Eni, Exmar in arbitration over Tango FLNG performance bonus

Exmar confirmed in its half-year report that the two firms failed to agree on the performance bonus, and Eni has “referred this matter to the London Court of International Arbitration.”

Back in 2022, Exmar sold the FLNG to Italy’s Eni for deployment in the Republic of Congo, also known as Congo-Brazzaville.

Besides buying Tango FLNG from Exmar, Eni also chartered the 2002-built Excalibur from Exmar to serve as a floating storage unit.

Exmar said at the time that the value of the deal was in the range of $572 to $694 million, depending on the actual performance of the Tango FLNG during the first six months on site.

Delivered in 2017, the FLNG has a storage capacity of 16,100 cbm and a liquefaction capacity of up to 0.6 million tons per year.

In February last year, Eni shipped the first LNG cargo from the FLNG moored in Congolese waters.

Following provisional acceptance in February 2024, the Tango FLNG facility loaded and exported 1,250,000 cbm of LNG by mid-2025, demonstrating “strong” operational performance, Exmar said in its results report.

“Based on these results, Exmar is eligible for a performance bonus under the sale and purchase agreement,” Exmar said.

The company announced earlier this year that the agreement for the sale and purchase of Tango FLNG contains a price adjustment clause related to the performance of the unit.

This includes “a negative correction of $78 million and a bonus of a maximum of $44 million,” Exmar said.

In a response, Eni said at the time that it “does not agree with Exmar’s statement regarding its alleged accrued entitlement to a positive price adjustment under the relevant contract.”

Eni said the “conditions for such adjustment are yet to be assessed pursuant to such contract.”