What is FID (Final Investment Decision)?
FID (final investment decision) is the formal, board-level commitment of capital that moves a project from development into execution. In LNG, petrochemical, and power projects, FID is the milestone at which EPC contracts are finalized and long-lead equipment orders are placed. For BD teams, a project that has reached FID is funded and real — the subcontracting clock starts running.
FID separates real projects from announced ones. Developers announce far more capacity than they build; a final investment decision means a board has committed the capital, financing is arranged, and the owner is now spending at full rate. In sectors like LNG, petrochemicals, and utility-scale power, FID is the standard vocabulary for that commitment, and it usually appears in press releases, investor calls, and regulatory filings.
Example: an LNG export project sits in development for years with offtake agreements accumulating one by one. The day FID is declared, the EPC contract — typically negotiated in parallel — becomes effective, long-lead equipment orders go firm, and site mobilization is scheduled. Every subcontract and supply opportunity on that project now has a clock attached.
For contractors, FID is the filter that keeps pipelines honest. Chasing pre-FID projects burns estimating capacity on work that may never exist; ignoring them entirely means arriving after the teams are set. The productive posture is to track pre-FID projects lightly and escalate coverage sharply the moment FID lands.