Golar LNG Ltd said on Tuesday that it received a force majeure notice from a BP Plc unit seeking to delay taking delivery of a floating liquefied natural gas facility by a year.
The notice is the latest force majeure claim issued in the LNG sector that is struggling with a seasonal plunge in demand as well as the spread of the coronavirus outbreak, which has further hammered the consumption of the super-chilled fuel globally.
BP is expecting a one-year delay due to the pandemic and currently sees no possibility in reducing the duration of the new timing, according to a statement from Golar's unit Gimi MS Corp.
The oil major was expected to take delivery of the facility in 2022 and charter it for 20 years to liquefy gas from its Greater Tortue Ahmeyim project on the maritime border between Mauritania and Senegal.
Golar said it was in talks with BP to establish the duration of the delay and the extent to which this has been caused by the coronavirus outbreak.
The plant is designed to produce an average of about 2.5 million tonnes of LNG per annum. The construction of the floating facility was expected to cost about $1.3 billion, excluding financing costs.
Golar also said it was talking to its main building contractor, Keppel Shipyard Ltd, to re-schedule activities to reduce its capital spending commitments for 2020 and 2021.
Companies invoke force majeure when they cannot meet their contractual obligations because of circumstances beyond their control.
(Reporting by Arathy S Nair in Bengaluru; Editing by Anil D'Silva)