On September 17, CIMC Raffles, a subsidiary of CIMC Group, is awarded an EPC order for 1+1 Floating Liquefied Natural Gas (FLNG) vessels by Golar LNG, the world’s leading FLNG operation giant.
FLNG is a floating liquefied natural gas (LNG) processing platform, which can liquefy and store the exploited natural gas directly in the sea, and then transport it to all parts of the world by unloading it to LNG carriers.
Therefore, FLNG is one of the most complex, costly and value-added products in offshore engineering equipment, which is called the “new jewel in the crown” of the shipbuilding and offshore industry.
The FLNG, with an overall length of approximately 390 meters and a beam of 70 meters, is scheduled for delivery in 2027. With an expected annual production capacity of 3.5 million tons of LNG, it will expand Golar’s LNG fleet lineup and enhance its competitiveness in the global energy market.
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, similar to Black & Veatch’s role in the construction of Golar’s existing assets, the FLNG Hilli and FLNG Gimi.
The Golar MK II design is an evolution of the MK I design of FLNG Hilli and FLNG Gimi and is also based on the conversion of an existing LNG carrier to an FLNG. The MK II design allows for a modularization of the construction process as well as further efficiency and operability advances based on learnings from previous experience on constructing and operating our existing FLNG assets. The project will utilize the Golar owned LNG carrier Fuji LNG with a storage capacity of 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$ 0.3 billion to date inclusive of the conversion candidate, engineering and long lead items which are now 63% complete.
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.
The structure of international natural gas supply and demand has changed dramatically in the past two years, and the demand for energy security is increasing in many countries. The adoption of FLNG by oil and gas companies to develop offshore natural gas resources is gradually becoming a trend, and in the next two years is expected to be a key period for the development of the industry.
Golar LNG forecasts that the number of floating LNG units is likely to nearly double over the next five years. By 2030, it is expected that there will be around 18 FLNGs globally, capable of producing more than 60 million tons of LNG per year. There are currently five FLNG units operating globally, producing more than 12 million tons per year.
CIMC stated that this is its first FLNG order, marking a major breakthrough for CIMC in the field of high-end offshore manufacturing.