FLNG Hilli Episeyo Starts Contract With Perenco, SNH

Owner and operator of LNG carriers Golar LNG informed that FLNG Hilli Episeyo has been accepted under its Liquefaction Tolling Agreement with Perenco Cameroon SA and Societe Nationale Des Hydrocarbures and is now in full commercial operation.

FLNG Hilli Episeyo is the world’s first FLNG vessel that has been developed as a conversion project from an LNG carrier. This conversion approach adds value through its accelerated time to first LNG production and cost-competitive pricing.

The commissioning tests included the requirement to produce a set quantity of LNG in a period of 16 days of continuous production from minimum two trains at a level of 7,500 cubic meters per day on average.

The commercial tolling rate commencing will immediately add approximately USD 164 million in EBITDA of base tolling income per year plus an additional USD 45 million operating cash flow per year.

As a consequence of the commencement of commercial operations, Golar is now able to draw on the USD 960 million lease financing facility that will replace the existing loan. It is estimated that a minimum of approximately USD 140 million in additional free cash will be released from this facility after meeting maximum remaining capital costs and net of minority interests.

The drop down of 50% of the base tolling income to Golar LNG Partners L.P. is expected to be concluded shortly. The additional added contribution of approximately USD 82 million in effective EBITDA and effective EBITDA backlog of USD 650 million, given the 8-year contract term, will significantly strengthen the MLP’s financial position, supporting solid distribution going forward, according to Golar.

The commencement of commercial operations of Hilli Episeyo took place in less than 4 years after speculative contracts were signed with Keppel Shipyard. The project cost is expected to be approximately USD 70 million under budget.