contingencies and uncertainties that may impact McDermott's actual results of operations. These forward-looking statements include, among other things, statements about the expected scope, timing and benefits of the Memorandum of Understanding discussed in this press release. Although we believe that the expectations reflected in those forward-looking statements are reasonable, we can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying assumptions and are subject to numerous risks, contingencies and uncertainties, including, among others: adverse changes in the markets in which we operate or credit markets, our inability to successfully execute on contracts in backlog, changes in project design or schedules, the availability of qualified personnel, changes in the terms, scope or timing of contracts, contract cancellations, change orders and other modifications and actions by our customers and other business counterparties, changes in industry norms and adverse outcomes in legal or other dispute resolution proceedings. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected. For a more complete discussion of these and other risk factors, please see McDermott's annual and quarterly filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2018 and subsequent quarterly reports on Form 10-Q. This press release reflects management's views as of the date hereof. Except to the extent required by applicable law, McDermott undertakes no obligation to update or revise any forward-looking statement.

Contacts:

Investor Relations
Scott Lamb
Vice President, Investor Relations
+1 832 513 1068
Scott.Lamb@McDermott.com

Global Media Relations
Gentry Brann
Senior Vice President, Communications, Marketing and Administration
+1 281 870 5269
Gentry.Brann@McDermott.com

Asia Pacific Media Relations
Miki O'Farrell
Manager, Marketing APAC
+6012 305 3609
mofarrell@McDermott.com

1 FGE Condensate Annual 2019

new McDermott logo (PRNewsfoto/McDermott International, Inc.)

 

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