Golar LNG enters into an agreement to supply a FLNG unit to BP for phase 1 of the Greater Tortue / Ahmeyim Project, West Afri...
February 26 2019 - 9:02AM
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".
FORWARD LOOKING STATEMENTS
This press release contains forward-looking
statements (as defined in Section 21E of the Securities Exchange
Act of 1934, as amended) which reflects management's current
expectations, estimates and projections about its operations. All
statements, other than statements of historical facts, that address
activities and events that will, should, could or may occur in the
future are forward-looking statements. Words such as "may,"
"could," "should," "would," "expect," "plan," "anticipate,"
"intend," "forecast," "believe," "estimate," "predict," "propose,"
"potential," "continue," or the negative of these terms and similar
expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
other factors, some of which are beyond our control and are
difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such
forward-looking statements. You should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. Unless legally required, Golar undertakes no
obligation to update publicly any forward-looking statements
whether as a result of new information, future events or
otherwise.
Among the important factors that could cause
actual results to differ materially from those in the
forward-looking statements are:
- our inability and that of our counterparty to meet our
respective obligations under the Lease and Operate agreement
entered into in connection with the BP Greater Tortue / Ahmeyim
Project;
- changes in our relationships with our counterparties, including
our major chartering parties;
- failures of shipyards to comply with delivery schedules or
performance specifications on a timely basis or at all;
- changes in our ability to obtain additional financing on
acceptable terms or at all;
- increases in costs, including, among other things, wages,
insurance, provisions, repairs and maintenance as well as the cost
of constructing the FLNG Gimi;
- changes in general domestic and international political
conditions, particularly where FLNG Gimi will operate;
- a decline or continuing weakness in the global financial
markets; and
- other factors listed from time to time in registration
statements, reports or other materials that we have filed with or
furnished to the Securities and Exchange Commission, or the
Commission, including our most recent annual report on Form
20-F.
As a result, you are cautioned not to rely on
any forward-looking statements. Actual results may differ
materially from those expressed or implied by such forward-looking
statements. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise unless required by
law.
Hamilton, Bermuda
February 26, 2019
Enquiries:
Golar Management Limited: + 44 207 063 7900
Stuart Buchanan
Golar LNG (NASDAQ:GLNG)
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