Golar LNG joint venture Hygo Energy Transition has inked a memorandum of understanding that will give it an anchor customer for its planned Barcarena LNG import terminal.
The outfit signed the MOU with Brazilian gas distributor Companhia de Gas do Para (GdP) that
The preliminary deal will allow a Hygo affiliate to supply natural gas and LNG to GdP and explore the local market potential once the negotiations are finalised and the contracts are executed, Golar said.
Hygo, a joint venture between New York-listed Golar LNG and Stonepeak Investment Partners, will use its planned floating storage and regasification unit-based Barcarena LNG import terminal to supply these volumes.
Construction of the facility is expected to start shortly with the terminal scheduled to be in operation in first half 2022.
The GdP deal comes just two days after Golar announced that an earlier MOU supply deal with Norsk Hydro, which was to be be based on Barcarena imports, was dead.
Hygo has been fighting to restore its reputation after its chief executive stepped down and later resigned in the wake of bribery allegations by the Brazilian authorities.
The fallout led to the company, which was formerly known as Golar Power, postponing a planned IPO.
In its offer documentation for the US listing Hygo had cited the Barcarena terminal development as one of a number of LNG hub and spoke import projects it is developing in Brazil.
The expected LNG demand for this terminal piles up day after day
Tor Olav Troim
Golar estimates the Para state terminal offers the potential to replace about 1.8 million tonnes per annum of LNG equivalents such as LPG, diesel, fuel oil, and coal.
The LNG demand for power generation is also significant, the company said.
Hygo has secured 25-year power purchase agreements for a 605 MW power station in the region adding 0.6 mtpa of LNG demand to the Barcarena terminal from January 2025, Golar said.
“This power station will be configured with the ability to run with a blend of up to 50% of hydrogen.
Hygo also expects to use the Barcarena terminal to provide an LNG supply solution to the new regional power auction.
Speaking about the new deal with GdP, Golar said: “The MOU is a result of Hygo’s continued efforts to reduce energy costs significantly and support environmentally-responsible and sustainable industrial growth in the immense Amazon region, and especially in the state of Para.”
Golar LNG chairman Tor Olav Troim said the company is committed to providing cleaner and cheaper fuel to its customers.
“GdP can count on Hygo’s full support in order to introduce natural gas and LNG in this great region in the first half of 2022," Troim said. "The expected LNG demand for this terminal piles up day after day."
GdP commercial director Fabio Amorim said his company's MOU with Hygo marks an important step towards introducing natural gas to Brazil's Para state.
“The Barcarena LNG terminal will transform the fuel supply in the region, and our clients will have an affordable solution to reduce their environmental footprint. The large industries established in the region and the environment will be the most benefited from this initiative," he said.
