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Golar LNG Buys Tanker to Convert Into Fourth Floating LNG Unit

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Golar LNG has agreed to buy a 2013-built LNG carrier from Japan’s NYK Line to convert into its fourth floating LNG production unit, the company confirmed on 8 October, giving a concrete hull to a $2.45 billion conversion project it ordered from a Chinese shipyard in August. The vessel, Grace Dahlia, will be rebuilt at the same yard already converting Golar’s third FLNG unit, and the company is pitching the finished vessel as the earliest floating LNG capacity available anywhere in the world for the end of this decade.

A bigger tank than its sister unit

Golar’s deal with NYK Line gives it a carrier with 177,427 cubic metres of LNG storage, about 20% more than FLNG Esperanza, the company’s third floating liquefaction unit currently under construction at the same CIMC Raffles yard in Yantai, China. Both vessels share Golar’s repeat MKII design and the same 3.5 million tonnes per annum (mtpa) liquefaction capacity, but the extra tank volume on the unit being built from Grace Dahlia gives prospective customers more flexibility in scheduling offtake shipments without needing to slow production. Golar signed the underlying engineering, procurement and construction (EPC) contract with CIMC Raffles in mid-August, with Black & Veatch supplying the PRICO liquefaction technology used on the MKII design; the Grace Dahlia purchase fills in the specific hull that contract will convert.

A project Golar had put on hold

The order for a fourth FLNG is a reversal from earlier in the year. Golar said in February it would slow its plans for a fourth and fifth floating LNG unit, citing market conditions at the time. The company changed course after what it described as sufficient progress across several LNG projects suited to the same type of vessel, reserving key long-lead equipment items in May before committing capital to the full build in August. Golar has not named a customer or charter for the unit being converted from Grace Dahlia, saying only that commercial discussions for its employment are at an advanced stage. Delivery from the shipyard is targeted for the end of 2029.

The company has also moved to keep its options open beyond this fourth unit: it signed a letter of intent with Singapore’s Seatrium securing a shipyard slot for a possible fifth floating LNG vessel, of either the MKI or MKII design, without yet committing to build it.

Why a speculative FLNG order makes sense right now

Ordering a floating liquefaction unit before a customer is signed is a bet that global LNG demand will keep outrunning new supply through the end of the decade — and that owning spare, flexible capacity under construction is worth more than waiting for a contract first. Floating units like Golar’s can reach markets that lack the pipeline infrastructure, land availability or political conditions for an onshore liquefaction plant, letting a developer monetise a gas discovery faster than a multi-year onshore project would allow. That logic has driven a wave of new LNG supply commitments elsewhere this year, from Qatar’s North Field expansion to new US financing for Argentina’s nascent LNG export ambitions, all adding capacity against a market where buyers in Asia and Europe have shown little appetite to sign long-term contracts without assurance that supply will actually show up on schedule.

Whether Golar’s bet pays off depends on timing it cannot fully control: a 2029 delivery puts the unit into service well after the current wave of new LNG supply from Qatar, the US Gulf Coast and elsewhere is expected to have already eased the tightness in global markets. Golar is betting that a buyer will value having the earliest available floating capacity enough to sign before that supply wave arrives, rather than waiting to see how prices move once it does.