Further to its earlier disclosure on 5 September 2014, Keppel Shipyard Limited (Keppel Shipyard), a wholly-owned subsidiary of Keppel Offshore & Marine Ltd (Keppel O&M), is pleased to announce that it has secured a firm contract from Golar Gimi Corporation (Golar Gimi), a subsidiary of Golar LNG Limited (Golar LNG), to perform the conversion of a second Moss Liquefied Natural Gas (LNG) carrier, the GIMI, into a Floating Liquefaction Vessel (FLNGV). The contract, which has become effective, is worth approximately US$705 million. (CW8888: Note that it is US30 less than Golar Hilli @ US$735)
Mr Michael Chia, Managing Director (Marine & Technology), Keppel O&M, said, "We are happy that Golar LNG is proceeding with their second FLNGV conversion, and would like to thank them for once again entrusting Keppel Shipyard as their lead contractor of choice. This second contract comes just six months after the first contract, and we are encouraged by this positive development. We, together with Golar LNG and our partner Black & Veatch, are confident that FLNGV conversion solutions are indeed the answer to a need to bring small and mid-scale Liquefied Natural Gas (LNG) supplies to market in a more timely and cost-efficient manner."
The conversion award of the GIMI marks the exercise of the first of two options, which were part of an earlier firm contract awarded by Golar to Keppel Shipyard for the conversion of another Moss LNG carrier, the HILLI, into an FLNGV.
The work scope for Keppel Shipyard in converting the GIMI is similar to that for the HILLI. Keppel Shipyard will provide the design, detailed engineering and procurement of the marine systems and all of the conversion-related construction services. Keppel Shipyard will once again engage Black & Veatch, its trusted partner for the conversion of the HILLI, to provide design, procurement and commissioning support services for the topsides, as well as the liquefaction process utilising its established PRICO® technology.
Full construction activities of the GIMI will only commence when Keppel Shipyard receives a notice to proceed, expected to be issued no later than November 2015. In the meantime, orders for long-lead primary equipment such as gas turbines and cold boxes will be placed. The Golar Gimi FLNGV is expected to be delivered around 33 months after receipt of the notice to proceed.
The above is not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation, the parent company of Keppel O&M, for the current financial year.
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Oil headed for the biggest annual decline since the 2008 global financial crisis as U.S. producers and the Organization of Petroleum Exporting Countries ceded no ground in their battle for market share amid a supply glut.
ReplyDeleteFutures slid as much as 2.2 percent in New York, bringing losses for 2014 to 46 percent. U.S. guidelines allowing overseas sales of ultralight oil without government approval may boost the country's export capacity and "throw a monkey wrench" into Saudi Arabia's plan to curb American output, according to Citigroup Inc. U.S. crude inventories are forecast to rise to the highest level for this time of the year in three decades.
Oil's slump has roiled markets from the Russian ruble to the Nigerian naira and squeezed government budgets in producing nations including Venezuela and Ecuador. It's also boosted China's emergency crude reserves and helped shrink fuel subsidies in India and Indonesia. OPEC has signaled it won't cut supply to influence prices, instead preferring to defend market share amid an unprecedented U.S. shale boom.
"The main reason for oil's decline is OPEC sitting on the fence," Giovanni Staunovo, an analyst at UBS AG in Zurich, said by e-mail. "To prevent an excessive inventory build-up, non-OPEC supply growth, particularly U.S. tight oil, needs to decelerate or stall temporarily."
West Texas Intermediate for February delivery dropped as much as $1.19 to $52.93 a barrel in electronic trading on the New York Mercantile Exchange and was at $53.21 at 11:46 a.m. London time. The contract climbed 51 cents to $54.12 yesterday, gaining for the first time in four days. Total volume was about 40 percent below the 100-day average for the time of day.
ReplyDeleteU.S. Condensate
Brent for February settlement fell as much as $1.97, or 3.4 percent, to $55.93 a barrel on the London-based ICE Futures Europe exchange. That's the lowest price since May 2009. Prices have decreased 49 percent this year. The European benchmark crude traded at a premium of $3.03 to WTI, compared with $12.38 at the end of last year.
ReplyDeleteU.S. crude for February delivery settled 85 cents lower, at $53.27 per barrel, the lowest since May 2009. The contract posted a 46 percent annual loss, making 2014 its worst year since 2008.
Brent was last down 40 cents at $57, after dropping as low as $55.81, the weakest price since May, 2009.
U.S. commercial crude inventories declined more than expected last week, falling by 1.8 million barrels, according to data from the U.S. government's Energy Information Administration.
A Reuters poll forecast U.S. crude inventories would show a drop of 900,000 barrels in the week ending Dec. 26, after a rise to their highest recorded level for December in the previous week.
Brent crude was heading for its biggest annual decline since 2008, pressured by weakening demand and a supply glut prompted by the U.S. shale boom and OPEC's refusal to cut output.
Global benchmark Brent crude has fallen 49 percent in 2014 as demand growth slowed, the United States expanded output and OPEC, dropping its strategy of trimming supply to keep oil around $100 a barrel, chose instead to defend market share.
On Wednesday, prices came under pressure from a survey showing China's factory sector shrank for the first time in seven months in December—a bearish indication on the strength of oil demand in the world's second-largest consumer.
"Clearly, demand concerns are one of the issues for the oil market," said Michael McCarthy, chief market strategist at CMC Markets.