Golar LNG Limited announced today that it has executed agreement for conversion of the 126,000 m3 LNG carrier Gandria to a Golar floating liquefaction facility (“GoFLNG”).
As with the GoFLNG Hilli and Gimi conversions, the primary contract for the GoFLNG Gandria was entered into 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. 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.
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. This 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. 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.
In the current low oil and gas price environment the use of the GoFLNG concept to develop stranded and associated gas on a fast-track basis has gained momentum as a solution with potential to provide early and robust returns for resource developers and host governments. The GoFLNG business model with a fixed tariff structure reduces the project execution and capex risks for the resource holder and provides a flexible alternative when compared to development of more conventional long lead-time, capital intensive, land-based LNG facilities.
The recently 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 acceptable structures for further GoFLNG facilities which make it possible to capitalize on the experience gained to date, preserve the current industry first mover position and continue to develop a powerful growth strategy.
Source and Image Credit: Golar LNG
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