GoFLNG Strategy Milestone for Golar LNG
Golar LNG has now passed a very significant milestone in the roll out of its GoFLNG strategy, says a statement from the company.
The recent full and final investment decision (FID) of the Cameroon GoFLNG Hilli project fully validates both the technical and commercial aspects of the Company’s FLNG business model.
Furthermore, achievement of this FID in the current distressed Oil and Gas market is the clearest possible demonstration of a very robust new business proposition.
The good progress toward FID being made with Ophir, now greatly enhanced by the potential participation of Schlumberger in the project, is adding to the GoFLNG momentum.
The LNG carrier spot market remains a significant concern for the Company. Whilst the Cool Pool is increasing access to the spot market and improving operational efficiency, we continue to incur losses.
The depressed level of activity in the shipping market is expected to continue throughout 1Q 2016. This can also be expected to result in weak operating results for 1Q, says the comapny.
Increasing production volumes do however give reason to expect improvement from 2Q onwards. The Board will consider lowering its rate expectations to facilitate the conclusion of long term charters, the objective being to free up capital from shipping activities to be redeployed in the higher return FLNG business.
The development of the Sergipe power project on the contractual and cost side is positive and the potential to create significant shareholder value out of this long term project is most encouraging.
The recent charter of Golar Arctic is likely to open new markets and be a model for fast track downstream LNG developments. The company believes the access to small scale markets, achieved in Jamaica where Golar has supported NFE, to be an exciting new addition to the portfolio of business opportunities under development.
The market for FSRU’s is increasingly attractive but sensitive to additional capacity being introduced by new participants. By combining FSRU activities with power generation Golar believes it will be able to deliver a more integrated product to customers and secure a competitive advantage.
This is analogous to the relationship being developed with Schlumberger on the upstream side of the business. Such business models will likely reduce the time and complexity of integrated LNG fuelled power projects. Through these ventures Golar will effectively position itself as one of the few companies that can develop an integrated product from “Well to Wire.”
