Golar Power, an affiliate of Golar LNG, has signed an accord with the northeast Brazilian state of Pernambuco to develop an LNG import terminal linked to a power venture, its second such project in the region. Golar will also launch small-scale regional LNG distribution.
The infrastructure for the facility will be constructed at Port of Suape on the Atlantic Coast of the state whose capital city is Recife.
Brazil’s latest LNG import terminal is scheduled to start up in the second half of 2020 in a gas-to-power project with Golar Power’s 50-50 joint venture partner, the US-based investment fund, Stonepeak Infrastructure Partners.
“The project includes infrastructure for the supply of natural gas and LNG to generate electricity, in addition to meeting the demands of industries, commerce, LNG stations and households,” said Golar.
To this end, Golar said it would work in partnership with the local gas distribution company, Companhia Pernambucana de Gás Natural (Copergás) to bring natural gas to regions of the State that are not yet served by traditional pipeline networks.
Golar and Stonepeak have already developed one gas-to-power in another northeast Brazilian state of Sergipe where a Golar floating storage and regasification unit the “Golar Nanook” operates about 8.5 kilometres off the coast.
The FSRU is connected by pipeline to a combined-cycle gas-fired power plant, the largest in Latin America, owned by Centrais Elétricas de Sergipe S.A.
The Pernambuco project at the Port of Suape is expected to use the existing port infrastructure owned by the state government.
Pernambuco has a population of around 9.6 million people and the project is aimed at benefiting the economy of cities in the interior of the state.
“Natural gas will be delivered by road using LNG ISO-containers,” said Golar.
“Suape is already Brazil's largest hub for liquid bulk and gases and, now, it will be one of the main LNG distribution hubs in the Northeast, with full integration of sea and land transportation modes,” added the company,based in Bermuda with Norwegian origins.
The Golar Power terminal intends to use an existing LNG carrier, permanently docked at the port of Suape.
“The vessel will act as a supplier to truck mounted LNG ISO-containers. These vehicles will then distribute LNG to cities within a radius of up to 1,000 kilometres, “ Golar explained.
“Initial trucked volumes are estimated at 800 cubic metres of LNG per day, equivalent to approximately 480,000 cubic metres of natural gas per day,” it added.
“LNG will also be distributed from Suape to other states in Brazil, through cabotage using small-scale LNG carriers that will be supplied by trans-shipment and used to transport LNG to other ports in the region,” stated Golar.
Capital requirements for the project are expected to be funded from Golar Power’s internal resources and operating cash flow.
Golar added that the final development decision on the project remains dependent on regulatory approvals and the conclusion of commercial agreements.