Golar LNG's Major Milestone with MK II FLNG Decision

Golar LNG Limited Moves Forward with MK II FLNG Project

Golar LNG Limited, a prominent player in maritime LNG infrastructure, has recently made significant strides by signing an Engineering, Procurement, and Construction (EPC) agreement for its MK II Floating LNG Production (FLNG) vessel. This vessel is designed for an annual liquefaction capacity of 3.5 million tons of LNG. The agreement with CIMC Raffles marks a transformative moment for Golar as they expand their operational capacity in the floating liquefied natural gas market.

Details of the MK II FLNG Agreement

The EPC agreement will see Black & Veatch contribute their unique PRICO technology, ensuring top-notch engineering and process design for the MK II FLNG project. Their involvement is pivotal as they will also specify and procure the necessary topside equipment while providing commissioning support to enhance the liquefaction process. This collaborative effort mirrors the role they played in constructing Golar's previous assets, including the successful FLNG units Hilli and Gimi, both of which have set high performance standards.

The Evolution of Floating LNG Designs

The innovative MK II design is a significant upgrade from the earlier MK I versions utilized in the Hilli and Gimi. This new design will feature a modularized construction process, which boasts improved efficiency and adaptability, built on the lessons learned from the first generation of FLNG vessels. One of the key vessels designated for this project is the Golar-owned LNG carrier Fuji, which has an impressive storage capacity of 148,500 m³.

The budget allocated for the MK II conversion stands at approximately US$ 2.2 billion, including all associated expenses such as yard supervision, training, and initial logistics needed to operationalize the unit. Remarkably, Golar has already invested around US$ 0.3 billion to date, with conversion preparations more than halfway completed at 63%.

Rising Demand for Liquefaction Capacity

With a planned delivery in 2027, the MK II FLNG is poised to be the earliest floating liquefaction capacity available globally. The anticipated earnings potential from this asset could reach upwards of US$ 0.5 billion in adjusted annual EBITDA, providing Golar with an exciting opportunity to capitalize on the growing demand in the LNG market.

Golar's CEO, Karl Fredrik Staubo, expressed optimism, highlighting that the MK II FLNG represents a monumental milestone for the company and its partners. The expansion of Golar's liquefaction capacity by 70% to reach a total of 8.6 MTPA positions the company as a dominant force in the market, ready to cater to burgeoning demand for natural gas and support the transition towards cleaner energies.

The Role of CIMC Raffles and Black & Veatch

CIMC Raffles, a key player in this agreement, has demonstrated its capability in handling substantial and complex offshore projects. The partnership reinforces CIMC's commitment to developing high-quality, innovative solutions that meet stringent industry standards. Furthermore, Golar has secured an additional option with CIMC for a second MK II conversion, slated for delivery in 2028, signaling a broader vision for future growth.

Expertise and Commitment from Partners

Black & Veatch’s involvement in the project is another testament to their expertise in executing floating LNG projects, having supported Golar in previous ventures. Their president for the Fuels and Natural Resources sector emphasized the importance of reliable energy solutions during the global energy transition, which the MK II project aims to provide.

Golar LNG, a listed company on NASDAQ, has consistently delivered innovative marine infrastructure throughout its rich history, establishing itself as a leader in the FLNG market. Their focus on operational excellence and modernization is crucial as they pivot toward sustainable energy solutions in a rapidly evolving market.

Frequently Asked Questions

What is the MK II FLNG's annual liquefaction capacity?

The MK II Floating LNG Production vessel has an annual liquefaction capacity of 3.5 million tons of LNG.

Who are the partners involved in the MK II FLNG project?

The key partners involved are Golar LNG, CIMC Raffles, and Black & Veatch.

What is the expected budget for the MK II FLNG conversion?

The total budget for the MK II FLNG conversion is estimated at US$ 2.2 billion.

When is the MK II FLNG expected to be operational?

The MK II FLNG is expected to be delivered in the fourth quarter of 2027.

How will the MK II FLNG enhance Golar's market position?

The MK II FLNG will increase Golar’s controlled liquefaction capacity by approximately 70% to 8.6 MTPA.

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