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Keppel in second FLNG deal worth US$705 million with Norway's Golar LNG

KEPPEL Corporation's subsidiary, Keppel Shipyard, has secured its second floating liquefaction (FLNG) vessel conversion contract worth approximately US$705 million, from Norway's Golar LNG.

Under this agreement, Keppel will again convert an LNG carrier into an FLNG vessel for Golar, and will similarly engage engineering firm Black & Veatch (B&V) to provide design, procurement and commissioning support services for the topsides of the FLNG, and leverage B&V's technology for the liquefaction process.

Full construction activities for this project are expected to commence by November 2015 and will take about 33 months to complete.

This contract marks the exercise of the first of two options which were awarded to Keppel in July this year, along with the first FLNG vessel conversion contract. The discussion on the third FLNG conversion has not started.

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FLNG refers to a solution for liquefying natural gas offshore. While still in its infancy, this new technology has been gaining traction among large oil companies who are seeking a growth platform.

Similarly, Golar has been tapping FLNG projects to grow its business further upstream.

Michael Chia, Keppel Offshore & Marine's managing director of marine & technology said that FLNG vessel conversion solutions are "the answer to a need to bring small and mid-scale liquefied natural gas supplies to market in a more timely and cost-efficient manner".

Before the announcement of the contract, Keppel's counter closed unchanged at S$8.85 on Wednesday.