Exmar Settles Tango LNG Dispute with YPF
Belgian LNG tanker owner Exmar has agreed a fee with Argentine producer YPF for the early termination of the charter for the Tango floating liquefaction unit, it said October 19. YPF is to pay $150mn, ending the arbitration proceedings. The first instalment of $22mn was made the day of the announcement and the balance of $128mn is payable in 18 monthly instalments backed by adequate financial security.
In September, Exmar had booked a paper loss of $17.7mn in uncollected revenues from YPF. Justifying its non-payment, YPF had claimed force majeure, as the Covid-19 pandemic limited its ability to produce enough gas for domestic needs and export. Exmar rejected this claim.
The loan agreement with Bank of China and Deutsche Bank with respect to Tango foresees a replenishment of the debt service reserve account for an amount up to $40mn, and the details are now being discussed. The FLNG’s immediate availability, proven track record and operational experience are the right elements to rapidly unlock new markets for gas exports. Commercial leads for new employment are actively pursued, Exmar said.
Commercial operations began in November last year, when the two counterparties celebrated Argentina's entry into the select club of LNG exporters, which it left the following spring.