BP Earmarks Tortue FLNG Charter to Golar

Golar LNG said late April 19 it had reached a preliminary agreement to charter out a floating liquefaction vessel to the BP-led Tortue FLNG project, offshore Mauritania and Senegal.

The London-based shipowner said it had entered into a preliminary agreement and exchanged heads of terms  for a charter agreement with two wholly-owned BP subsidiaries (BP Mauritania Investments and BP Senegal Investments) as block operators.  The heads of terms represents a commitment between both parties to translate the key commercial terms into a full agreement and proceed with front-end engineering and design (Feed) on the provision of an FLNG vessel to support the development of Phase 1A of the Greater Tortue /Ahmeyin field. 

The preliminary agreement creates obligations on Golar to progress Feed work and to be ready for a vessel conversion from July 1 2018, contingent on a project final investment decision from the BP-led project, which Golar expects end-2018. The vessel conversion would take place at Keppel Shipyard in Singapore, which converted the FLNG Hilli Episeyo now being commissioned as the Cameroon FLNG ship.

There is also an option, but not an obligation, for BP to charter a second FLNG vessel. In the event that FID is not taken, Golar LNG said that "customary termination fees will apply."

Golar CEO Iain Ross commented: "This agreement with BP underscores the value that Golar's unique FLNG proposition brings to monetising gas reserves to LNG at competitive prices. The FLNG contract shows solid long-term economics on an unleveraged basis."

Earlier this week BP awarded a Feed contract to TechnipFMC for part of the overall Tortue project, and a month ago it awarded the initial Tortue FLNG subsea infrastructure Feed contract to US McDermott and Baker Hughes. If BP and its other key partner Kosmos take FID on Tortue by end-2018, both have recently said it should be possible to produce first LNG from the venture by 2021.