GOLAR LNG LIMITED confirmed the final investment decision and the lifting of all the conditions suspensive linked to the relocation of its floating unit of natural gas hilli EPISEYO (FLNG HILLI) to the Argentinian coasts. The ship will be chartered for a period of 20 years by Southern Energy SA (SESA), a joint venture bringing together the main producers of Argentina gas. In parallel, a second agreement was signed for a new generation FLNG unit in the process of conversion to China, the MKII FLNG, whose commissioning is scheduled for 2028, subject to the final approval expected in the year 2025.
An integrated project with high contractual income
The FLNG Hilli contract, with a nominal capacity of 2.45 MTPA, will start in 2027 and provides for an annual net rent of $ 285mn for GOLAR, with a price mechanism linked to the price of gas. The MKII FLNG contract, with a capacity of 3.5 MTPA, will generate $ 400mn per year from 2028. Together, these agreements should bring $ 13.7bn to GOLAR over 20 years, before Adjustments and additional variable income. A 25 % increase in FOB prices (Free On Board) beyond $ 8/MMBTU is planned without ceiling, while a price floor at $ 6/MMBTU limits the drops.
Partnership with major Argentinian gas players
SESA, an entity specially created to export liquefied natural gas (LNG) from Argentina, is owned by Pan American Energy (30 %), YPF (25 %), Pampa Energía (20 %), Harbor Energy (15 %) and Golar (10 %). Each shareholder is committed to providing a proportional share of gases via fixed prices sales contracts, adjusted according to the United States Consumer Price (US-CPI). This participation gives GOLAR an additional direct exposure to income from the sale of gas.
-Strategic location in the province of Río Negro
The two units will be located in the Gulf of San Matías, off the province of Río Negro, near the export infrastructure and gas training in Vaca Muerta, the second largest deposit of shale gas in the world. An unprecedented export authorization over 30 years has been granted by the Argentinian government, as well as preferential status within the framework of the major investment incentive regime (RIGI).
Dedicated infrastructure and operational synergies
The gas intended for the FLNG Hilli will initially come from excess volumes of the network of existing gas pipelines. A new pipeline connecting Vaca Muerta to the Gulf of San Matías is also planned to ensure the long -term supply of the two FLNG units. The geographic proximity of ships aims to optimize operations and generate logistical and technical synergies.
The Company said that the contract provides for duration reduction clauses, allowing SESA to limit commitments to 12 years for the FLNG Hilli and 15 years for the MKII FLNG, for a three -year notice and the payment of compensation.
