Keppel Signs Landmark LNG Deal

Keppel Shipyard Limited (Keppel Shipyard), a subsidiary of Keppel Offshore & Marine Ltd (Keppel O&M), has signed a contract with Golar LNG Limited for the conversion of an existing LNG carrier into a floating Liquefied Natural Gas (LNG) storage and re-gasification unit (FSRU).

The total contract value is approximately Singapore $90 million. When the conversion is completed in the second quarter of 2007, it will be the first of its type in the world. The conversion will be made based on relevant DNV class rules and international standards.

Golar LNG will work in partnership with Keppel Shipyard in the engineering, procurement and construction for the project. The scope of work includes installation of a new forward turret, side-by-side mooring system, LNG loading arms, aft thruster with compartment and a re-gasification plant, and replacement of cargo pumps. There is also the upgrading of the existing steam power electrical and marine systems.

Mr Graeme McDonald, Group Technical Director of Golar LNG Limited said, ”Golar LNG has been developing this ‘Floating Energy Solution’ as part of our strategy to diversify into other parts of the LNG value chain and to offer customers greater flexibility. It is our belief that no other system can compete with this concept in terms of timing or pricing by satisfying early or extra demand for gas.

“We have selected Keppel Shipyard as our partner due mainly to the company’s impressive track record and proven expertise with Moss Rosenberg type LNG vessels.”

Mr Nelson Yeo, Executive Director of Keppel Shipyard, said, “Being entrusted to undertake the world’s first FSRU conversion certainly strengthens our market leadership in offshore and marine conversions, especially in the areas of LNG vessels. We are committed to deliver the facility on time, on budget.“

Keppel Shipyard has a strong track record of repairing 71 vessels of Moss Rosenberg-type LNG vessel. The largest LNG repair yard outside Japan, Keppel has also completed 54 FPSO/ FSO conversion projects to date.

The proposed LNG terminal is a steel mono hull with Moss® LNG tanks arranged in the middle, with the re-gasification plant in the forward section and crew facilities with control room and utility machinery in the aft section. The LNG offloading tankers will be moored in a side-by-side configuration with the FSRU for efficient replenishment of the terminal.

The FSRU will be stationed offshore and, through a subsea pipeline, will be capable of a throughput of 2.75 BSCM per annum at variable gas send out pressures up to 85 bar.

Moss Maritime A.S has prepared the conceptual basis for the FSRU and will carry out the design and engineering for the conversion.

Golar LNG is the largest independent LNG ship owner, and currently owns a fleet of 11 vessels, with two more on order. Golar operates vessels worldwide in well-established relationships with British Gas, Pertamina, Chinese Petroleum Corporation, Petronas, Sonatrach and Shell.

A member of Keppel Corporation Limited, Keppel O&M is a global leader in offshore rigs and ship conversion and repair as well as a specialised shipbuilder. Combining the expertise and experience of its subsidiaries, Keppel FELS, Keppel Shipyard and Keppel Singmarine, the group’s near market, near customer strategy is bolstered by a global network of 17 yards in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Integrating the experience and expertise of its yards worldwide, Keppel O&M aims to be a provider of choice and a partner in solutions for the offshore and marine industry.

The contract is not expected to have any significant impact on the earnings per share of Keppel Corporation for the financial year ending 2006.