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Thursday, July 18, 2024

Golar LNG Signs 20-Year FLNG Deal

Maritime Activity Reports, Inc.

July 7, 2024

© NPershaj / Adobe Stock

© NPershaj / Adobe Stock

Golar LNG has entered into definitive agreements with Pan American Energy (PAE) for a 20-year deployment of a floating liquefied natural gas (FLNG) vessel in Argentina.

The FLNG project will monetize Argentine gas, tapping into the vast resources from the Vaca Muerta shale formation in the Neuquina Basin, the world's second-largest shale gas resources. The project is expected to start LNG exports within 2027, establishing Argentina as an LNG exporter.

The agreement includes a gas sales agreement from PAE for the supply of gas; and an FLNG charter agreement with Golar which includes a base tariff and commodity exposure to LNG sales prices.

The project aims to utilize Golar’s FLNG Hilli, with a nameplate capacity of 2.45 million tons per annum (mtpa), providing an equivalent net tariff of US$2.6/mmBtu (based on 90% capacity utilization) with an additional commodity-linked pricing element. Golar has flexibility to consider a swap alternative for another suitable Golar FLNG unit.

As part of the agreements, Golar will hold a 10% stake in Southern Energy S.A., a dedicated joint venture with PAE, responsible for the purchase of domestic natural gas, operations, and sale and marketing of LNG volumes from Argentina.

The initiative is envisaged to be the first phase of a potential multi-vessel project and it is anticipated that other large natural gas producers in Argentina will join.