A MAJOR step has been taken towards the development of one of the world's largest gas import terminals on the Milford Haven Waterway.

A £400 million contract for the first phase in the construction of the LNG terminal at South Hook has been awarded to an American company.

CB&I - the Chicago Bridge and Iron Company NV - is one of the world's leading engineering, procurement and construction companies.

It will employ 700 construction workers to build the terminal on the 518-acre former Esso refinery site at Milford Haven, and the company has pledged that as many as possible will be local.

Once the terminal is in operation, increased shipping from the South Hook development and the Dragon LNG project at Waterston could turn the Milford Haven Waterway into the second largest port in the UK, in terms of tonnage of cargo.

The Milford Haven project will be owned and operated by the South Hook LNG Terminal Company, a joint venture company formed by Qatar Petroleum and US energy giant ExxonMobil.

The first phase of the project is valued at between £392 million and £406 million and is expected to start later this year.

LNG for South Hook will be supplied from the Qatar Liquefied Gas Company Limited LNG plant to be built in Qatar. The feed gas will be sourced from Qatar's North Field.

The South Hook terminal will include three full containment 155,000 cubic metre LNG storage tanks, vaporisation, sendout and ship unloading systems, along with the refurbishment of an existing jetty to allow berthing of LNG tankers.