Golar Enters Into Agreements for Third Floating Liquefaction Facility
July 21 2015 - 5:00PM
Golar LNG Limited ("Golar" or "the
Company") announced today that it has executed agreements for
conversion of the 126,000 m3 LNG carrier
Gandria to a Golar floating liquefaction facility ("GoFLNG"). As
with the GoFLNG Hilli and Gimi conversions, the primary contract
for the GoFLNG Gandria was entered into with Singapore's Keppel
Shipyard Limited ("Keppel"). The Gandria conversion contract marks
the exercise of the second of two options that formed part of the
initial 2014 Hilli conversion contract. Black & Veatch
will provide its licensed PRICO® technology,
perform detailed engineering and process design, specify and
procure topside equipment, and provide commissioning support for
the GoFLNG topsides and liquefaction process.
The decision to go ahead with the
third conversion project was taken following a thorough review of
the growing portfolio of business development opportunities for
GoFLNG. This has shown potential demand from several possible
customers for delivery of floating liquefaction facilities as early
as 2018. In order to respond to this potential, the Gandria
conversion will now be dedicated to satisfy the commitments to
Ophir in Equatorial Guinea, covered by the agreement announced in
May this year, requiring delivery of GoFLNG facilities in 2019. In
parallel with this decision to commit Gandria to the Ophir project,
Keppel and Black & Veatch will now update their FEED study,
accommodating the deep water operation in Equatorial Guinea on the
basis of Gandria. This move will release the Gimi to cover
the potential emerging demand for a 2018 GoFLNG project.
Provisions in the Gimi and Gandria contracts provide Golar
the flexibility to adjust project timing and to limit expenditure
to front-end engineering activities and long-lead equipment
cancellation charges should timing and scope of expected or
potential projects change.
In the current low oil and gas
price environment the use of the GoFLNG concept to develop stranded
and associated gas on a fast-track basis has gained momentum as a
solution with potential to provide early and robust returns for
resource developers and host governments. The GoFLNG business model
with a fixed tariff structure reduces the project execution and
capex risks for the resource holder and provides a flexible
alternative when compared to development of more conventional long
lead-time, capital intensive, land-based LNG facilities.
By September 21st, prior
to which certain conditions precedent must be satisfied, the GoFLNG
Gandria conversion contract will become effective. To achieve
effectiveness, Golar will make an initial payment to Keppel and
Black & Veatch and will have until December 2016 to issue a
full notice to proceed with the conversion. As with the Gimi
conversion contract, the Gandria contract provides similar
beneficial cancellation provisions, which if exercised before
December 2016 will allow termination of the contracts after
deduction of a set cancellation fee. Additional contract
flexibility allows for Golar to determine when Black & Veatch
place orders for certain long-lead items. This will enable
Golar to substantially reduce the initial payment due prior to
contract effectiveness relative to the $50 million paid upon making
the Gimi conversion contract effective.
The recently announced financing
for the Hilli project and the flexible terms in the yard contracts
for the Gimi and Gandria projects mean that Golar does not expect
to raise any additional equity in connection with the ordering of
the GoFLNG Gandria. Currently Golar is working with a
schedule which includes delivery of GoFLNG Hilli in Q1 2017, GoFLNG
Gimi around mid-year 2018, and GoFLNG Gandria H1-2019. This
schedule assumes that the Perenco contract is fully executed before
September 30, 2015 and that the Ophir contract is executed prior to
June 30, 2016.
In addition to signing the third
contract, Golar, Keppel and Black & Veatch have agreed to work
out acceptable structures for further GoFLNG facilities which make
it possible to capitalize on the experience gained to date,
preserve the current industry first mover position and continue to
develop a powerful growth strategy.
FORWARD LOOKING
STATEMENTS
This press release contains
certain forward-looking statements concerning future events and
Golar's operations, performance and financial condition.
Forward-looking statements include, without limitation, any
statement that may predict, forecast, indicate or imply future
results, performance or achievements, and may contain the words
"believe", "anticipate", "expect", "estimate", "project", "will
be", "will continue", "will likely result", "plan", "intend" or
words or phrases of similar meanings. These statements involve
known and unknown risks and are based upon a number of assumptions
and estimates that are inherently subject to significant
uncertainties and contingencies, many of which are beyond Golar's
control. Actual results may differ materially from those expressed
or implied by such forward-looking statements.
Hamilton, Bermuda
July 21, 2015
Enquiries:
Golar Management Limited: + 44 207 063 7900
Brian Tienzo
Stuart Buchanan
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Golar LNG via Globenewswire
HUG#1940318
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