Golar LNG enters into an agreement to supply a FLNG unit to BP for phase 1 of the Greater Tortue/Ahmeyim Project, West Africa
Wednesday 27 February 2019
Golar LNG Limited ("Golar" or "the Company") (NASDAQ: GLNG) announces
today that Gimi MS Corporation ("Gimi MS"), a newly incorporated
subsidiary of the Company, has entered into a 20-year Lease and Operate
Agreement ("LOA") with BP for the charter of an FLNG unit, Gimi, to
service the Greater Tortue Ahmeyim project.
Expected to commence
production in 2022, the FLNG Unit Gimi will liquefy gas as part of the
first phase of the Greater Tortue Ahmeyim project and be located at an
innovative nearshore hub located on the Mauritania and Senegal maritime
border. FLNG Gimi is designed to produce an average of approximately 2.5
million tonnes of LNG per annum, using the Black & Veatch "Prico"
liquefaction process, with the total gas resources in the field
estimated to be around 15 trillion cubic feet.
Concurrent with
its entry into the LOA, Gimi MS has entered into a Subscription
Agreement (subject to 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 FLNG Gimi. Gimi MS will
construct, own and operate FLNG Gimi and 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 commence soon.
Construction
of FLNG Gimi is expected to cost approximately $1.3 billion, excluding
financing costs. Once accepted under the contract, annual earnings
before interest, tax, depreciation and amortization of approximately
$215 million with potential upside for over performance are expected.
Golar is also in the final stages of receiving an underwritten credit
commitment for a $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 4-year construction period the anticipated
maximum total equity contribution from the Company in respect of its
70% stake will be approximately $300 million.
Commenting on
the LOA, Golar CEO Iain Ross 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 ongoing 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".