Golar LNG Ltd. has signed an engineering, procurement, and construction (EPC) agreement with CIMC Raffles for a 3.5-million tonne/year (tpy) MK II Floating LNG Production (FLNG) vessel. Under the agreement, 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 FLNG topsides and liquefaction process, similar to Black & Veatch’s role in the construction of Golar’s existing assets, the 2.45-million tpy FLNG Hilli and 2.7-millon tpy FLNG Gimi. Hilli and Gimi are stationed off Cameroon and the Mauritania-Senegal maritime border, respectively.
The Golar MK II design is an evolution of the MK I design used for Hilli and FLNG Gimi, allowing for modularization of the construction process. The project will convert the Golar-owned 148,500-cu m LNG carrier Fuji LNG. Both Hilli and Gimi were also conversions.
Total EPC price is $1.6 billion. The total budget for the MK II FLNG conversion is $2.2 billion, inclusive of the conversion vessel, yard supervision, spares, crew, training, contingencies, initial bunker supply and voyage related costs to deliver the FLNG to its operational site, excluding financing costs. The MK II FLNG is expected to be delivered fourth-quarter 2027.
Out of the total conversion price, Golar has already spent $300 million to date inclusive of the conversion candidate, engineering and long lead items which are now 63% complete.
Yard selection for the MK II FLNG conversion was concluded 2 years ago. CIMC, Black & Veatch and Golar have subsequently spent about 350,000 man-hours optimizing the conversion process and de-risking project execution. As part of the EPC agreement Golar has also secured an option for a second MK II FLNG conversion slot at CIMC for delivery in 2028.
The 2027 delivery makes the MK II FLNG the earliest available floating liquefaction capacity globally, according to Golar. Based on potential charter terms in line with the most recent long-term FLNG charter agreements, the MK II FLNG has earnings potential of roughly $500 million of adjusted annual EBITDA, before commodity exposure.
Golar CEO, Karl Fredrik Staubo commented: “The ordering of the MK II FLNG strengthens Golar’s position as the market leading owner of FLNGs, increasing our controlled liquefaction capacity by about 70% to 8.6 million tpy With a delivered price of around $600/ton of liquefaction capacity and an attractive fourth-quarter 2027 delivery, we believe today’s FLNG order is well positioned to offer prospective clients an attractive time-to-market to enable gas monetization, whilst driving value for Golar.”
