SINGAPORE - A contract entered into by a Keppel Corp subsidiary to convert a vessel has become effective and is worth US$735 million (S$917 million).

Keppel Shipyard, a wholly-owned subsidiary of Keppel unit Keppel Offshore & Marine (Keppel O&M), will carry out an unprecedented conversion of a Moss LNG carrier into a Floating Liquefaction Vessel (FLNGV) for its client, Golar Hilli Corporation.

The conversion will take about 31 months and is expected to be completed in the first quarter of 2017.

The contract includes options for another two similar units, Keppel said in a statement on Thursday.

"We see this project as another excellent opportunity to offer innovative solutions to help address the growing midstream needs in bringing small and mid-scale LNG to market to meet the rising global demand for energy," said Mr. Michael Chia, managing director of marine & technology for Keppel O&M.

The contract is not expected to have a material impact on the net tangible assets and earnings per share of Keppel Corp for the current financial year.