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Friday, 29 November 2013

Golar in FLNG talks with Keppel

Norway’s Golar LNG and Singapore’s Keppel Shipyard are negotiating an engineering procurement and construction contract for a floating liquefied natural gas vessel.

The pair began the front-end engineering and design on an FLNG conversion last November, and Golar said it was completed at the end of August.

Golar has ambitions to build several FLNG vessels on a speculative basis at Keppel, which would convert three of Golar’s existing vessels into FLNG ships.

Golar said in its latest results the FEED was done on a 2.5 million to 2.8 million tonne per annum vessel.

Senior board advisor Oscar Spieler said the FEED “resulted in a very, very cost-effective solution at relatively short delivery time. The concept what we have said generally is that we don't want to go for the complex project and the complex gas.”

This means Golar is targeting pipeline-quality gas in benign marine settings, and is focusing on markets in the Americas and West Africa “that offer multiple opportunities”.


  1. Keppel Shipyard may land $750m Norway deal
    It's in talks with Golar LNG to convert carrier to production facility

    Lisa Lee


    KEPPEL Corp's wholly owned Keppel Shipyard is in talks with Norway's Golar LNG on a contract - worth an estimated $750 million to possibly more than $1 billion - for a landmark conversion of an LNG carrier into a floating liquified natural gas (FLNG) production facility.

    In its 3Q13 results announcement on Wednesday, Golar said that the group had completed a front-end engineering and design (Feed) study with Keppel in August, and the study had confirmed the conversion of an existing LNG carrier into a Floating, Storage and Liquefaction vessel would take 30 months from financial commitment.

    Golar said that the group was negotiating the conversion and liquefaction contracts with Keppel Shipyard and topside partners with plans to finalise all contracts by year-end. This could mean a delivery in mid-2016.

  2. The study confirmed that the conversion will take approximately 30 months from financial commitment to complete

  3. Hamilton, Bermuda, Feb. 28, 2014 (GLOBE NEWSWIRE)

    Floating Liquefaction ("FLNG")

    Negotiations with Keppel Shipyard Limited and Black & Veatch Corporation have been substantially progressed in regard to an EPC contract for conversion of the Hilli to an FLNG vessel using Black & Veatch's proprietary PRICO(R) technology. The technical specification has been completed and the parties are presently finalising commercial aspects of the agreement. The Board anticipates that on the current timetable, a firm investment decision and conversion contract signing can be expected within the second quarter of 2014. Results of the FEED study underpin the Company's contention that the conversion timetable and all-in capital cost will lead to the Golar FLNG vessel being amongst the fastest to deliver and yield highly competitive, low-cost liquefaction solutions for the global market.

    Golar is actively marketing the FLNG vessels to several projects and companies. The target is to find a strong strategic partner that has an interest in utilizing one or several vessels to produce LNG from a specific defined gas reserve. Golar has made some progress with respect to this. It is the Company's target to enter into a binding agreement with respect to construction of a FLNG vessel within the second quarter of 2014. It is, however, uncertain that a final strategic partnership can be concluded within the same time frame. This mismatch significantly increases the risk of the project but also gives the Company more flexibility in optimising its project returns.

    It is Golar's strategy that the value of its ten modern vessels can be maximised by delivering them tied together with the projected FLNG vessels as an integrated package.

  4. KUALA LUMPUR: AmResearch maintains 'buy' call on Bumi Armada with an unchanged fair value of RM5.15 per share, which implies a FY14F price earnings of 23 times, a 15 per cent premium to oil & gas stocks with market valuations above RM1billion.

    AmResearch said Bumi Armada has reportedly teamed up with Keppel Shipyard and Japan’s IHI to bid for a for a front-end engineering and design contract on a proposed floating liquefied natural gas (FLNG) project off Equatorial Guinea in Central Africa..

    "With a contract potentially worth US$2billion (RM6.6billion), the consortium is bidding against a joint-venture between Texas-based Excelerate and Samsung Heavy Industries for the Block R project operated by London-listed Ophir Energy.

    "If successful, this will be the first such conversion project from an old LNG vessel as the first three FLNG projects approved by Petronas in Malaysia and Shell in Australia have all been new build vessels. A final investment decision is expected to be made on the project by mid-2015, with first LNG exports starting in 2018.

    "The advantage of a conversion option could reduce the FLNG costs by up to US$500million, which could often mean clearing the final investment decision of oil field operators against the backdrop of ever-escalating development costs.

    "Ophir has proposed an FLNG with a capacity of a 2-2.5 million tonne per annum which will be fed with gas from seven subsea wells. The vessel’s minimum capacity is based on about 2.6 trillion cubic feet of gas so far discovered in Block R, and a feedstock of about 400 million cubic feet per day," said AmResearch in its research note.

    According to the group’s CEO Hassan Basma, a converted FLNG with the capacity of 2 million tonne per annum to 2.5 million tpa could cost US$2billion. Bumi Armada is understood to be offering a self-supporting prismatic type B containment system, with Excelerate focused on a membrane process. But the rival bid by Excelerate and Samsung have proposed a more expensive newbuild FLNG vessel.

    AmReserach noted that Bumi Armada is eyeing projects involving floating storage regasification units with average storage capacity of 125,000 cubic metres in Cyprus, Indonesia and Philippines. But the timing of the awards is uncertain at this stage given that the operators are currently negotiating for the sale of gas.

    "Bumi Armada is leading the race to supply Eni with an FPSO which could cost up to US$1.5billion for its East Hub project in Block 15/06 off Angola. Additionally, the group is the leading contender for the Madura BD gas condensate FPSO charter and also one of two short-listed candidates for the FPSO charter to Afren’s Okoro block off Nigeria."

    The stock now trades at an attractive FY14F price earnings of 18 times, which is 10 per cent below its peers’ 20 times, said AmResearch.

    Read more: Buy Bumi Armada, says AmResearch - Latest - New Straits Times


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