Golar Taps Keppel to Build First Floating Storage LNG Unit

Golar LNG Limited has signed a contract with Keppel Shipyard Limited of Singapore for the first ever conversion of an existing LNG carrier into a LNG Floating Storage and Regasification Unit. Keppel Shipyard Limited is the leading ship repair yard for Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) carriers outside Japan. Moss Maritime of Norway (a Saipem company) has prepared the conceptual specification for the FSRU and will carry out the design and engineering.

The total contract value is approximately S$90 million.

When the conversion is completed in the second quarter of 2007, it will be the first of its type in the world. The conversion will be made based on relevant DNV class rules and international standards.

Golar LNG will work in partnership with Keppel Shipyard in the engineering, procurement and construction for the project. The scope of work includes installation of new forward turret, side-by-side mooring system, LNG loading arms, aft thruster with compartment, a regasification plant and replacement of cargo pumps. There is also upgrading of the existing steam power electrical and marine systems. The full concept is based on well proven and working technology.

Mr. Graeme McDonald, Group Technical Director of Golar LNG, said, "Golar LNG has been developing this 'Floating Energy Solution' as part of our strategy to diversify into other parts of the LNG value chain. It is our belief that no other system can compete with this concept in terms of timing or pricing when satisfying early or extra demand for gas. Our market survey has discovered several specific opportunities for the FSRU, however no fixed employment contract has been signed. The relative pricing differential between LNG and oil and the increased overall energy demand in developing nations gives us some very interesting opportunities. Calculations completed for potential clients show that the Golar terminal can be available approximately three years ahead of a conventional land based terminal and that the annual savings in overall energy production cost can be more than USD 50 million. Furthermore this commitment by Golar LNG has the dual advantages of locking in a start up date for a project and thus allowing potential end users to make firm preparations and commitments. In the past the lack of such firm commitment has delayed progress in a number of projects.

"We have selected Keppel Shipyard as our partner due mainly to the company's impressive track record and proven experiences with Moss Rosenberg type LNG vessels."

Mr. Nelson Yeo, Executive Director of Keppel Shipyard, said, "Being entrusted to undertake the world's first FSRU conversion certainly strengthens our market leadership in offshore and marine conversions, especially in the areas of LNG vessels. We are committed to deliver the facility on time, on budget."

Keppel Shipyard has a strong track record of repairing 71 vessels of Moss Rosenberg type LNG vessel. The largest LNG repair yard outside Japan, Keppel has also completed 54 FPSO/FSO conversion projects to date. The proposed LNG terminal is a steel mono hull with Moss(R) LNG tanks arranged in the middle, with the regasification plant in the forward section and crew facilities with control room and utility machinery in the aft section.

The LNG offloading tankers will be moored in a side-by-side configuration with the FSRU for efficient replenishment of the terminal.

The FSRU will be stationed offshore and, through a subsea pipeline, will be capable of a throughput of 2.75 BSCM per annum at variable gas send out pressures up to 85 bar.

Golar LNG is the largest independent LNG ship owner, and currently owns a fleet of 11 vessels, with two more on order. Golar operates vessels worldwide in well-established relationships with British Gas, Pertamina, Chinese Petroleum Corporation, Petronas, Sonatrach, and Shell.