Golar Seals Deal for Third GoFLNG

London-based liquefied natural gas shipping company Golar LNG Limited has executed agreements for conversion of the 126,000 m3 LNG carrier Gandria to a Golar floating liquefaction facility (GoFLNG) with Singapore’s Keppel Shipyard Limited (Keppel).

The Gandria conversion contract marks the exercise of the second of two options that formed part of the initial 2014 Hilli conversion contract and is worth approximately USD 684 million.

Keppel Shipyard will provide the design, detailed engineering and procurement of the marine systems and all of the conversion-related construction services.

Black & Veatch will provide its licensed PRICO® technology, perform detailed engineering and process design, specify and procure topside equipment, and provide commissioning support for the GoFLNG topsides and liquefaction process.

Golar said that the decision to go ahead with the third conversion project was taken following a thorough review of the growing portfolio of business development opportunities for GoFLNG, which has shown potential demand from several possible customers for delivery of floating liquefaction facilities as early as 2018.

“In order to respond to this potential, the Gandria conversion will now be dedicated to satisfy the commitments to Ophir in Equatorial Guinea, covered by the agreement announced in May this year, requiring delivery of GoFLNG facilities in 2019,” Golar added.

Michael Chia, Managing Director (Marine & Technology), Keppel O&M, said, “GoFLNG facilities are set to reduce the cost and time required to monetise and deliver offshore gas to market. Now a year underway, the Hilli conversion project is progressing to plan. This third GoFLNG contract re-validates our delivery timeframes and price levels, further demonstrating the technical and commercial competitiveness, and lower implementation risks inherent in our solution.”

Golar Gimi before conversion
Golar Gimi before conversion

In parallel with this decision to commit Gandria to the Ophir project, Keppel and Black & Veatch will now update their FEED study, accommodating the deep water operation in Equatorial Guinea on the basis of Gandria.

This move will release the Gimi to cover the potential emerging demand for a 2018 GoFLNG project.

The GoFLNG Gandria conversion contract is expected to become effective by September 21st.

To achieve effectiveness, Golar will make an initial payment to Keppel and Black & Veatch and will have until December 2016 to issue a full notice to proceed with the conversion. The GoFLNG is expected to be delivered in approximately 31 months after receipt of such notice to proceed.

The yesterday’s announced financing for the Hilli project and the flexible terms in the yard contracts for the Gimi and Gandria projects mean that Golar does not expect to raise any additional equity in connection with the ordering of the GoFLNG Gandria.

Currently Golar is working with a schedule which includes delivery of GoFLNG Hilli in Q1 2017, GoFLNG Gimi around mid-year 2018, and GoFLNG Gandria H1-2019. This schedule assumes that the Perenco contract is fully executed before September 30, 2015 and that the Ophir contract is executed prior to June 30, 2016.

In addition to signing the third contract, Golar, Keppel and Black & Veatch have agreed to work out structures for further GoFLNG facilities.