Golar LNG Limited (Golar) announced Tuesday that, further to the announcement on Dec. 24, 2014 regarding the signing of a Heads of Agreement with Societe Nationale de Hydrocarbures (SNH) and Perenco Cameroon (Perenco) for the development of a floating liquefied natural gas (FLNG) export project in Cameroon, agreement has now been reached with the support of the Boards of both Golar and Perenco on the material commercial terms and conditions for the project. The Tolling Agreement which defines the material commercial terms and conditions for the project is now subject to finalization with SNH and government approval. Similarly, the Midstream Gas Convention setting out the regulatory and fiscal regime governing the FLNG operations in Cameroon is being progressed in parallel with the Tolling Agreement and is also now subject to finalization with the government. It is anticipated that final approval by all parties (including the government in Cameroon) for the Tolling Agreement and the Midstream Gas Convention will take place late 3Q 2015.
Golar, Perenco and SNH have for the past two years been developing a floating liquefied natural gas export project located near shore off the coast of Cameroon situated in an area of benign sea states and utilizing Golar's floating liquefaction technology (GoFLNG). The project is based on the allocation of 500 billion cubic feet (Bcf) of natural gas reserves from offshore Kribi fields, which will be exported to global markets via the GoFLNG facility Hilli, now under construction at the Keppel Shipyard in Singapore. Golar will provide the liquefaction facilities and services under a tolling agreement to SNH and Perenco as parties of the upstream joint venture. It is anticipated that the allocated reserves will be produced at a rate of 1.2 million tons of LNG per annum, representing approximately 50 percent of the vessel's nameplate production capacity, over an approximate eight year period. It is expected that production will commence in 2Q 2017.
The project in Cameroon is expected to deliver an earnings before interest, taxes, depreciation and amortization (EBITDA) for Golar in the first full year of operation, based on the utilization of 2 of the available 4 liquefaction trains, in the range of $170 million to $300 million, with a flexible tolling structure which correlates to Brent crude oil prices ranging from a floor of $60 a barrel to a cap of $102 a barrel. The marketing of LNG from the project remains the responsibility of Perenco and SNH.
Golar's CEO Gary Smith commented "Golar is delighted to have achieved this very significant milestone in what will be our first GoFLNG project. This project in Cameroon is breaking new ground both technically and commercially for the LNG industry and would not have been possible without the innovative approach adopted by the teams at Perenco, SNH and Golar. This commitment with Perenco represents a further step in the implementation of Golar's strategy to become the industry's leading integrated midstream LNG services provider, supporting resource owners, gas producers and gas consumers."
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