US-listed New Fortress Energy has sold its stake in the floating LNG unit Hilli to Golar LNG in exchange for $100m in cash and the return of its outstanding shares.
New Fortress said in an announcement that Golar will acquire its entire interest in the 2.4 million tonnes per annum, Cameroon-located FLNG unit Hilli.
The company said it will acquire all the New Fortress shares held by Golar. In mid-November, Golar listed its holding as 2.9% of New Fortress and valued this at $302m.
Under the deal, Golar said it will acquire the 50% interest in Trains 1 and 2 of FLNG Hilli and will take over approximately $323m in debt obligations linked to the unit.
New Fortress said the sell-off reduces the number of the company's outstanding shares to about 204.7m
The company said the transaction is expected to close in the first quarter of 2023.
New Fortress chairman and chief executive Wes Edens said: “With this transaction, we will sell our minority interest in the Hilli in exchange for 4.1 million shares of NFE and $100 million in cash.
“We believe this is a fair economic result for both ourselves and Golar.”
Edens, a close associate of Golar chairman Tor Olav Troim, said: “… from a strategic perspective, it will allow us to focus solely on our own FLNG portfolio that we own 100% of as well as buy back NFE stock at an attractive valuation.”
He described Golar as having been “a meaningful partner for the past several years” and said New Fortress has appreciated the opportunities to collaborate with the company.
New Fortress plans to supply some 7 million tonnes per annum of LNG by the end of 2024 from up to six FLNG units it is building by converting offshore assets.
The company has said the first unit will be located off Altamira in Mexico and come online in May or June 2023.
Golar chief executive Karl Staubo said: “Today’s announced transaction increases Golar’s portion of cash flow generation from Hilli’s existing contract until July 2026.
“The transaction continues our company simplification, reducing our investments in listed securities whilst unifying the ownership of the FLNG Hilli,” he added.
The newly FLNG-refocused company, which sold off stock in New Fortress and Cool Co in 2022, has ordered long-lead items for one of its $300m Mark II LNG carrier-to- 3.5-mpta FLNG unit conversions.
It is due to complete the conversion of the LNG carrier Gimi into an FLNG unit that will serve energy major BP’s Greater Tortue Ahmeyim for Mauritania and Senegal in the first half of this year.
The FLNG unit Hilli has been producing LNG offshore Kribi in Cameroon since May 2018 and to date has produced more cargoes than any other LNG floater.
Its customers are oil and gas company Perenco and Cameroon’s national oil firm Societe Nationale des Hydrocarbures (SNH).
