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Keppel confirms $735m FLNG conversion for Golar LNG, plus two options

Keppel confirms $735m FLNG conversion for Golar LNG, plus two options
Keppel Shipyard has confirmed a contract worth $735m to convert an existing Moss LNG carrier into a floating liquefaction (FLNG) vessel for Golar Hilli Corporation, subsidiary of Golar LNG.

The contract, which comes with options for another two similar units, follows the completion of a year-long front-end engineering and design study by Keppel Shipyard and Black & Veatch on converting up to three LNG carriers into FLNG vessels for Golar. The options are for deliveries in third quarter of 2017 and the first quarter of 2018

The FLNG vessel will take about 31 months to convert and is expected to be completed in the first quarter of 2017, and the job will be the world’s first-of-its-type conversion of a LNG carrier into a FLNGV.

The confirmation of the conversion contract follows a conditional contract signed between the Singapore-based yard and Golar Hilli last week.

“We see this project as another excellent opportunity to offer innovative solutions to help address the growing midstream needs in bringing small and mid-scale LNG market to meet the rising global demand for energy,” said Michael Chia, managing director (marine & technology), at Keppel Offshore & Marine, parent firm of Keppel Shipyard.

“Mid-sized FLNG vessel solutions such as this one offer a faster and more cost effective liquefaction solution,” Chia added.

Golar LNG said in a statement: "The FLNG vessel conversion contract is a key step towards full implementation of Golar's floating LNG production strategy."

With the conversion set to be delivered in 31 months it added: "This will make it possible for the company to offer a cost effective and reliable LNG production facility to its customers several years ahead of any potential competitors."

“LNG has the potential to deliver greater energy security for generations to come. Innovators like Golar and Keppel are at the forefront of anticipating these changes by developing faster-to-market and mobile FLNG solutions,” said Hoe Wai Cheong, executive vice president and executive director for Black & Veatch.

The global FLNG industry is expected to attract more than $65bn of investments through to 2020, driven by rising costs of onshore LNG terminals, according to a forecast by analyst Douglas-Westwood.

Asia-Pacific, in particular, is anticipated to draw a majority of investments in the FLNG sector with its sizeable line-up of regasification and liquefaction projects.