Keppel O&M gets final nod to proceed with vessel project worth US$947m

Keppel Shipyard, a subsidiary of Keppel Offshore & Marine.
Keppel Shipyard, a subsidiary of Keppel Offshore & Marine. PHOTO: KEPPEL CORP

SINGAPORE - Keppel Offshore & Marine's (Keppel O&M) subsidiary, Keppel Shipyard, has received final approval to start full conversion works for the Gimi Floating Liquefaction Vessel (FLNG) project, worth some US$947 million (S$1.28 billion).

Gimi MS Corporation, a subsidiary of Golar LNG Ltd, granted the final notice, which builds on a limited notice to proceed issued on Dec 17, 2018.

Delivery of the vessel is expected in the first half of 2022, Keppel Corp said.

"Keppel Shipyard's scope of work in the conversion of a Moss Liquefied Natural Gas (LNG) carrier into an FLNG vessel includes the design, detailed engineering and procurement of the marine systems as well as conversion-related construction services," Keppel Corp noted in a statement on Wednesday (April 17).

It added that the project will be similar to work done on the first converted FLNG vessel, Hilli Episeyo, which Keppel delivered to Golar LNG.

Chris Ong, CEO of Keppel O&M, said: "We are glad to continue this strong partnership with Golar... 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."

Iain Ross, CEO of Golar LNG, added that Golar looks forward to working closely with Keppel on another FLNG project, and has a "high degree of confidence in Keppel's ability to safely deliver FLNG Gimi on time and within budget".

Keppel Shipyard will engage Black & Veatch, which it also partnered for the conversion of the Hilli Episeyo, to provide the design, procurement and commissioning support services for the topsides, as well as the liquefaction process, Keppel Corp said.

When completed, the Gimi FLNG will be stationed at a nearshore hub located on the Mauritania and Senegal maritime border, and is expected to begin production in 2022 as part of the first phase of the Greater Tortue Ahmeyim project.

The Gimi FLNG is designed to produce an average of about 2.5 million tonnes of LNG per year.

The transaction is not expected to have any material impact on the net tangible assets (NTA) and earnings per share (EPS) of Keppel Corp for the current financial year.

Separately, Keppel Corp on Wednesday morning also announced that it has paid about US$30.2 million to complete the subscription of a 30 per cent stake in Gimi MS, which has now become an associated company of Keppel Corp.

This transaction is also not expected to have any material impact on the NTA or the EPS of Keppel Corp for the current financial year, the group noted.

Keppel Corp shares closed flat at $6.61 on Tuesday.