This story requires a subscription
This includes a single user license.
Golar announced late on Thursday that Southern Energy (SESA) has reached FID for the charter of Golar’s 3.5 mtpa MK II FLNG, as contemplated under the terms of the definitive agreements executed by SESA and Golar earlier this year.
In May, Golar announced the decision and fulfillment of all conditions precedent for the 20-year re-deployment charter of the FLNG Hilli Episeyo to SESA.
In addition, Golar and SESA have signed definitive agreements for a 20-year charter for the MKII FLNG, currently under conversion at CIMC Raffles shipyard in Yantai, China.
Golar said at the time that the MKII FLNG charter remained subject to FID and the same regulatory approvals as granted to the FLNG Hilli project.
The company has a 10 percent stake in SESA, while PAE has 30 percent, YPF 25 percent, Pampa Energia 20 percent, and Harbour Energy 15 percent.
$400 million per year
Golar said in the statement on Tuesday that the key commercial terms for the 20-year charter agreement include net charter hire to Golar of $400 million per year, plus a commodity-linked tariff component of 25 percent of FOB prices in excess of $8/MMBtu.
According to the firm, the FLNG will sail to Argentina following her redelivery, with contract start-up expected during 2028.
The MKII FLNG will be moored in the San Matías Gulf near the FLNG Hilli, which is expected to start its 20-year charter with SESA during 2027.
Combined, the two units have a nameplate capacity of 5.95 mtpa, and the project expects to benefit from significant operational efficiencies and synergies from two FLNGs in the same area, Golar said.
Golar noted that the MKII FLNG project remains subject to regulatory conditions precedent and satisfaction of other customary closing conditions which are progressing according to schedule and expected within 2025.
“Today’s FID marks another milestone for SESA in establishing Argentina as an attractive LNG exporter and building on Golar’s position as the market-leading FLNG service provider. FID solidifies $8 billion of net earnings visibility over 20 years to Golar, with attractive upside potential in the FLNG commodity tariff component and through our shareholding in SESA,” Golar’s CEO Karl Fredrik Staubo said.

Conversion update
Golar LNG’s chief technical officer, Morten Skjong, announced in a separate social media post on Thursday the fabrication start of the midship megablock for the MK II FLNG in Yantai.
When joined with the two ship halves of Fuji LNG, it will make up the FLNG’s 390-meter-long hull, he said.
Earlier this year, Skjong said that Fuji LNG was “cut into an aft and a forward section, which have since been skidded on to land.”
Golar LNG and Skjong announced the arrival of Fuji LNG at Yantai CIMC Raffles in February this year.
The 148,000-cbm Moss-type carrier, Fuji LNG, is the donor vessel for Golar LNG’s third FLNG conversion.
More FLNGs
YPF CEO Horacio Marin said in May that SESA is expected to take FID on Argentina’s second floating LNG production unit by the end of July.
Marin previously said that the first phase of the Argentina LNG project is the SESA project, while YPF is developing the second phase with UK-based LNG giant Shell and the third phase with Italy’s Eni.
Argentina LNG is a large-scale integrated, upstream, and midstream gas development project aimed at developing the resources of the onshore Vaca Muerta field and serving international markets.
It will export in a phased approach up to 30 million tons per year of LNG by 2030.
Marin said this week he believes that in the first quarter of next year, YPF can take the final investment decisions for the phases with Shell and Eni, along with the Golar project led by PAE.
In June, YPF and Eni signed a participation deal that outlines the necessary steps to reach FID for the third phase of YPF’s Argentina LNG export project.
This phase includes the production, treatment, transportation, and liquefaction of gas via floating units, for a total capacity of 12 million tons of LNG per year.
As per the phase with Shell, the two firms signed a project development agreement (PDA) for the second phase of the Argentina LNG export project in December 2024.
The second phase will have a capacity of 10 mtpa and two FLNGs.