Golar LNG Enters New Frontier with FLNG MKII Agreement
Golar LNG, based in Bermuda, has made significant strides in expanding its liquefied natural gas (LNG) midstream infrastructure through a newly struck agreement with Yantai CIMC Raffles Offshore (CIMC Raffles). This engineering, procurement, and construction (EPC) contract pertains to Golar’s fourth floating LNG (FLNG) unit and marks the second vessel of its innovative MKII design.
The Ambitious Project
The latest FLNG project boasts an impressive annual liquefaction capacity of 3.5 million tons of LNG per annum (mtpa). Golar has set a total budget for the project at around $2.45 billion, which underscores the scale and ambition of this conversion initiative. The firm expects to welcome the completed unit from the shipyard by the end of 2029, marking a notable expansion in its operational capabilities.
This FLNG unit is positioned to become the earliest available FLNG capacity globally, a status Golar attributes to its longstanding relationships with equipment suppliers. The company has undertaken considerable efforts to secure advantageous delivery schedules for long-lead items essential for the project.
Innovation Through Repetition
The new MKII FLNG unit will be a repeat design, echoing the characteristics of the FNLG Esperanza, which is currently under construction at CIMC Raffles. Golar anticipates significant synergies to arise from this repeat design approach, taking advantage of concurrent constructions at the same shipyard. Such efficiencies could be a game-changer in terms of both time and cost.
This agreement also follows Golar’s recent securing of a substantial $600 million senior secured revolving credit facility (RCF), which is likely to support ongoing and future projects, including this pivotal FLNG initiative.
Technical Excellence
With this EPC contract in hand, Golar has engaged Black & Veatch for critical components of the project. The firm will deploy its licensed PRICO liquefaction technology, focusing on the detailed engineering and process design for the FLNG’s top-side operations. Additionally, Black & Veatch will be responsible for the procurement of topside equipment and will offer commissioning support for both the FLNG topsides and liquefaction process.
Strategic Market Positioning
Karl Fredrik Staubo, CEO of Golar LNG, expressed enthusiasm about this development, stating, “We are pleased to announce the ordering of Golar’s 4th FLNG unit.” He highlighted that this FLNG order, combined with Golar’s established operational track record, positions the company to offer prospective clients an attractive gas monetization solution. It’s evident that Golar is setting its sights high in the FLNG market and aims to secure a long-term charter contract for the new unit.
Strengthening Partnerships
Wang Jianzhong, CEO and President of CIMC Raffles, shared his sentiments about the partnership with Golar. He noted, “We are very pleased and honored to be selected by Golar for the second MKII FLNG project.” This statement reflects a mutual confidence and respect between the two companies, emphasizing the strength of their collaboration. CIMC Raffles is committed to delivering this project with efficiency and high quality, reinforcing its reputation for reliable engineering and construction.
Future Prospects in the FLNG Market
This new MKII FLNG unit is expected to significantly bolster Golar’s standing in the FLNG market, increasing its controlled liquefaction capacity by around 40%, pushing it beyond 12 mtpa. The company is eager to engage in advanced commercial discussions for the prospective employment of the unit, signaling its commitment to tapping into lucrative gas monetization opportunities.
By focusing on innovative designs, strategic partnerships, and strong financial backing, Golar LNG is navigating the complex landscape of the LNG industry with a clear vision. The future looks bright for this ambitious project, promising both economic and operational advancements in the sector.