Redeploying a floating LNG production unit from West Africa to South America is set to cost up to $300m, Golar LNG revealed in a results call today.
Chief executive Karl Fredrik Staubo said the FLNG unit Hilli will need to disconnect in Cameroon and shift to a yard for upgrading works for its 20-year contract and the move to Argentina.
The company estimates the cost will be between $200m and $300m for the “total voyage”, including bunkering, crew, tugs and upgrading works.
Golar is working to conclude agreements with Argentinian shale gas developer Pan American Energy, which issued a 20-year reservation notice in October on the Hilli. LNG exports are scheduled to start in 2027.
Staubo said a new joint venture with Pan American will give Golar commodity exposure, and discussions are being held to bring other national and local partners into the project.
Asked about an option for a second LNG carrier-to-FLNG conversion that Golar is holding at CIMC Raffles in China, he said that to meet the 2028 delivery, it would need to begin committing to some long-lead items in the first quarter of 2025, but this can be easier as a repeat customer.
Golar has to declare its option next year.
“We see strong positive progress for new FLNG opportunities,” Staubo said.
He said the sector is growing, with eight units on the water and four under construction.
Staubo said Hilli has produced 122 cargoes and more than 8m tonnes of LNG since it started exports in 2018.
The CEO said Golar’s Mk II, 3.5-mtpa LNG carrier-to-FLNG unit conversion, which delivers in 2027, is the only open FLNG capacity globally.
The company has been able to move forward by starting to order long-lead items around 18 months ago.
The new unit is set to increase its liquefaction capacity by 70%.
Several of the projects Golar is in discussions over are for more than one FLNG unit, Staubo said, adding that these can offer synergies and savings.
Asked about Golar’s agreement with Nigeria’s NNPC on an FLNG unit, he said it is “unlikely” to materialise this year, but the company is one of the contenders for contracting the conversion in 2025.
With its two existing FLNG units, Hilli and Gimi, plus the Mk II conversion and an option for a second converted unit, Golar sees the potential to more than double its liquefaction capacity to over 12 mtpa and triple its potential Ebitda generation.
The CEO said Golar has achieved major milestones this year.
For 2025, its focus is on refinancing Gimi, concluding conditions with Pan American, securing a charter for its Mk II conversion and once that is locked in, executing on its optional unit.
