Kvaerner Govan Ltd was formed in 1988 when the Norwegian group Kvaerner Industrier purchased the former Fairfield shipyard in Govan, Glasgow on the River Clyde that had previously been operated by Govan Shipbuilders Ltd. Kvaerner Govan Ltd invested heavily in modernisation of the shipyard to enable it to specialise in the construction of liquefied natural gas and chemical tankers.

Between 1991 and 2000 Kvaerner Govan constructed 19 vessels in the yard including 4 gas tankers and 6 chemical tankers. However, in the later 1990s the market for such vessels was depressed and the yard had to find alternative contracts. This included five small ships for the North Sea offshore industry. The yard also constructed the helicopter carrier for the Royal Navy under sub-contract from Barrow shipbuilders VSEL and the highly sophisticated satellite launch command ship Sea Launch Commander for Sea Launch Inc of Long Beach, California.

In 1999, the Govan yard was taken over by BAE Systems Naval Ships, who also owned the former Yarrow Shipbuilders yard in Scotstoun on the Clyde.