optimising liquid assets Golar LNG

oPTImISING LIQuID ASSETS

Golar LNG is the leading independent owner and operator of LNG carriers and is at the forefront of the world’s Liquefied Natural Gas shipping industry. Today the company provides liquefaction, transport and storage for premier global energy companies such as Shell, Petrobas, Fortress Energy and Pertomina, as well as for many leading LNG trading houses. Philip Yorke reports.

Golar LNG was founded in 2001 when it was acquired from its predecessor, Osprey Maritime. Today the company is a global leader in the acquisition, ownership, operation and chartering of LNG carriers and FSRUs (floating storage and regasification units) through its many international subsidiaries. Golar’s business was originally founded in 1946 as Gotaas-Laarsen Shipping Corporation. This company entered the LNG shipping business in 1970 when it ordered the LNG carrier ‘Hilli’, which is still an integral part of the Golar LNG fleet today.

Powerful growth strategy

In keeping with its ambitious plans for the future, Golar LNG Limited has entered into new agreements for the conversion of the 126,000m3 LNG carrier Gandria to a floating liquefaction facility. In keeping with the FLNG Hilli and Gimi conversions, the primary contract was entered into with Singapore’s Keppel Shipyard Ltd. As with previous projects, Black and Veatch Ltd will provide its licensed PRICO® technology, perform detailed engineering and process design, in addition to specifying and procuring topside equipment and commissioning support.

The decision to proceed with the company’s third major vessel conversion project was taken following a thorough review of the growing portfolio of business development opportunities for Go-FLNG. This has shown potential demand from several global customers for the delivery of floating liquefaction facilities in the near future.

In the current low oil and gas price environment the use of the Go-FLNG concept to develop stranded and associated gas on a fast-track basis has gained momentum. This offers a cost-effective

solution with the potential to provide early and robust returns for resource developers and host governments alike. The business model with its fixed tariff structure reduces project execution and capex risks for the resource holder and also provides a flexible alternative when compared to the development of more conventional, long lead time, capital-intensive, land-based LNG facilities.

The company’s strategy focuses on the development of low capital cost, rapid deployment of floating facilities and utilising the conversion of high quality existing LNG carriers. Introducing new floating LNG technologies for the liquefaction of pipeline quality gas, or associated gas, requires minimal processing. This strategy compliments Golar’s industry leadership position in floating LNG regasification facilities development.

In addition to signing the third contract, Golar, together with Keppel & Veatch, has agreed to work out acceptable structures for further Go-FLNG facilities which make it possible to capitalise on the experience gained to date, preserve the current industry ‘first mover’ position and continue to develop a powerful growth strategy.

Cameroon’s increasing potential

Golar LNG said its Floating Liquid Natural Gas facility, Hilli Episeyo, which is located offshore Kribi in Cameroon, is now close to exporting its sixth cargo with the company sizing up new opportunities based on the existing concept. Golar LNG said in its latest quarterly report that following the signing of acceptance, “all four trains have been commissioned and tested to at or above nameplate capacity and the vessel has been operating with 100 per cent commercial availability.”

The company added that it has also signed a preliminary deal with BP for a vessel similar to the Hilli Episeyo for the BP operated Greater Tortue/Ahmeyim project, located offshore from Mauritania and Senegal.

Golar LNG said draft commercial, construction and financing agreements as well as FEED work are being progressed at a rapid pace in order to meet the required timetable for a potential final investment decision. BP confirmed that it intends to take a final decision on the project shortly and that production is targeted to

commence before the end of 2021. In addition, a number of high potential opportunities are being pursued with Hilli Episeyo’s proof of concept, thus adding momentum to the decision-making process.

Competitive advantage

For some time now, LNG prices have been at a significant discount compared to oil prices and Golar Power has identified a range of potential LNG Importers who would benefit from a rapid switch to gas. The first converted vessel is expected to be available within 12 months. There are only three unfixed FSRU newbuilds presently under construction and scheduled for delivery within the next 30 months.

The conversion model allows Golar Power to cost-effectively address projects with bespoke requirements at a price that remains competitive with the all-in delivered cost of a new-build equivalent. As the only company to have successfully converted LNG carriers to FSRUs, Golar expects that this strategy will once again position it to aggressively exploit its competitive advantage. n