Italy’s Snam buys FSRU from Golar LNG for $350 million

Italian energy firm Snam has purchased Golar LNG’s 2015-built FSRU Golar Tundra for $350 million, as Italy looks to reduce reliance on Russian gas and strengthen energy security.

Under the deal, Snam will buy 100 percent of the share capital of Golar LNG NB 13 Corporation, whose sole asset is Golar Tundra.

Tor Olav Troim-led Golar LNG said in a statement on Wednesday its board of directors had approved the transaction on May 30.

The move comes just two weeks after the two firms announced a deal for the conversion of Golar Arctic into an FSRU with storage capacity for up to 140,000 cubic meters. This converted FSRU will serve Snam’s project in the port area of Portovesme, Sardinia.

Snam CEO Stefano Venier said the company had completed the transaction “quickly and effectively in a highly competitive market due to the scarcity of supply.”

He said the company is continuing its efforts to acquire a second FSRU of a similar size, for which “exclusive negotiations are currently under way.” The CEO expects Snam to finalize these talks by end of June.

“The role of the new FSRU for the benefit of our country will be essential: alone it will contribute to about 6.5 percent of domestic needs thus bringing the country’s regasification capacity to over 25 percent of the demand,” Venier said.

Italy currently has three large LNG import terminals. These include Snam’s Panigaglia onshore LNG terminal, FSRU Toscana, and the offshore gravity-based Rovigo LNG terminal.

The country also hosts small-scale facilities such as the terminal in the port of Ravenna and the Higas terminal located on the Italian island of Sardinia.

FSRU operations to start during spring 2023

Golar Tundra can operate both as an LNG carrier and as an FSRU, and it has a continuous regasification capacity of 5 billion cubic meters per year.

In order to maximize its regasification capacity, the vessel would be located in central-northern Italy, close to the areas with greatest gas consumption, according to the statement.

Golar expects the vessel to start operations as an FSRU during the spring of 2023, subject to completion of authorization, regulatory processes and the construction of the necessary infrastructure connecting the terminal to the existing gas transport network.

Prior to that and as part of the transaction, Golar said it would lease the vessel from Snam as an LNG carrier for a “limited period of time after closing”, and assist the Italian firm in the preparatory work for the installation of the vessel in the selected port.

Golar added that the completion of the transaction occurred simultaneously with the signing of the contracts, while Snam would finance the deal out of its own resources.

In the coming months Snam would begin activities to contract LNG regasification capacity, which would gradually become available from start-up of Golar Tundra as an FSRU, the statement said.

Golar’s FLNG focus

Golar, that is now focusing on its FLNG business, recently said it was in talks to charter its sole FSRU to European firms, as developments in Europe have created an “urgent need” for more floating LNG terminals.

The company’s CEO Karl Fredrik Staubo welcomed the new deal for Golar Tundra with Europe’s largest natural gas infrastructure owner.

“Today’s announced sale marks the second transaction between Golar and Snam for two independent FSRU projects in Italy in a short period of time,” he said.

“With the sale of Golar Tundra, Golar reinforce its focus on FLNG, enabling efficient production of proven gas reserves allowing customers to further diversify gas supply,” Staubo said.

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