A Golar LNG joint venture is moving forward with the development of the first import terminal in the north of Brazil as it continues to push into energy infrastructure.
The New York-listed company has announced that Golar Power — an outfit backed by Golar and Stonepeak Infrastructure Partners — had signed a memorandum of understanding with Norsk Hydro for the development of the terminal.
Golar Power chief executive Eduardo Antonello said the terminal could replace 1.8m tonnes of diesel, coal and other more carbon-intensive fossil fuels.
"The project should have the potential to significantly reduce energy costs, support environmentally responsible and sustainable industrial growth throughout this immense region, and facilitate the unlocking of its unique natural resource endowment and economic potential," he said.
The company said a final investment decision on the terminal should come in the next four to six months.
If completed, the terminal will supply gas to Norsk Hydro's Alunorte plant and to Golar Power subsidiary Centrais Eletricas Barcarena's thermal power plant, while providing natural gas across the state of Para.
Golar Power has several facilities in Brazil, three of which are expected to be generating cash by 2023, with Fearnley Securities suggesting the company could be providing $150m of Ebitda by that point.
Last year, Golar LNG announced plans to spin off its 16 LNG carriers in an effort to becoming a pure-play LNG infrastructure company.
The initial plan was to see it combine with Awilco LNG and TMS Cardiff Gas, but by autumn the plan had fallen apart over "misalignment" between the partners.
Golar has sought other options since, but to no avail.
In June, Jefferies analyst Randy Giveans said it could look to sell the fleet.
In preparation for a move, Golar put most of its ships on long-term charters.
The entire fleet, across Golar LNG and Golar LNG Partners, is worth $509m, according to VesselsValue.
In late trading on Thursday, Golar LNG shares were up $0.61 to $7.83. Golar LNG Partners shares were down a cent to $2.83.
