Golar LNG Energy announced the termination of the various agreements relating to the Gladstone LNG Project as a function of the recent announcement of a conditional takeover proposal of Arrow Energy by Royal Dutch Shell and PetroChina. The agreements terminated are Golar Energy's shipping and marketing agreement HoA with Arrow, the HoA with Toyota Tsusho Corporation in respect of the LNG supply and the original HoA with LNG Limited for the offtake of LNG from the Gladstone LNG Project.
Golar Energy remains of the view that the Gladstone LNG Project site at Fisherman's Landing, the mid-scale nature of the LNG plant and all the work undertaken to date, renders the Gladstone LNG Project with the potential to be developed and commercialized, in a much shorter time frame and at a lower cost per produced ton of LNG than other, much larger, LNG projects proposed by others in the Port of Gladstone.
Arrow has placed finalization of the previously announced purchase of the Gladstone LNG Project from LNG Limited on hold and has signed an extension in the HoA term to June 30, 2010. The non-exclusive nature of this extension means that LNG Limited is in a position to attract interest from other parties in the region with respect to gas supply and the development of the Gladstone LNG Project as an alternative to Arrow. Under the terms of the June 2006 Collaboration Agreement, between the LNGL and Golar Energy, which remains in place, the two companies will continue to work closely in relation to alternative development options for the Gladstone LNG Project in order to try to achieve a positive outcome for shareholders.
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