Maritime LNG infrastructure company Golar LNG has reached final investment decision on the 20-year redeployment charter of the floating liquefied natural gas (FLNG) platform Hilli Episeyo, in Argentina.
The vessel, which will have a nameplate capacity of 2.45 million tonnes per annum (mtpa) of LNG, will be chartered offshore to Southern Energy (SESA) – a company formed to enable LNG exports from Argentina – with the contract startup expected in 2027.
Golar and SESA have also signed definitive agreements for a 20-year charter for the MKII FLNG, currently under conversion at CIMC Raffles shipyard in Yantai, China.
The MKII FLNG charter remains subject to a final investment being reached and the same regulatory approvals as granted to the FLNG Hilli project, expected this year, for launch in 2028. It will have capacity of 3.5 mtpa.
The two FLNG agreements are expected to add $13.7bn in earnings backlog to Golar over 20 years, before adjustments (based on US consumer prices) to the charter hire and commodity linked tariff upside.
The vessels will monetise gas from the Vaca Muerta formation, which is the world’s second largest shale gas resource, located onshore in the province of Neuquen, Argentina.
FLNG Hilli will initially utilise spare volumes from the existing pipeline network. SESA intends to facilitate a dedicated pipeline to be constructed from Vaca Muerta to the Gulf of San Matias to serve gas supply to the FLNG vessels.
Fredrik Staubo, Golar’s CEO, said he looked forward to partnering with the leading gas producers in Argentina in establishing the country as an LNG exporter.
“The vast resources of the Vaca Muerta formation will provide the LNG market with a reliable long-term source of attractive LNG supplies, and a significant contribution to Argentina,” he said.
“For Golar, the project adds robust earnings backlog, attractive commodity upside potential in the FLNG tariff and strong partner alignment through our shareholding in SESA.”
