FLEX Inks EPCIC Contract with SHI for Floating Liquification Unit

FLEX LNG has signed an EPCIC contract with SHI for the world's first floating liquefaction unit. The EPCIC contract will provide FLEX LNG with a lump-sum turn-key delivery from SHI with sail-away from the yard in 3Q 2011. The unit will operate offshore Nigeria for Progress LNG.

The floating liquefaction unit will be based on FLEX LNG's LNG Producer (LNGP) concept. The LNGP is a self-contained natural gas processing and liquefaction unit with a nameplate liquefaction capacity of 1.7 million tons LNG per annum and with a storage capacity of 170.000 m3 of LNG and 50.000 m3 of condensate.

Commenting on the signing of the EPCIC contract, FLEX LNG CEO Philip Fjeld stated, "Signing the EPCIC contract with SHI is an historic event not only for FLEX LNG and SHI, but also for the LNG industry as the world's first floating liquefaction unit moves from concept development into a firm turn-key contract. SHI and FLEX LNG have over the past 18 months jointly developed the LNGP design and FLEX LNG is excited to continue what has so far been a very successful partnership.

"The EPCIC contract provides FLEX LNG with an increased visibility on the final cost of the 1.7 mtpa LNGP and we remain confident that our previously communicated guidance of achieving a unit CAPEX of USD 550-700 USD/ton liquefaction capacity still holds true."

FLEX LNG has secured EPCIC option agreements with SHI for its next three LNGP Hulls on order. FLEX LNG and SHI are also in discussions with regards to extending the existing option agreement for LNGP Hulls currently held by FLEX LNG at SHI.