Golar LNG has placed $300 million worth of orders for long-lead items destined for use in a new floating liquefied natural gas vessel that it hopes to deliver in 2025.
The New York-listed player has been on the hunt for a contract to supply a third FLNG vessel for some years, building on the success of its Hilli Episeyo unit working for Perenco in Cameroon and its contract to deliver a vessel for BP’s Greater Tortue Ahmeyim (GTA) project that straddles the maritime boundary between Senegal and Mauritania.
The long lead equipment is targeted to be incorporated into what Golar calls its Mark II FLNG design with capacity of 3.5 million tonne per annum.
However, the compressors, gas turbines, cold boxes and heat-recovery system generators can also be used in other FLNG designs.
“Ordering of these long-lead items… puts Golar in a position to deliver a [third] FLNG during 2025,” the company said in its third-quarter results statement earlier this week.
Golar said it is working with an unnamed “supermajor” on a potential FLNG project, eyeing a delivery date in 2025, and is also in talks with “an independent E&P company”.
“We believe that securing attractive delivery of our next FLNG unit will increase Golar’s ability to drive value with prospective FLNG clients,” the company said.
Growing appetite for FLNG expansion
“Golar continues to experience strong customer engagement for new FLNG projects. This includes working with an upstream company for a potential integrated FLNG project, and paid development agreements,” it added.
“Under the development agreements, both parties commit to deliver a defined scope of work within set deadlines to progress potential new FLNG opportunities and agree on key steps to reach final investment decisions.”
Europe’s rush to build energy infrastructure and replace about 115 million tonnes per annum of LNG equivalent of Russian piped gas appears to have breathed new life into an FLNG industry that saw some fits and starts in the past.
The company’s FLNG fleet currently includes the Golar Gandria tanker that was originally targeted for conversion to a liquefaction unit for deployment in Equatorial Guinea before that project collapsed.
Secured FLNG deals
Production on the Hilli Episeyo unit off West Africa has been running at 1.4 million tpa this year, with a contract expiry date of the second half of 2026.
“It is unlikely that we will reach the total production capacity of Hilli at the current location due to gas flow and the total size of the reservoir we currently produce from,” the company’s chief executive Karl Fredrik Staubo told Upstream in a recent interview.
For BP’s GTA scheme, the Gimi conversion project is 90% technically complete, Golar said in its quarterly report, with sailaway from Singapore targeted for the first half of 2023.
The Gimi FLNG is scheduled to begin operations for BP in the last quarter of 2023 under a 20-year charter that is forecast to unlock about $3 billion of earnings backlog for Golar, equivalent to $151 million in annual adjusted earnings before interest, tax, depreciation and amortisation.
The shipowner reported an adjusted Ebitda of $85.2 million for the third quarter of 2022, up from $52.3 million in the same period last year.