• Golar looking at Chinese yards?
• May be more for newbuilds
• More land in SSTEC sold

Waiting for Updates on Golar Gimi

Upstream recently reported that Golar LNG is evaluating alternative shipyards to build future FLNG vessels. Recall that in Jul 2014, Dec 2014 and Jul 2015, Golar LNG had contracted with Keppel to convert its existing vessels, Hilli, Gimi and Gandria into FLNG vessels.

Hilli Episeyo has been delivered and is currently operating off Cameroon for Perenco, while Keppel had confirmed in Apr this year that it was in discussions with Golar on FLNG conversion projects for the BP Tortue field.

This would likely require the use of Gimi, and the notice to proceed is till end this year. Golar had mentioned that other shipyards may offer “more attractive payment terms and long-term financing packages”, and that they “have confidence that a Chinese solution for FLNG is viable”.

While there has been some market worry for Keppel, based on the transcripts by Golar, it appears that the discussion with non-Singaporean yards are based on using Golar’s Mark 2 design, i.e. for newbuilds. Keppel’s work, on the other hand, involves the conversion of vessels.

Second Plot of SSTEC Land Sold in 2H18

On the property side, it was disclosed last week that another plot of land in the Sino-Singapore Tianjin Eco-City (SSTEC) has been successfully bid for. The plot is meant for residential use, with a total site area of 8.77ha. This is the second plot of land sold in 2H18, and was won by Tianjin Yeshine Group at RMB 1.46b. This translates into about RMB 6,700 psm of GFA or RMB 166m/ha.

Comparing the land price based on land area, the transacted land plot has fetched higher values than previous transactions. However, on a GFA basis, the price is lower (refer to table below).

We do note that the pricing for each plot varies according to the characteristics such as location and access to amenities, amongst other factors. Meanwhile, we update our SOTP-based fair value and also account for the group’s latest sale of its direct stake in KDC REIT. As such, our fair value estimate slips from S$8.70 to S$8.38.

Source: OCBC Research - 10 Sept 2018