Floating LNG player Golar LNG has entered into definitive agreements with Argentina’s Pan American Energy for a 20-year deployment of Golar’s FLNG Hilli in Argentina.
According to a statement by Golar, the FLNG project will monetize Argentine gas, tapping into the vast resources from the Vaca Muerta shale formation in the Neuquina Basin, the world’s second-largest shale gas resources.
Golar expects the project to start LNG exports within 2027, establishing Argentina as an LNG exporter.
The company said this strategic venture is built on a “robust commercial foundation”, featuring 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 tons per annum (mtpa), providing an equivalent net tariff of $2.6/mmBtu (based on 90 percent capacity utilization) with an additional commodity-linked pricing element, the company said.
Golar has flexibility to consider a swap alternative for another suitable Golar FLNG unit, it said.
As part of the agreements, Golar will hold a 10 percent stake in Southern Energy, a dedicated joint venture with PAE, responsible for the purchase of domestic natural gas, operations, and sale and marketing of LNG volumes from Argentina.
“This initiative is envisaged to be the first phase of a potential multi-vessel project and it is anticipated that other large natural gas producers in Argentina will join,” Golar said.
Argentina’s state-owned oil and gas company YPF and Malaysia’s Petronas are also planning to install floating LNG units as part of their Argentina LNG export project.
Golar said the agreements with PAE remain subject to sign-off of customary conditions.
PAE’s website shows that its shareholders are BC Energy Investments (50 percent) and BP (50 percent). CNOOC and Bridas each own a 50 percent stake in BC Energy Investments.
Hilli and MKII 3.5 mtpa FLNG
In May, the LNG firm led by Tor Olav Trøim said it was working to sign definitive agreements for an up to 20-year FLNG deployment, but Golar did not reveal the location or the name of the client.
The company’s CEO Karl Staubo said during the first quarter earnings call that the development could include more than one FLNG over time.
Staubo said that Golar was working with the client whether Hilli or the MKII 3.5 mtpa FLNG should be the first one.
Golar said its focus is on redeployment of its FLNG Hilli following the end of the FLNG’s current charter in July 2026, and thereafter ordering and securing commercial terms for a contemplated MKII FLNG.
Last year, FLNG Hilli, located offshore Cameroon’s Kribi, offloaded its 100th cargo of liquefied natural gas since it started operations in 2018.
Hilli produced 1.46 million tonnes in 2023.
Golar said in the first quarter presentation that the FLNG has offloaded 112 cargoes up to date and produced more than 7 million tonnes of LNG.
As per the MKII 3.5 mtpa FLNG project, Golar exercised its option last year to acquire the 148,000-cbm Moss-type carrier, Fuji LNG, which it aims to convert to a floating LNG producer.
Golar said in the results report the MKII FLNG project development continues, with previously ordered long lead items now 58 percent complete.
The company took delivery of Fuji LNG on March 4, 2024.
According to Golar, Fuji LNG will trade on a multi-month charter ahead of its expected transfer to a yard for FLNG conversion.
Nigerian project and Gimi
Besides this project, state-run Nigerian National Petroleum Corp and Golar plan to take a final investment decision on a floating LNG project offshore Nigeria’s Niger Delta by the end of this year.
NNPC recently said it has executed a project development agreement (PDA) with Golar for the deployment of an FLNG offshore the Niger Delta.
The Nigerian company said the PDA also outlines the monetization plan that will utilize about 400-500mmscf/d and produce LNG, LPG, and condensate.
Golar’s converted floating LNG producer, Gimi, should also start operations later this year at the site of BP’s Greater Tortue Ahmeyim project offshore Mauritania and Senegal.
BP announced the arrival of the unit at the GTA hub in February.
Golar said in the quarterly report that the FLNG is “ready to commence operations”, while the project’s FPSO has also arrived at the project site.
“Hookup and commissioning of the FPSO are on the critical path to first gas and are expected to complete in the third quarter of 2024,” Golar said.
Commissioning of FLNG Gimi can start thereafter. Golar expects FLNG Gimi’s commissioning period to take about six months, concluding with the commercial operations date (COD).