Golar LNG Ltd, the operator of conventional carriers, floating import and export terminals and a power affiliate backed by its fleet of 27 ships, reported business progress while posting a first-quarter loss amid increased operating revenues.
Golar reported a net loss of $104.24 million for the first quarter compared with $41.74M of losses in the same three months of 2019.
However, total operating revenues were higher at $122.55M versus 114.28M in the year-ago quarter.
“Golar is pleased to report Q1 operating revenues and adjusted EBITDA of $76.2M, that were driven by a solid performance in FLNG, with 100 percent commercial uptime on ‘Hilli Episeyo’ (Cameroon FLNG exports), and strong seasonal results in Shipping,” said Iain Ross, Chief Executive of Golar LNG.
At the Golar Power affiliate, the 1.5 gigawatts Sergipe power plant in northeast Brazil reached its Commercial Operation Date acceptance which triggered earnings under the 25-year Power Purchase Agreement (PPA) and the associated FSRU “Golar Nanook” charter.
Golar LNG said that the first three small-scale customers have also now been formally signed up and LNG distribution operations are expected to start in 2021.
“This short time to cash flow and the very strong project return confirms the attractiveness of our small-scale business,” said the company.
“To date, a further 200 potential customers have signed letters of intent to pursue various small-scale opportunities with Golar Power, demonstrating the robust consumer appetite to reduce both energy costs and environmental footprints,” it added.
Among other highlights, Golar LNG said the power unit entered into a partnership with Petrobras Distribuidora S.A. to facilitate a nationwide rollout of small-scale LNG supply to Brazil's transportation and industrial sectors.
Golar Power also signed an accord with the Brazilian state government of Pernambuco to develop an LNG import terminal in the Port of Suape.
“We also expect to finalize arrangements for locating a Floating Storage Unit (FSU) at Suape over the course of the year,” said Golar.
The affiliate is additionally working with BR Distribuidora S.A to overlay its geographical coverage of LNG distribution onto BR Distribuidora’s 7,600 Brazilian fuel stations.
“This will optimize the roll-out of the necessary infrastructure to convert current diesel, heavy fuel oil and coal consumers to cleaner and cheaper LNG through the provision of a stable and secure LNG supply,” it said.
The floating LNG production from the “Hilli Episeyo” hull deployed offshore Cameroon in West Africa is heading for its 40th export cargo with 100 percent commercial uptime maintained.
Golar also noted that regarding the “FLNG Gimi” being built for production offshore Mauritania and Senegal in West Africa, the company received a “force majeure” claim from UK major BP in relation to a delay in the order of 12 months to the target connection date.
“We are in advanced and positive discussions with our main building contractor, Keppel Shipyard Limited, and with engineering topsides subcontractor, Black and Veatch, on a revised cost and time schedule for the ‘FLNG Gimi ‘conversion that can be implemented as a contingency in response to the 12-month delay claimed by BP on its Tortue project,” Golar explained.
In the LNG Shipping segment, Golar said it expected second-quarter time charters to be at around $40,000 per day, with utilization of at least 80 percent of the fleet based on fixtures to date and the prevailing spot market.
“The current chartering strategy to de-risk the business by targeting more fixed and floating coverage has been successful and we intend to fix more portfolio term-based deals to further de-risk shipping exposure and to hedge expected volatility,” said Golar LNG.
“Except for the ‘Golar Tundra’, scheduled to dry-dock during June, no other dry-docks are planned this year,” it added.