Golar, LNG Ltd. agree on Gladstone LNG project

By OGJ editors
HOUSTON, Feb. 23 -- Golar LNG Ltd. has signed a heads of agreement with Liquefied Natural Gas Ltd. (LNG Ltd.) that outlines covering joint development of a 1.5 million tonne/year LNG liquefaction plant at Gladstone, Queensland.

The plant will produce LNG from coalbed methane produced from Arrow Energy Ltd.'s gas fields in Central Queensland.

Gladstone LNG Pty. Ltd. (GLNG) will build the plant, and Golar and LNG Ltd. agreed to each take an equity position of 40% in the joint venture. Arrow Energy has an option to take the final 20%. The estimated development cost for the LNG facility is $500 million.

The LNG will be loaded onto LNG carriers for export markets. First production is currently scheduled for late 2012. The project also offers expansion opportunities.

Under terms of the HOA, Golar will purchase the full LNG output from the project on a fob basis. Deliveries will employ at least two of Golar's existing LNG carriers, the company said.

Golar anticipates that, in addition to financing raised at the project level, it also will be able to raise financing in connection with the offtake arrangements.

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