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Golar LNG enters agreement to supply FLNG unit to BP

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LNG Industry,


Golar LNG Ltd has announced that its newly incorporated subsidiary, Gimi MS Corp., has entered into a 20-year lease and operate agreement (LOA) with BP for the charter of the Gimi floating LNG (FLNG) unit to service the Greater Tortue Ahmeyim project.

Gimi is expected to begin production in 2022. It will liquefy gas as part of the first phase of the Greater Tortue Ahmeyim project and will be located at an innovative nearshore hub located on the Mauritania and Senegal maritime border.

The vessel is designed to produce approximately 2.5 million tpy of LNG on average using the Black & Veatch Prico liquefaction process. Total gas resources in the field are estimated to be around 15 trillion ft3.

Concurrent with its entry into the LOA, Gimi MS has entered into a subscription agreement (subject to certain closing conditions) with First FLNG Holdings Pte. Ltd – an indirect wholly-owned subsidiary of Keppel Capital – in respect of their participation in a 30% share of the FLNG unit. According to the statement, Gimi MS will build, own and operate the FLNG vessel, while First FLNG Holdings Pte. Ltd will subscribe for 30% of the total issued ordinary share capital of Gimi MS for a subscription price equivalent to 30% of the project cost. LNG carrier Gimi has been relocated from layup to Keppel Shipyard in Singapore, where conversion works are expected to begin shortly.

The construction of the FLNG unit is estimated to cost approximately US$1.3 billion, not including financing costs. Once accepted under the contract, Golar claims that annual earnings before interest, tax, depreciation and amortisation of approximately US$215 million with potential upside for over performance are expected. According to the statement, the company is also in the final stages of receiving an underwritten credit commitment for a US$700 million long-term financing facility from a syndicate of international banks that will be available during construction. Golar’s plan is that, together with other financing facilities, by the end of the four-year construction period, the anticipated maximum total equity contribution from the company in respect of its 70% stake will be approximately US$300 million.

Iain Ross, Golar CEO, said: “This landmark 20-year agreement with BP, which is Golar's second FLNG tolling agreement, is the culmination of a lot of hard work and commitment from the project and commercial teams that commenced late 2017. The potential of Golar's floating LNG solution was reinforced by FLNG Hilli Episeyo's proof of concept, heads of terms were agreed with BP and its partners in April 2018 and work has been on going via the previously reported limited notice to proceed. Golar is delighted to have the opportunity to demonstrate the safe and reliable operation, quality and value of its FLNG offering to such a world class energy company as BP and looks forward to safely delivering and building on this long-term relationship over the decades ahead.”

Read the article online at: https://www.lngindustry.com/floating-lng/27022019/golar-lng-enters-agreement-to-supply-flng-unit-to-bp/

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