Seatrium, Golar agree to let third FLNG conversion contract lapse

Seatrium, previously known as Sembcorp Marine and renamed as Seatrium following its merger with Keppel Offshore & Marine, revealed this in a statement on Tuesday.

Back in July 2015, a unit of Keppel O&M signed a contract worth about $684 million with a unit of Golar LNG to perform the conversion of the 1977-built LNG carrier, Golar Gandria, into a floating liquefaction facility.

However, Golar LNG sold the 125,000-cbm Moss-type vessel for demolition last year.

Following Golar LNG’s sale of Golar Gandria, Seatrium and Golar LNG have decided to let the third conversion contract lapse on December 16, 2024, Seatrium said on Tuesday.

As at the date of this announcement, Seatrium has not started any physical work on the
vessel.

“The above is not expected to have any material financial impact on the earnings per share and net tangible asset per share of Seatrium for the current financial year,” the company said.

Seatrium said the demand for sustainable gas solutions remains “healthy”, underpinned by the energy transition.

“With a strong 60-year track record and product expertise, Seatrium is well positioned along the gas value chain to support the development of offshore energy assets,” the company said.

Two FLNGs

Seatrium previously delivered two floating liquefaction vessels to Golar LNG.

These are the 2.4 mtpa Hilli, which works offshore Cameroon, and the 2.7 mtpa Gimi, which is serving BP’s Greater Tortue Ahmeyim FLNG project offshore Mauritania and Senegal.

Hilli started operations offshore Cameroon’s Kribi in 2018, while BP is working to launch the Tortue FLNG project.

In February, the 2.7 mtpa FLNG Gimi, which was converted from a 1975-built Moss LNG carrier with a storage capacity of 125,000 cbm, arrived at the GTA hub.

After that, the project’s floating production, storage, and offloading (FPSO) unit also arrived at the GTA project off the coasts of Mauritania and Senegal in May.

Project partner Kosmos Energy recently said it expects the FLNG to start production around the end of the fourth quarter.

In October, the LNG carrier British Sponsor started to introduce gas to the FLNG Gimi.

“FLNG commissioning is now underway and will continue to utilize gas from the accelerated commissioning cargo until the BP FPSO is ready to send gas to the FLNG Gimi. Commissioning activity will then further ramp up,” Golar said in its recent quarterly report.

New contract

In addition to these units,  Golar recently signed an EPC agreement with China’s CIMC Raffles to convert its 148,000-cbm Moss-type carrier, Fuji LNG, into an MKII FLNG with a capacity of 3.5 mtpa.

Golar said the total EPC price is $1.6 billion, but the total budget for the MK II FLNG conversion is $2.2 billion.

The Golar MK II design is an evolution of the MK I design of FLNG Hilli and FLNG Gimi.

Golar expects to take delivery of the MK II FLNG in the fourth quarter of 2027.

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.