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Golar reaches FID on Sergipe project and charters newbuild FSRU

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LNG Industry,

Golar Power has announced that it has reached a final investment decision (FID) on the Porto de Sergipe project, located near Aracaju, Sergipe, Brazil.

The decision enables the project company, CELSE, to enter into a lump sum turnkey engineering, procurement and construction (EPC) agreement with General Electric to build, maintain and operate the combined cycle power plant.

The project, which will be the largest thermal power station in South America, will supplement hydropower during dry seasons and help to meet the region’s growing demand for electricity. It is scheduled to deliver power to 26 committed offtakers for 25 years from 2020 in accordance with previously executed PPA contracts, which were awarded by the Brazilian government in 2015.

The power station and terminal, including taxes and financing costs, are expected to require approximately BRL4.3 billion (US$1.3 billion) in CAPEX.

Golar has also announced that, in connection to the Sergipe FID, the company has entered into an agreement to charter the Golar Nanook floating storage regasification unit (FSRU) for 25 years. The vessel is expected to be delivered in November 2017.

Golar Power has also increased its ownership in the Sergipe project from 25% to 50%, with the final price of the shares dependent on the performance of the project.

Golar Power CEO, Eduardo Antonello, said: "We are very enthusiastic with the FID of Porto de Sergipe and fully committed to deliver the plant and terminal in accordance with the original budget and schedule. The project shows very solid economics and provides a strong financial foundation for Golar Power. Through this project, Golar Power is developing a very robust and replicable structure to enable the most comprehensive, cost-efficient and flexible integrated gas-to-power solutions globally. We see a huge market to develop cheaper and cleaner energy solutions."

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