(EnergyAsia, January 5 2014, Monday) — Golar LNG Ltd said it is building Africa’s first floating project off the coast of Cameroon to liquefy natural gas for export to Asia.

It has awarded Singapore’s Keppel Shipyard the contracts to convert two vessels into floating liquefied natural gas (FLNG) terminals, Golar Hilli and Golar Gimi, at a total cost of US$1.44 billion.

The US$705 million contract for the conversion of the 125,000-cubic metre vessel into the Golar Gimi was announced on December 31, while the US$735 million contract for the Golar Hilli was awarded last July.

Bermuda-based Golar said it has signed a heads of agreement (HOA) with Societe Nationale de Hydrocarbures (SNH) and Perenco Cameroon for the development of the FLNG project located 20 km off the coast of the West African nation.

Under a tolling agreement, Golar will provide the liquefaction facilities and services to SNH and Perenco to develop 500 billion cubic feet of natural gas reserves from the offshore Kribi fields for export to global markets, mostly Asia. The FLNG will enable the two companies to produce 1.2 million tonnes/year of LNG over an approximate eight-year period from the first half of 2017.

Simultaneously, Keppel Shipyard, a subsidiary of Keppel Corporation, entered into a sub-contract with global engineering, procurement and construction company Black & Veatch to provide its licensed PRICO® technology, perform detailed engineering and process design, specify and procure topside equipment, and provide commissioning support for the FLNGV topsides and liquefaction process.

Golar said it expects to deliver the Gimi conversion vessel to Keppel’s Singapore shipyard as early as the second quarter of this year, with the FLNG terminal to be completed and delivered within 33 months.

To ensure flexibility of its FLNG strategy, the company said it has secured “certain beneficial provisions” for the project’s cancellation before November 2015 that will allow it to recover “previous milestone payments less a set cancellation fee.”

Golar said the Gimi FLNGV conversion contract represents a further step in the implementation of its GoFLNG technology to become the industry’s leading integrated midstream LNG services provider, supporting resource owners, gas producers and gas consumers.

“This strategy was launched with the conversion of the Hilli to a floating liquefaction facility and further underpinned by the recent heads of agreement for the development of a FLNG export project in Cameroon,” it said.

As one of the world’s largest independent owners and operators of LNG carriers with over 40 years of industry experience, Golar will help Cameroon become an LNG producer and exporter. The project represents the company’s latest strategic move to extend its business model further upstream through the deployment of its floating liquefaction technology (GoFLNG).

Speaking for Keppel Shipyard, Michael Chia, managing director for marine and technology at Keppel O&M, said:

“We are happy that Golar LNG is proceeding with their second FLNGV conversion, and would like to thank them for once again entrusting Keppel Shipyard as their lead contractor of choice. This second contract comes just six months after the first contract, and we are encouraged by this positive development.

“We, together with Golar LNG and our partner Black & Veatch, are confident that FLNGV conversion solutions are indeed the answer to a need to bring small and mid-scale LNG supplies to market in a more timely and cost-efficient manner.”