Golar Mulls Third FLNG deal

 

Golar has started discussions with partners Keppel and Black & Veatch aimed at exercising an option, under an existing framework agreement, for the ordering of a third GoFLNG unit similar to the Hilli and the Gimi.

 

The vessel will replace the previously announced floating liquefaction storage and offloading (FLSO) that would have been supplied by Houston-based Excelerate Energy.

 

The Heads of Terms has been approved by Ophir's Equatorial Guinea, Block-R upstream partner GEPetrol, and will shortly be formally ratified. The agreement will be structured as a 20-year tolling contract, commencing commercial operations in the first half of 2019.

 

According to Golar LNG the specific objective of these discussions will be to mature the option to deliver a third unit for start-up in 2018.   This would be between the target on-stream dates of 2017 and 2019 for the first two units destined respectively for Cameroon and Equatorial Guinea.

 

Golar LNG believes that Block R's high purity 2P gas resources, situated in an area of benign sea states, are ideally suited for the application of its GoFLNG technology. 

 

Golar with its partners Keppel Shipyard and Black and Veatch committed to the Gimi FLNG conversion in December 2014. At full production, the vessel will have a contracted capacity of 2.2 million tpy of LNG, to be marketed by Ophir and GEPetrol. The project is expected to deliver an EBITDA for Golar in the first full year of operation in the region of US$350 million.

 

The integrated Ophir/GEPetrol/Golar LNG project is expected to take FID during the first half of 2016 following completion of the upstream FEED study.  

 

Golar LNG's CEO, Gary Smith, said: "Golar is delighted to have secured a contract for our second GoFLNG vessel. This commitment with Ophir and GEPetrol to employ a GoFLNG vessel in Equatorial Guinea represents a further step in the implementation of Golar's strategy to become the industry's leading integrated midstream LNG services provider, supporting resource owners, gas producers and gas consumers. Our new approach to developing LNG projects is stimulating significant interest today. Accordingly, Golar has now, based on its framework agreement with Keppel Shipyard, commenced negotiations for the company's third GoFLNG vessel".

 

Nick Cooper, Ophir's CEO, said: "Finalizing our midstream partner is a significant step forward for the Fortuna FLNG project. This agreement accelerates first gas date and reduces costs along the value chain. The project has been refined to allow the option to deliver LNG at attractive returns into both Pacific Basin and Atlantic Basin LNG customers […] At a time when many other greenfield LNG projects are decelerating, Ophir has elected to accelerate the Fortuna FLNG Project to secure what it believes will be a better market opportunity at first gas and to lock in anticipated reduced upstream development costs. We will now move immediately into the upstream and midstream FEED with a view to reaching FID by mid-2016.”