Golar LNG says new production will be more than twice the amount delivered last year, but the market effect will not be felt until later in 2017.
The Oscar Spieler-led company says new trains at Gorgon LNG and Sabine Pass LNG, along with the Wheatstone LNG project, are all on track for 2017 start up, adding some 35 million tonnes of production. However, two-thirds of that will not start until the second half, and will not "influence the shipping balance until the end of the year."
Golar delivered the forecast as part of its fourth-quarter earnings results. The New York-listed company reported a net loss of $13.7m for the quarter, compared to a $59.8m loss from a year ago. The $0.14 per share net loss was better than analysts' estimates of a $0.38 per share loss.
LNG shipping improves
The company said LNG chartering was "light" in the first half of the fourth quarter, but improved as better Asian demand coincided with supply outages at the Gorgon and Brunei LNG facilities. Golar also saw more US cargoes redirected to Far East markets thanks to better prices.
Golar said although spot LNG ship supply remains ample, "prompt available shipping is approximately half what it was in January 2016. Increased activity in the market for short to medium term charter arrangements from the major operators has been noted."
But the company said "observed improvements in shipping rates and activity levels during the final weeks of 4Q will not translate into improved net revenues until 1Q 2017."
Golar Tundra charter not active
In its Golar Partners subsidiary, its six floating storage and regasification units (FSRUs) all achieved 100% availability during the quarter.
The partnership subsidiary itself reported net income rising 24% in the fourth quarter to $71.4m as the company saw operating expenses for the quarter drop by some 17%.
Golar says it is marketing the 129,000-cbm Golar Spirit (built 1981, converted 2007) after Petrobras terminated the charter in December.
The 170,000-cbm Golar Tundra (built 2015) remains at anchor off the coast of Ghana as charterer West Africa Gas Limited (WAGL) still has not taken full delivery of the unit. Golar says it continues to weigh legal options in regard to collecting charter fees, and is looking to trade the vessel in the short-term market.
If the WAGL charter does not go through, Golar says it may assume legal ownership of the vessel and repay approximately $107m to Golar Partners.
Golar Power to start 2020
Golar's FSRU-to-power project in Sergipe, Brazil with local utility Ebrasil is also moving forward. The company said the project remains on track to distribute power to its 26 committed customers beginning January 2020.
Golar will supply the newbuilding Golar Nanook for the project, with expected to delivery about May 2018. Golar said it has ordered the long-lead items for the Nanook in January.
Golar’s conversion of the LNG carrier Hilli for the Perenco-led Cameroon floating LNG project is also moving forward and "remains under budget." The vessel is scheduled for redelivery this May, and production is expected to start in September. Golar said its partners in the project are "firmly committed."
OneLNG financing comes together
Golar says a final investment decision on OneLNG, which will bring gas from offshore Equatorial Guinea through the FLNG Gandria, is expected in the first half of 2017. The Gandria is expected to cost $1.5bn to convert and Golar said it has a signed term-sheet with a syndicate of Far Eastern banks to fund the project. OneLNG is also said to be working on four or five additional projects in the region.
