Bermuda player becomes sole owner of FLNG unit

Bermuda-headquartered owner and operator of liquefied natural gas (LNG) midstream infrastructure Golar LNG has got its hands on ownership interests Seatrium and Black & Veatch held in a floating LNG (FLNG) unit, which enables it to take full ownership of the asset that recently lined up a 20-year assignment in Argentina.

As Golar LNG’s acquisition of Seatrium and Black & Veatch’s minority interests in the FLNG Hilli entails all third-party stakes in the asset, including 5.45% common units, 10.9% Series A shares, and 10.9% Series B shares, the transaction is equivalent to around 8% of the full FLNG capacity.

According to the Bermuda-based firm, the total consideration for the acquisitions is $90.2 million, of which $59.9 million is in equity and $30.3 million is a pro-rata share in the existing FLNG Hilli debt facility. The company’s full economic interest in the increased ownership of the FLNG Hilli will be effective from January 1, 2025.

Karl-Fredrik Staubo, Golar’s CEO, commented: “Golar is pleased to take full ownership of FLNG Hilli. The increased ownership will give immediate cash flow accretion and is expected to add approximately $0.5bn of adjusted EBITDA backlog. We would like to thank our long-term partners Seatrium and Black & Veatch as co-investors and we look forward to continue to work with both organizations in our ongoing and future FLNG growth ambitions.” 

This FLNG is on contract with Perenco in Cameroon until July 2026, when it is expected to relocate to Argentina to start a 20-year job with Southern Energy, a consortium of natural gas producers in Argentina. The contract in the South American country remains subject to defined conditions precedent, including an export license, environmental assessment, and final investment decision (FID) by Southern Energy.

The $3 billion project will enable the FLNG Hilli to be installed in the San Matías Gulf, off the coast of Argentina’s Río Negro province, to export gas from the Vaca Muerta shale deposit in the Neuquén basin. The FID for the first phase of a potential multi-vessel project is expected to be taken in Q1 2025. The start-up of the project is slated for 2027. A few weeks ago, YPF came aboard this FLNG project, which is being co-developed by Golar LNG and Pan American Energy (PAE) in Argentinian waters.

Golar LNG claims that the FLNG Hilli has demonstrated “market leading operational uptime for FLNGs globally,” since it embarked on its contract in Argentina in 2018, delivering 124 LNG cargoes and offloading over 8.5 million tons of LNG. This comes shortly after the Bermuda player arranged with Seatrium to resolve other remaining open items.

The agreement led Golar to make a $7 million payment to Seatrium concerning a Hilli Train 3 utilization bonus and settlement of historical work related to an LNG carrier (LNGC), known as Golar Gandria, which the firm used to own. As a result, Golar LNG confirms that there are no outstanding contractual arrangements with Seatrium related to existing assets.

The company joined forces with CIMC Raffles and Black & Veatch in September 2024 to bring to life an MK II FLNG vessel with an annual liquefaction capacity of 3.5 million tons of LNG per annum (mtpa).