Golar LNG has received a force majeure claim from BP on its agreement to supply a floating LNG (FLNG) unit to develop the Greater Tortue Ahmeyim gas field project on the maritime border between Mauritania and Senegal in West Africa.
BP claims that it will not be able to receive the FLNG unit Gimi by the target connection date in 2022 due to the Covid-19 pandemic, Golar said in a Nasdaq filing.
The energy major estimated that the delay to the project would be about one year and said it would not be possible to shorten this hold-up.
Golar is currently converting its 126,277-cbm LNG carrier Gimi (built 1976) into a 2.3-million-tonnes-per-annum LNG floater at Keppel Shipyard in Singapore in a $947m project.
BP Mauritania Investments served the written notice to Golar subsidiary Gimi MS Corp under the 20-year lease-and-operate agreement between the two companies signed on 26 February 2019.
Golar pushes back
Golar said it has asked BP to clarify "how a force majeure event discovered as recently as the end of March 2020 could immediately impact the schedule by an estimated one year".
The midstream LNG developer and shipowner said it is "engaging in clarification and an active dialogue with BP to establish the duration of the delay and the extent to which this has been caused by the claimed force majeure event".
But Golar added that in anticipation of a potential delay, it has started discussions with Keppel — its main building contractor — to re-schedule activities in order to reduce and rearrange its capital spending commitments for 2020 and 2021.
In a results call held in February, Golar chief executive Iain Ross said the Gimi was undergoing the third of five dry-dock periods and was due to have its sponsons — which support the additional deck areas — fitted later this year.
Around 1,500 people have been working on the conversion of the vessel into a floater at the Singapore-based yard.
The Gimi is the second FLNG unit for Golar LNG.
The company was the first to convert an LNG carrier into a floater. Its first unit — the Hilli Episeyo — is in operation off Cameroon, where it has produced 34 cargoes.
