Golar LNG Ltd has announced that it has entered into a 50/50 joint venture (JV) with investment vehicles affiliated with private equity firm Stonepeak Infrastructure Partners. The JV company, Golar Power Ltd, will offer integrated LNG-based downstream solutions, through the ownership and operation of floating storage and regasification units (FSRUs) and associated terminal and power generation infrastructure.
According to a statement from Golar LNG, Stonepeak is committing US$290 million in new equity to develop Golar Power. The company has the ambition to grow in the FSRU and LNG-fuelled power market.
Stonepeak Senior Managing Director, Luke Taylor, said: "We are excited to partner with the leading player in the LNG downstream market and see compelling opportunities in this market to build and operate long-term LNG and power infrastructure with high quality counterparties. While our initial commitment is US$290 million we hope to invest up to US$500 million in the coming years".
Golar LNG said: "By establishing this downstream entity with a strong financial partner that has extensive experience in the energy business, Golar is able to accelerate the realisation of its downstream ambitions and exploit the unprecedented number of opportunities in the current market".
Golar Power's initial asset base will comprise the FSRU currently being constructed at Samsung shipyard, two modern 160 000 m3 tri-fuel LNG carriers suited for conversion to FSRUs, and the right to invest in up to 25% of the Sergipe Power project.
Golar LNG will also grant Golar Power a one year option to acquire from the company a further two LNG carriers for conversion to FSRUs. Upon closing, Golar Power will immediately commence conversion of the first LNG carrier to a FSRU.
Golar LNG has sold a 50% interest in Golar Power to Stonepeak for US$117 million in cash. Stonepeak will subscribe to US$100 million in preference shares on closing of the deal and commit to US$75 million in additional equity. This, together with an additional US$75 million funding commitment from Golar LNG, in the period before 1Q18, is expected to be sufficient, including debt financing, to fully finance the conversion of the two carriers to FSRUs, take delivery of the 2017 new-build FSRU and complete the financing of its share of the Sergipe Power project.
Edited from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/small-scale-lng/20062016/golar-power-launched-2631/