Golar LNG Ltd. has entered into an engineering, procurement, and construction (EPC) contract with CIMC Raffles for the development of a new MK II Floating Liquefied Natural Gas (FLNG) vessel. The vessel is designed to have an annual liquefaction capacity of 3.5 million tons per annum (MTPA). Black & Veatch will contribute its PRICO technology for the project, which involves detailed engineering, process design, and the procurement of topside equipment, as well as commissioning support.
PRICO, a technology developed by Black & Veatch, is a patented method for liquefying natural gas. It is based on a single mixed refrigerant process and has been in use worldwide for over five decades. The Golar MK II design is an improved version of the MK I design, which was used for the FLNG Hilli and FLNG Gimi. The new design is based on converting an existing LNG carrier into an FLNG, allowing for a more modular construction process and increased efficiency.
The project will use the Fuji LNG carrier owned by Golar, which has a storage capacity of 5.244 million cubic feet (148,500 cubic meters). The total cost for the EPC contract is $1.6 billion, while the overall budget for the FLNG conversion, including the vessel, yard supervision, spares, crew, training, and other related costs, is $2.2 billion. The vessel is expected to be completed by the fourth quarter of 2027. To date, Golar has already invested $300 million in the project, which includes the conversion candidate, engineering, and long-lead items, with 63% of these items now complete.
The yard selection for the FLNG conversion was finalized two years prior. Since then, CIMC, Black & Veatch, and Golar have dedicated approximately 350,000 man-hours to optimizing the conversion process and reducing project risks. As part of the EPC agreement, Golar has also secured an option for a second MK II FLNG conversion at CIMC, with a potential delivery date within 2028.
Golar anticipates that the MK II FLNG, with a delivery date set for 2027, will be the earliest available floating liquefaction capacity on a global scale. The company estimates that, based on potential charter terms similar to recent long-term FLNG charter agreements, the MK II FLNG could generate approximately $500 million in adjusted annual earnings before interest, taxes, depreciation, amortization, and commodity exposure.
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