Golar LNG Limited (GLNG) has completed the sales of Hygo, a 50-50 joint venture between GLNG and Stonepeak Infrastructure Fund II Cayman (G) Ltd, and Golar LNG Partners, LP to New Fortress Energy (NFE).
“The NFE transactions have simplified the group structure and crystalised part of the value of our downstream business,” said GLNG Chairman, Tor Olav Troim. “We are impressed with what the Chairman and CEO, Wes Edens, and his team in NFE have created over the last five years. They have, through dynamic, fast track solutions to the energy transition, outcompeted the traditional energy companies.
“Golar is excited to become a major shareholder in NFE and working even more closely with NFE. NFE’s expanded portfolio of cash generating assets and international project opportunities in the advanced stages of development put them in a strong position to accelerate the realisation of the profitable growth ambitions Golar has for its downstream business.
“Golar has materially strengthened its balance sheet as a result of the NFE transactions. This coincides with rising energy prices, and with a global focus on cleaner energy. Golar is now in a strong position to use its unique FLNG capability and experience to produce low cost LNG and meet this rapidly expanding opportunity. “This can take place through tariff-based production for oil and gas companies, but can also be achieved through direct gas ownership. The cost of buying or farming into proven reserves of stranded or associated gas is currently very attractive,” he concluded.
Under the Hygo agreement, NFE acquired all of the outstanding shares for 31,372,549 shares of NFE Class A common stock and $580 mill in cash. The transaction was costed at a $3.1 bill enterprise value and a $2.18 bill equity value at the announcement.
GLNG received 18,627,45 shares of NFE Class A common stock and $50 mill in cash and Stonepeak received 12,745,098 shares and $530 mill in cash.
In addition, NFE acquired all of the outstanding common units of GMLP for $3.55 per common unit in cash. NFE has also acquired GMLP’s general partner for equivalent consideration.
This transaction valued GMLP at a $1.9 bill enterprise value and a $251 mill common equity value.
Golar received $81 mill in cash for the sale of its 32% interest in GMLP.