Golar LNG signs agreement for 20-year FLNG deployment in Argentina

July 5, 2024
Golar aims to deploy a floating liquefied natural gas vessel in Argentina to begin LNG exports in 2027.

Golar LNG Ltd. has signed a partnership with Pan American Energy (PAE) aimed at providing a outlet for natural gas reserves from Argentina’s Vaca Muerta shale formation.

Golar and PAE entered into definitive agreements for a 20-year deployment of a floating liquefied natural gas (FLNG) vessel in Argentina, Golar said in a release July 5. The project is expected to start LNG exports in 2027.

The partnership is built on a commercial foundation that includes a gas sales agreement from PAE for the supply of gas and an FLNG charter agreement with Golar which includes a base tariff and commodity exposure to LNG sales prices.

The project aims to utilize Golar’s FLNG Hilli, with a nameplate capacity of 2.45 million tonnes/year, providing an equivalent net tariff of $2.6/MMbtu (based on 90% capacity utilization) with an additional commodity-linked pricing element. Golar has flexibility to consider a swap alternative for another suitable Golar FLNG unit, the company said.

As part of the agreements, Golar will hold a 10% stake in Southern Energy SA, a dedicated joint venture with PAE, responsible for the purchase of domestic natural gas, operations, and sale and marketing of LNG volumes from Argentina.

Golar said the partnership is expected to be the first phase of a potential multi-vessel project in which other natural gas producers in Argentina will join.

The agreements are subject to customary conditions.