Golar LNG's Strategic Charter Agreement Boosts Argentine LNG Exports
Golar LNG Partners with Southern Energy for Long-term Charter
Golar LNG Limited is excited to share a milestone achievement regarding its collaboration with Southern Energy S.A. (SESA). The company has secured a pivotal Final Investment Decision for a 20-year charter of Golar’s 3.5MTPA MK II FLNG. This agreement was solidified under the definitive contracts finalized by both parties in the recent past.
Details of the Charter Agreement
The commercial framework of this charter agreement is substantial. Golar anticipates net charter hire payments amounting to approximately US$ 400 million annually. Additionally, it includes a variable tariff linked to commodity prices, specifically 25% of FOB prices exceeding US$ 8/mmbtu. The MKII FLNG is currently undergoing conversion in China and is set to make its way to Argentina for deployment, with operations expected to commence in 2028. This infrastructure will be strategically positioned in the San Matías Gulf, in proximity to the FLNG Hilli, which is expected to enter a similar 20-year charter with SESA during 2027.
Operational Synergies Expected
The geographical closeness of the two FLNG units provides an opportunity for substantial operational efficiencies. Together, they boast a combined nameplate capacity of 5.95MTPA, presenting an encouraging outlook for improved functionality and reduced operational costs in the region.
SESA's Role in LNG Exports
SESA has been specifically established to facilitate LNG exports from Argentina, marking a significant step forward in the country's export capabilities. The company comprises a consortium of Argentina's prominent gas producers including Pan American Energy, YPF, Pampa Energía, Harbour Energy, and Golar itself. This diverse ownership structure reinforces the commitment to enhance Argentina’s position as a key player in the global LNG market.
Future Prospects and Implications for Golar LNG
Looking ahead, the MKII FLNG project is subject to certain regulatory prerequisites and the fulfillment of customary closing conditions, which are on track to be completed by 2025. This successful decision not only marks a pivotal point for SESA but also strategically enhances Golar’s reputation as a leading FLNG service provider. CEO Karl Fredrik Staubo expressed his enthusiasm, highlighting that achieving this milestone signifies an $8 billion net earnings forecast over the 20-year period for Golar.
Enhancing LNG Export Capabilities
This venture sets the stage for Golar to leverage its innovative floating liquefied natural gas technology and operational expertise, contributing to a more robust LNG export framework for Argentina. With potential for upside growth through commodity-related tariff increases, Golar is poised to benefit significantly from this partnership.
Contact Information for Investors
For further inquiries, Golar encourages investors to reach out directly: +44 207 063 7900. Key contact persons include:
Karl Fredrik Staubo - CEO
Eduardo Maranhão - CFO
Stuart Buchanan - Head of Investor Relations.
Frequently Asked Questions
What is the significance of the charter agreement for Golar LNG?
The charter agreement positions Golar LNG as a leader in the LNG sector by solidifying a long-term revenue stream and bolstering Argentina's LNG export capabilities.
How will the MK II FLNG project impact Argentina’s LNG exports?
This project will enhance Argentina's status as an LNG exporter by increasing capacity and operational efficiencies in the region.
What financial implications does this agreement have for Golar LNG?
Golar expects to secure $8 billion in net earnings over the 20-year duration, along with opportunities for additional revenue through commodity-linked tariffs.
When is the MK II FLNG expected to commence operations?
Operations for the MK II FLNG are anticipated to start in 2028, following its delivery to Argentina.
Who comprises the ownership of Southern Energy S.A.?
SESA is owned by major Argentinian gas producers, including Pan American Energy, YPF, Pampa Energía, Harbour Energy, and Golar.
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