Brazilian oil company Petrobras has disqualified Golar Power under governance, risk and compliance (GRC) procedures after the liquefied natural gas-to-power company had submitted a potentially winning bid in a tender for the lease of a regasification terminal in the state of Bahia.
The decision could open the way for a re-bid as a competing offer put forward by BP Energy was also suspended on procedural grounds pending challenges to the Golar Power bid.
A third bid by Compass, the gas and energy arm of Brazilian fuels and infrastructure giant Cosan, was withdrawn at the last minute.
Car Wash allegations
Petrobras had already signaled that it would review Golar Power's participation in the tender on GRC grounds after the company’s chief executive, Eduardo Antonello was named in a Brazilian corruption investigation in relation to events occurring in 2011, when he was working for drilling giant Seadrill.
Golar Power is a joint venture between Golar LNG and private equity firm Stonepeak Infrastructure Partners.
The Bahia regasification terminal has capacity to handle 20 million cubic metres per day of gas and is connected to the Brazilian onshore pipeline system. In 2019 the terminal handled an average of 7.6 MMcmd.
The tender will now enter into an appeal phase but failure to arrive at a solution satisfying all compliance procedures could result in a re-tender, Petrobras said in a statement.
IPO on ice
Golar Power was forced to suspend an initial public offering of a renamed new entity, Hygo Energy Transition, last month as a result of the allegations against Antonello.
Antonello has taken leave of absence and his lawyers say he will prove his innocence, describing the allegations as based entirely on plea bargains by confessed criminals, and "not bearing any relation to the facts".
Golar Power, with Hygo, has ambitious expansion plans in Brazil, with one big LNG-to-power project already up and running in the shape of the 1.5 megawatt Sergipe 1, and three others in various stages of planning and pre-development.
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The company also took a first step toward becoming a major distributor of bio-gas on Thursday, with the launch of a procurement programme aimed at small-scale liquefaction by producers in Brazil.
The programme targets an initial figure of 5 MMcmd from farms, sewage treatment plans and landfills.
