Golar LNG: Still No Progress in Ghana
Golar LNG provided an update May 31 on its two West Africa floating liquefaction projects, but said that a Ghana floating import project in which it is involved has made “no further progress.” The shipowner reported a 1Q 2017 net loss of $65.8mn, contrasting with a net profit of $8.6mn in 4Q2016.
Its ship (FSRU) offshore Ghana was delivered by Golar LNG one year ago. However charterer WAGL (a joint venture of Nigeria's state NNPC and private firm Sahara Energy) failed in 2016 to secure even a Ghanaian license to import LNG and has since failed to connect the ship by pipe to shore.
“FSRU Golar Tundra remains anchored off the coast of Ghana,” said Golar LNG adding: “Charterer, West Africa Gas Limited [WAGL], has made no further progress with the construction of supporting land-based infrastructure. Golar has been granted an interim arbitration award of $23.3mn [to cover] the period up to December 31, 2016. Since then, a further $22mn has become due and this will also be pursued through the arbitration process, in addition to amounts accruing thereafter. The company is now seeking an award against the guarantor.”
Golar LNG said that a 'put option' in respect of FSRU Golar Tundra has now been exercised by Golar Partners, the ship's current owner, "at a price equal to the original purchase price" which the latter paid. Closing of this put option is due June 2017 and will be costly for Golar LNG.
It now looks possible that the languishing WAGL project in Ghana may be overtaken there next year by a rival project supported by Hoegh LNG.
Cameroon FLNG ‘on schedule’
On a much more positive note, conversion of the FLNG Hilli Episeyo is “nearing completion and within budget”; its departure from its Singapore shipyard is expected in six weeks, and a naming ceremony is scheduled for July 2. This will be West Africa and Cameroon’s first floating liquefaction (FLNG) project. Golar LNG said that upstream operator “Perenco are on track with their scope of works” and that, barring unforeseen issues, the FLNG ship could start up end-September.
Malabo eyes second FLNG unit
Golar LNG’s joint venture with Schlumberger, called OneLNG, entered into a “binding memorandum of understanding with the Ministry of Mines and Hydrocarbons of Equatorial Guinea to explore the liquefaction and commercialisation of natural gas” on May 29. It will focus on Blocks O and I offshore Malabo, the nation's capital, and would require a second FLNG vessel.
The first such vessel, Gandria, for Equatorial Guinea is ready for conversion to become the Fortuna FLNG producer vessel, for expected start up in 2020. Yet as Golar LNG noted its May 31 results: “The effectiveness of the [Gandria] engineering procurement and construction contract executed by Golar does however remain subject to a Final Investment Decision.” This remains outstanding. However on May 9, upstream operator Ophir's CEO Nick Cooper told the Flame conference in Amsterdam that the 2.5-2.8mn mt/yr Fortuna FLNG project is close to signing offtake agreements, a positive sign.