Golar LNG Ltd. (Golar) has signed an engineering, procurement, and construction (EPC) agreement with CIMC Raffles (CIMC) for an MK II Floating liquefied natural gas (FLNG) production vessel with an annual liquefaction capacity of 3.5 MTPA. Under the agreement with CIMC, Black & Veatch will provide its licensed PRICO technology, perform detailed engineering and process design, specify, and procure topside equipment, and provide commissioning support for the FLNG topsides and liquefaction process.
PRICO is a proprietary and patented technology that Black & Veatch developed to liquefy natural gas. According to the company, the technology was developed through extensive process engineering knowledge and expertise utilizing a single mixed refrigerant process made up of nitrogen, methane, ethane, propane, n-butane, and isopentane. PRICO is now utilized globally and has been installed and in operation for over 50 years.
The Golar MK II design is an evolution of the MK I design of FLNG Hilli and FLNG Gimi. It is based on the conversion of an existing LNG carrier to an FLNG. According to Golar, the MK II design allows for a modularization of the construction process and advancements in efficiency and operability. The project will utilize the Golar owned LNG carrier Fuji LNG with a storage capacity of 5.244 million ft.3 (148,500 m3). The total EPC price is US$1.6 billion. The total budget for the MK II FLNG conversion is US$2.2 billion, inclusive of the conversion vessel, yard supervision, spares, crew, training, contingencies, initial bunker supply, and voyage related costs to deliver the FLNG to its operational site, excluding financing costs. The MK II FLNG is expected to be delivered in Q4 2027. Out of the total conversion price, Golar has already spent US$300 million to date, inclusive of the conversion candidate, engineering, and long lead items which it says are now 63% complete.
Yard selection for the MK II FLNG conversion was concluded two years ago. CIMC, Black & Veatch, and Golar have subsequently spent approximately 350,000 man-hours optimizing the conversion process and de-risking project execution. As part of the EPC agreement, Golar has also secured an option for a second MK II FLNG conversion slot at CIMC for delivery within 2028.
According to Golar, the 2027 delivery makes the MK II FLNG the earliest available floating liquefaction capacity globally. Based on potential charter terms in line with the most recent long term FLNG charter agreements, the MK II FLNG has earnings potential of approximately US$500 million of adjusted annual earnings before interest, taxes, depreciation, amortization, and commodity exposure.
