LNG News Editor:
Golar LNG Ltd shares surged over the weekend as the company entered a definitive agreements with Pan American Energy (PAE) for a 20-year deployment of one of its floating LNG production units in Argentina to tap the vast resources of the Vaca Muerta Shale.
Golar announced the deal on July 5 and its shares on the Nasdaq global exchange jumped by 7 percent.
Start-up target
The shares rose to $33.80 per share from as low as $31.60 on the previous day.
The vessel chosen for Argentina is the FLNG hull “Hilli Episeyo” deployed offshore Cameroon and whose charter was coming to an end.
The latest Argentine FLNG project is expected to start LNG exports within 2027, again establishing Argentina as an initially small-scale LNG exporter.
“This strategic venture is built on a robust commercial foundation,’” explained Golar.
It is underpinned with a Gas Sales Agreement from PAE for the supply of gas and an FLNG charter agreement with Golar which includes a base tariff and commodity exposure to LNG sales prices.
“The project aims to utilize Golar’s ‘FLNG Hilli’, with a nameplate capacity of 2.45 million tonnes per annum,” stated Golar.
This deal would provide an equivalent net tariff of US$2.6 per million British thermal units based on 90 percent capacity utilization and with an additional commodity-linked pricing element.
“Golar has flexibility to consider a swap alternative for another suitable Golar FLNG unit,” it added.
As part of the agreements, Golar will hold a 10 percent stake in Southern Energy SA, a dedicated joint venture with PAE, responsible for the purchase of domestic natural gas, operations and the sale and marketing of LNG volumes from Argentina.
Golar said that the deal with PAE was envisaged to be the first phase of a potential “multi-vessel project” and it was anticipated that other large natural gas producers in Argentina will join.
