Golar LNG and Perenco reach FLNG agreement

Golar LNG Ltd has confirmed that it has reached an agreement with the Board of Perenco Cameroon on the material commercial terms and conditions for the development of a floating LNG (FLNG) export project in Cameroon.

In December 2014, Golar signed a Heads of Agreement with Societe Nationale de Hydrocarbures (SNH) and Perenco ("Perenco") for the development of the FLNG project.

The Tolling Agreement, which defines the material commercial terms and conditions for the FLNG project, is now subject to finalisation with SNH and government approval.

In parallel with the Tolling Agreement, the Midstream Gas Convention is setting out the regulatory and fiscal regime governing the FLNG operations in Cameroon. This is also subject to finalisation with the government. It is anticipated that final approval by all parties (including the government in Cameroon) for the Tolling Agreement and the Midstream Gas Convention will take place late 3Q15.

FLNG project

For the past two years, Golar, Perenco and SNH have been developing a FLNG export project located near shore off the coast of Cameroon, utilising Golar's floating liquefaction technology (GoFLNG). The project is based on the allocation of 500 billion ft³ of natural gas reserves from offshore Kribi fields, which will be exported to global markets via the GoFLNG facility Hilli, now under construction at the Keppel Shipyard in Singapore. Golar will provide the liquefaction facilities and services under a tolling agreement to SNH and Perenco as parties of the upstream joint venture.   It is anticipated that the allocated reserves will be produced at a rate of 1.2 million tpy of LNG, representing approximately 50% of the vessel's nameplate production capacity, over an approximate eight year period. It is expected that production will commence in 2Q17.

In the first full year of operation, the FLNG project is expected to deliver an EBITDA for Golar, based on the utilisation of two of the available four liquefaction trains, in the range of US$170 million to US$300 million, with a flexible tolling structure which correlates to Brent crude oil prices ranging from a floor of US$60/bbl to a cap of US$102/bbl. The marketing of LNG from the project remains the responsibility of Perenco and SNH.

Golar's CEO, Gary Smith, said: "Golar is delighted to have achieved this very significant milestone in what will be our first GoFLNG project. This project in Cameroon is breaking new ground both technically and commercially for the LNG industry and would not have been possible without the innovative approach adopted by the teams at Perenco, SNH and Golar.”

Edited from press release by Callum O'Reilly

Read the article online at: https://www.lngindustry.com/floating-lng/01072015/golar-lng-and-perenco-reach-flng-agreement-968/