Golar LNG and Delfin Midstream have struck a deal to work together on a planned floating LNG (FLNG) project in the US Gulf of Mexico.
Golar, announcing the joint development agreement on June 21, said the plan covered up to four FLNG vessels, capable of producing as much as 13 million tpy.
The US Department of Energy (DoE) approved the Delfin project for exports to nonfree trade agreement (non-FTA) states on June 1.
A final investment decision (FID) on the project could be taken in 2018, with first LNG produced in 2021-22.
Delfin signed a similar agreement with Hoegh LNG in February 2015. However, in February 2016, Hoegh announced that it was putting its FLNG activities on hold, in order to focus on floating storage and regasification units (FSRUs).
Golar’s CEO, Oscar Spieler, said the company’s technology would be able to provide Delfin with the “lowest cost liquefaction solution in the North American market with a construction time of less than three years.” He went on to say that, using Golar’s technology, Delfin could take FIDs on smaller units – of 3 million tpy – at lower costs than large onshore projects.
Delfin’s CEO and chairman, Frederick Jones, said the planned project could “lead the second wave of US LNG projects. Golar’s flexible, floating liquefaction model has proven to be the world’s lowest cost liquefaction solution, allowing Delfin to offer innovative commercial solutions”. These included “reduced credit requirements, mid-term offtake contracts (approximately 10 years) and [free onboard] FOB and [delivered ex-ship] DES LNG pricing based on fixed price, S curves or tied to a variety of energy indexes.” The project would be offshore Louisiana’s Cameron Parish. Delfin bought the UTOS pipeline in 2014 from Enbridge, and submitted a deepwater port licence application in 2015. The project involves an onshore compression system, which will export onshore gas to FLNG units.
Golar noted its experience in the early stage FLNG sector. It is working on a project, the Hilli Episeyo, which will leave the Keppel shipyard in the third quarter of this year. A second plan, using the Gandria vessel, is expected to reach an FID shortly. These vessels will be located in Cameroon and Equatorial Guinea respectively.
The company said it was working on updated technology, which could be used at the Delfin project, and offering the lowest cost liquefaction in North America. Bechtel won front-end engineering and design (FEED) work on the Delfin project in 2015. Korea Development Bank (KDB) was reported to have agreed US$1.5 billion in loans to support the FLNG project, in June 2016.