Golar wins arbitration award on Ghana FSRU

01 June 2017 Week 21 Issue 471

Ghana’s hopes for a floating storage and regasification unit (FSRU) have slipped, with Golar LNG receiving an interim arbitration award. The company, giving its first quarter results on May 31, said it had received an award of US$23.3 million, which covers the period to the end of 2016.

Golar said it was seeking a further payment for the subsequent period, saying US$22 million had come due and would also be pursued through arbitration. Golar went on to say it would seek an award against the guarantor

The company noted the charterer, West Africa Gas Ltd (WAGL) had made “no further progress” on the construction of land-based infrastructure to link up with the FSRU. WAGL is a joint venture consisting of Nigeria’s Sahara Group and Nigerian National Petroleum Corp. (NNPC).

Golar LNG reported a US$41.4 million operating loss in the first quarter of the year, from a loss of US$32.7 million in the fourth quarter of 2016. The improvement came as a result of improved shipping rates and activity levels, the statement said. The net loss reached US$65.8 million, from a profit of US$8.6 million in the previous quarter.

In the first quarter, the company issued a US$402.5 million convertible bond and paid down a previous convertible bond.

It went on to say it had secured a two-year contract for the Golar Grand, with an unnamed oil and gas major.

In Equatorial Guinea, Golar said the Fortuna LNG project was on track for a final investment decision (FID) in mid-2017. Fortuna should cost around US$2 billion, of which US$1.5 billion will go to converting the Gandria vessel and another US$500 million on upstream work. Golar’s contribution to the project in 2017 will be around US$47 million.

Golar works on the Fortuna project via its OneLNG venture, which has also struck a memorandum of understanding (MoU) with Malabo on another floating LNG (FLNG) development, tapping into stranded gas in Blocks O and I.

Vessel operating expenses increased to US$12.9 million, from US$900,000 in the previous quarter, which had benefited from the settling of an insurance claim on the Golar Viking. 

Prospects for this year are improving, the company said, with LNG capacity growing by 13% in 2017, versus 2016, while shipping will grow by 9%. Golar went on to say there was a consensus of a “sustained recovery” in the third quarter.

Golar is working on an FLNG project in Cameroon, with the Hilli Episeyo. Pre-commissioning work is under way in Singapore, with the unit expected to depart from the yard in around six weeks. Commissioning and production in Cameroon, with Perenco, is due to start at the end of September.

Edited by

Richard Lockhart

Editor

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