Golar LNG Ltd has completed the sale and delivery of the LNG carrier Golar Viking to PT Perusahaan Pelayaran Equinox (Equinox) for US$135 million.
The LNG carrier has been renamed Salju under Indonesian flag and registry.
Under Indonesian Cabotage regulations, LNG cargoes produced and sold within Indonesia must be transported on an Indonesian flagged vessel.
Equinox decided to acquire the Golar Viking and transfer the vessel to Indonesian flag due to an anticipated increase in domestic allocation for Indonesian produced LNG cargoes this year.
LNG trade growth
The growth in the Indonesian domestic trade of LNG is the direct result of the recent introduction of three new LNG terminal, which are supplied from LNG production facilities at Bontang and Tangguh.
The receiving LNG terminals are the FSRU Nusantara Regas Satu, located in West Java; PGN FSRU, located in Lampung; and the Arun Receiving Terminal, located in Aceh Province. The latter terminal is scheduled to commence operations in the first quarter of 2015.
FSRU Nusantara Regas Satu is owned and operated by PT Golar Indonesia, a joint venture company between Golar and Equinox's parent company.
The technical specification of Golar Viking is well suited for the short haul nature of the domestic Indonesian trade. The transfer of ownership and the anticipated future employment of the vessel recognises that long haul sea borne trade will increasingly become dominated by modern, larger and more efficient vessels providing greater economies of scale.
Golar will also provide risk management support to Equinox, thereby indirectly increasing the company's presence in the growing Indonesian domestic LNG trade. Golar will work together with Equinox should the LNG carrier be available for international trade in the future.
Gary Smith, CEO Golar Management, said: "The sale of the vessel in support of Equinox's aim of actively servicing Indonesian domestic LNG shipping demand fits with our strategy of maximising cash flows in the currently challenging shipping environment. Golar's support to Equinox strengthens the ties we have with our long-term partners in the important Indonesian market. The transaction further confirms Golar's strategy of reducing the company's exposure to the LNG shipping market and focusing its investment in the FLNG business."
Equinox views this transaction as a major step in achieving their aim of building on their long involvement in LNG and establishing Equinox as a leading, first class Indonesian LNG ship owner and operator.
Adapted from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/lng-shipping/16022015/golar-lng-sells-golar-viking-258/