Eni buys Exmar’s Tango FLNG to deploy it in Congo

Italian energy giant Eni has signed a deal to buy Exmar’s Tango FLNG and plans to deploy the unit in Congo.

The floating LNG producer, delivered in 2017, has a storage capacity of 16,100 cbm and a liquefaction capacity of up to 0.6 million tons per year.

According to a statement by Belgium’s Exmar, the value of the deal is in a range of $572 and $694 million, depending on the actual performance of the Tango FLNG during the first six months on site.

Tango FLNG will be made available to Eni at the closing date of the transaction, which Exmar expects to take place in the second half of August 2022.

Eni plans to deploy the unit in Congo, as part of the activities of the natural gas development project in the Marine XII block.

In addition to the FLNG, Eni and Exmar also agreed a 10-year charter for a floating storage unit (FSU) which would be based on the conversion of an LNG carrier, Exmar said.

Exmar owns the 2002-built steam turbine LNG carrier, Excalibur, in joint venture with Seapeak. This is the only LNG carrier in Exmar’s fleet and has a capacity of 138,034 cbm.

Under the deal with Eni, Exmar will also provide operations and maintenance services for both Tango FLNG and the FSU and engineering services for the project which will be the object of separate contracts.

Exmar has been trying to find work for its small floating LNG producer for a while now.

The firm settled a dispute with Argentina’s YPF in October 2020 under which Exmar received in total about $150 million for the terminated 10-year charter deal.

After that, Exmar demobilized the unit in a sheltered location in Nueva Palmira in Uruguay until it finds a new job for the FLNG.

“We are pleased to work with Eni to help increase their LNG supplies on a fast-track basis. This represents a significant milestone for Exmar in its ambition and proof of our ability to further develop LNG infrastructure solutions,” Exmar’s executive chairman, Nicolas Saverys, said.

Congo project

Eni said in a separate statement the acquisition of this facility allows the “development of a fast-track model capable of seizing the opportunities of the LNG market.”

Furthermore, the high flexibility and mobility characteristics of the Tango FLNG would favor the “development and enhancement of Eni’s equity gas by accelerating production start-up time,” it said.

According to Eni, Tango FLNG would begin its activity in Congo in the second half of 2023, following the completion of mooring and connection works necessary to tie with the Marine XII network and infrastructure.

Eni expects LNG production from Marine XII to begin in 2023, and when fully operational it would provide volumes in excess of 3 million tons per year or over 4.5 billion cubic meters per year, Eni said.

In February, Eni’s CEO Claudio Descalzi told analysts during the firm’s 2021 results conference call that the firm was looking to launch its Congo floating LNG export project next year.

The project will receive associated gas from Eni’s Marine XII block offshore Congo.

After that, Eni signed a deal with US LNG player New Fortress Energy under which the latter would deploy its floating liquefaction technology off the coast of Congo for a period of 20 years.

NFE and Eni Congo signed a heads of agreement for the deployment of NFE’s liquefaction technology and to negotiate a long-term tolling agreement.

Besides Congo, Eni is planning to install a second floating LNG production unit offshore Mozambique as the firm works to ship the first LNG cargo from its Coral Sul FLNG.

In June, the 3.4 mtpa Coral Sul FLNG received its first gas supplies from the Coral South reservoir offshore Mozambique, and Eni is looking to ship the first LNG cargo from the unit later this year.

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