Golar, Perenco and SNH agree increased capacity utilisation of FLNG Hilli Episeyo
20 July 2021 - 10:45PM
Golar LNG Limited (“Golar” or “the Company”)
announces today that it has agreed with Perenco Cameroon
(“Perenco”) and Société Nationale des Hydrocarbures (“SNH”) to
increase utilisation of the FLNG Hilli Episeyo (“Hilli”) (the
“Agreement”).
Commencing 2022 the capacity utilisation of
Hilli will increase by 200,000 tons of LNG, bringing total
utilisation in 2022 to 1.4 million tons. The tolling fee for the
2022 incremental capacity is linked to European gas prices at the
Dutch Title Transfer Facility (“TTF”). At current average 2022 TTF
gas prices (avg. $8.70/MMBTU for 2022) the increased capacity
utilization represents an expected US$26.1m in incremental Adjusted
EBITDA. For each US$1.00/mmBtu change in TTF, this Adjusted EBITDA
will increase (or decrease) by US$3.7m.
In addition to the 2022 capacity increase,
Perenco and SNH intend to drill and appraise 2 to 3 incremental
natural gas wells during 2021, and subsequently upgrade upstream
facilities in 2022 to support further sustained increases in
production from 2023 onward.
Under the Agreement, Perenco and SNH are granted
an option (“Option”) to increase capacity utilisation of Hilli by
up to 400,000 tons of LNG per year from January 2023 through to the
end of the current contract term in 2026. This has the
potential to increase total annual LNG production from Hilli to 1.6
million tons from January 2023 onwards. The tolling fee for the
2023+ incremental capacity will also be linked to TTF. Based on
current average 2023 TTF gas prices ($6.72/MMBTU avg. future price
for 2023) the additional 400,000 tons of production would generate
US$30.4m of incremental annual Adjusted EBITDA. For each
US$1.00/mmBtu change in TTF, this Adjusted EBITDA will increase (or
decrease) by US$7.4m. The Option must be declared during the third
quarter of 2022.
At current TTF future prices, and assuming the
Option is exercised, the incremental Adjusted EBITDA backlog of the
potential increase in capacity utilization for Hilli from 2022
until July 2026 is expected to be around US$113m.
Golar has an 86.9% economic interest in the
incremental Adjusted EBITDA generated as a result of the Agreement.
The Agreement will not change any existing terms, conditions,
tolling fees or the Brent Oil link associated with trains 1 and
2.
Golar CEO Karl Fredrik Staubo commented “We are
pleased to announce increased capacity utilization of our FLNG
Hilli, unlocking embedded value to our shareholders by utilizing
more of Hilli’s 2.4 million tons of liquefaction capacity. The
innovative tolling fee arrangement delivers on our announced
strategy to increase our upstream LNG and gas exposure. Today’s
announcement is a further testimony to Hilli’s strong track record
of 100% commercial uptime since delivery in 2018 and will benefit
all stakeholders involved in the project, as well as bringing us
closer to our target to reach full capacity utilization of
Hilli.”
FORWARD LOOKING STATEMENTS
This press release contains forward-looking
statements (as defined in Section 21E of the Securities Exchange
Act of 1934, as amended) which reflects management’s current
expectations, estimates and projections about its operations. All
statements, other than statements of historical facts, that address
activities and events that will, should, could or may occur in the
future are forward-looking statements. Words such as “may,”
“could,” “should,” “would,” “expect,” “plan,” “anticipate,”
“intend,” “forecast,” “believe,” “estimate,” “predict,” “propose,”
“potential,” “continue,” or the negative of these terms and similar
expressions are intended to identify such forward-looking
statements. Reference to Adjusted EBITDA assumes there are no
changes to the current accounting treatment of FLNG Hilli in our
financial reporting.
These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
other factors, some of which are beyond our control and are
difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such
forward-looking statements. You should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. Golar LNG Limited undertakes no obligation
to update publicly any forward-looking statements whether as a
result of new information, future events or otherwise, unless
required by applicable law.
Hamilton, Bermuda
July 20, 2021
Enquiries:
Golar Management Limited: + 44 207 063 7900
Stuart Buchanan
Golar LNG (NASDAQ:GLNG)
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