Keppel receives final approval for Gimi FLNG project

Umar Ali 17 April 2019 (Last Updated April 17th, 2019 16:20)

Offshore and marine group Keppel has received the final notice from shipping company Golar to proceed with full conversion works on its Gimi FLNG vessel.

Keppel receives final approval for Gimi FLNG project
Kyanite Holdings has offered $3bn for a 30.55% stake in Keppel. Credit: Keppel.

Singaporean offshore and marine group Keppel has received the final notice from shipping company Golar to proceed with full conversion works on its Gimi floating liquefied natural gas (FLNG) vessel.

The contract, worth a total of $947m, was signed through Golar subsidiary Gimi MS and builds on a limited notice to proceed given on 17 December 2018.

Keppel’s scope of work in the conversion includes construction services as well as design, detailed engineering and procurement of the marine systems. The company will work with US engineering firm Black & Veatch on the liquefaction process as well as design, procurement and commissioning support services.

The completed FLNG vessel is to be customised for the 20-year Greater Tortue Ahmeyim contract offshore West Africa, with delivery of the vessel expected in the first half of 2022. Golar announced its agreement with BP for the charter of the vessel in February 2019.

Once completed, the Gimi FLNG will be stationed at a nearshore hub on the Mauritiana and Senegal marine border. The vessel is expected to begin production in 2022, and is designed to produce an average of approximately 2.5 million tonnes of LNG per year.

Keppel previously converted the Hilli Episeyo vessel for Golar, which was deployed to work offshore Cameroon in June 2018.

Keppel CEO Chris Ong said: “We are glad to continue this strong partnership with Golar on such a successful FLNG solution. The success of the Hilli Episeyo has provided the industry with strong proof of the attractiveness of Golar and Keppel’s conversion solution.

“This has further strengthened our offerings along the gas value chain. Leveraging our engineering as well as execution expertise and LNG capabilities, we are able to partner customers in developing innovative and fit-for-purpose solutions to meet the needs of the market.”

Golar CEO Iain Ross said: “Golar looks forward to working closely with Keppel on another Mark I FLNG and has a high degree of confidence in Keppel’s ability to safely deliver FLNG Gimi on time and within budget.”

The transaction is not expected to have any material impact on Keppel’s net tangible assets and earnings for 2019.