Floating LNG player Golar LNG and energy giant BP, the operator of the delayed Greater Tortue Ahmeyim project located offshore Mauritania and Senegal, have resolved a dispute related to daily payments for Golar’s converted FLNG, Gimi.
Back in 2019, the two firms signed a 20-year lease and operate agreement for the FLNG to work on the GTA field.
In November last year, the FLNG, which was converted from a 1975-built Moss LNG carrier with a storage capacity of 125,000 cbm, left Seatrium’s yard in Singapore, and Golar announced in January this year the arrival of the FLNG at the site of BP’s GTA project.
However, the FLNG then proceeded to moor offshore Tenerife while awaiting completion of the necessary preparatory activities. BP said the unit arrived at the GTA hub in February.
BP’s project has been delayed due to the subsea scope and the project’s FPSO arrived at the GTA project in May.
“Commercial reset”
Golar said in a statement on Monday that the two firms have executed agreements to implement a “commercial reset” for Gimi.
“The commercial reset agreement simplifies contractual cash flows and settles previous disputes related to payment mechanisms for pre-commercial operations date (pre-COD) contractual cash flows,” Golar said.
Golar and BP have agreed an updated schedule of daily payments until the commercial operations date.
According to Golar, the daily payments have step-up mechanisms based on project milestones up to COD and are secured by long stop dates.
Golar will also be entitled to certain lump sum bonus payments subject to achievement of certain project milestones, it said.
These pre-COD cash flows are expected to be deferred on the balance sheet and amortized over the 20-year contract term from COD.
“The commercial reset settles all ongoing disputes including the current arbitration process and re-aligns the parties towards reaching COD,” Golar said.
Commissioning of FLNG
“To shorten the time to COD the parties have also agreed to start the commissioning of FLNG Gimi with an LNG cargo prior to the availability of gas from the FPSO,” Golar said.
The firm did not provide further information.
Golar LNG’s FLNG Gimi is expected to receive a pre-commissioning cargo to accelerate the cool down of the unit later this month, GTA project partner Kosmos Energy said on Monday.
The FLNG unit is at the heart of the GTA Phase 1 development, operated by BP with partners, Kosmos, PETROSEN, and SMH.
First LNG is expected in the fourth quarter of 2024.
The project is set to produce around 2.3 million tonnes of LNG per year.
It is expected to produce LNG for more than 20 years, enabling Mauritania and Senegal to become a global LNG hub, BP said.