Golar LNG’s Cameroon floating liquefied natural gas (FLNG) has a start date of 2Q 2017 offshore Africa, after receiving final approval by all parties of the Gas Convention.
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Image from Golar LNG. |
The final investment decision was signed today (30 September) between Cameroon's state owned oil and gas company Société Nationale des Hydrocarbures (SNH), Golar LNG, and French independent Perenco to endorse and govern the installation and operation of the GoFLNG vessel in Cameroon waters offshore of Kribi.
The binding tolling agreement having already been agreed between Golar and Perenco, is expected to be formally approved by the 25% upstream partner SNH imminently. This agreement establishes the terms under which Golar shall provide liquefaction, storage, and off-loading services to SNH and Perenco as upstream joint venture partners, Golar LNG said.
Both agreements will facilitate the financing structure and will enable Golar to drawdown up to US$700 million from the facility to fund the ongoing conversion cost.
For the past two years, Golar, Perenco and SNH have been developing a FLNG export project off the coast of Cameroon, using Golar's floating liquefaction technology, GoFLNG.
According to Golar, the project is based on the allocation of 500 Bcf of natural gas reserves from offshore Kribi fields, which will be exported to global markets via the GoFLNG facility Hilli, now under construction at Keppel Shipyard in Singapore.
Under the terms of the tolling agreement, Golar will provide the liquefaction facilities and services to SNH and Perenco as parties of the upstream joint venture.
Allocated reserves will be produced at an expected rate of 1.2 MTPA of LNG, representing approximately 50% of the vessel's nameplate production capacity, over an approximate eight-year period. Production is expected to commence in 2Q 2017.
Consistent with previous advice, the project in Cameroon is expected to deliver an EBITDA for Golar in the first full year of operation, based on the utilization of two of the available four liquefaction trains, in the range of $170-$300 million, with a flexible tolling structure which correlates to Brent crude oil prices ranging from a floor of $60/bbl to a cap of $102/bbl. The tolling agreement also includes a tariff for a three-train operation in case additional gas volumes can be processed or production advanced. Full production by three trains will increase the EBITDA to between $240 million and $430 million corresponding to the same range of Brent crude oil prices, Golar said.
"We genuinely believe the employment of this first speculatively ordered FLNG unit and the approval for development of the Kribi field sets a new standard for development of gas reserves,” Gary Smith, Golar CEO said. “The Kribi field development was approved within a relative short time frame and delivers solid economics for all parties involved notwithstanding the current low oil and gas price environment. This approval clearly demonstrates the competiveness of the GoFLNG model versus other alternative approaches to LNG project development.”
In July, Keppel Shipyard signed its third contract with Golar LNG worth approximately $684 million for a floating LNG conversion. Keppel will convert Golar’s Moss type LNG carrier, the Gandria, into a GoFLNG facility.
Keppel already has contracts to convert two other carriers, the Gimi and Hilli into GoFLNG facilities.
The Gimi was due to be used on Ophir's Equatorial Guinea project, but, Golar LNG says using the Gandria will release the Gimi to be used on another proposed LNG project, scheduled for start-up in 2018. Golar LNG didn't say what project this would be on.
The Hilli is due to be used on French independent Perenco's floating LNG gas export facility offshore Cameroon.
Read more:
Keppel inks third GoFLNG conversion
Cameroon FLNG reaches milestone
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