Golar LNG, BP reach agreement on commercial reset for FLNG Gimi
Golar LNG and BP, the operator of the Greater Tortue-Ahmeyim (GTA) LNG project situated on the maritime border of Mauritania and Senegal, have executed agreements to implement a commercial reset for FLNG Gimi, Golar LNG announced on August 5.
The commercial reset agreement aims to simplify contractual cash flows and resolve previous disputes related to payment mechanisms for pre-commercial operations date (COD) contractual cash flows. Under this agreement, Golar and BP have agreed to an updated schedule of daily payments until the COD.
These daily payments include step-up mechanisms based on project milestones leading up to the COD and are secured by long stop dates. Additionally, Golar will receive certain lump sum bonus payments contingent on achieving specific project milestones. These pre-COD cash flows are expected to be deferred on the balance sheet and amortized over the 20-year contract term starting from the COD.
"The commercial reset settles all ongoing disputes, including the current arbitration process, and re-aligns the parties towards reaching COD," the company stated.
To expedite the time to COD, the parties have also agreed to commence the commissioning of FLNG Gimi with an LNG cargo before the availability of gas from the floating production storage and offloading (FPSO) unit.
BP announced on June 4 that the FPSO vessel had reached the final site of the GTA LNG project. The GTA Phase 1 development is expected to produce approximately 2.3mn tonnes/year of LNG for more than 20 years. It marks the first gas development in this new basin offshore Mauritania and Senegal.
The FPSO will process over 500mn ft3/day of gas, removing water, condensate, and impurities before transferring it via pipeline to the floating LNG vessel at the hub terminal approximately 10 km offshore. At the FLNG vessel, which arrived at the site earlier this year, the gas will be cryogenically cooled, liquefied, and stored before being transferred to LNG carriers for export. Some of the gas is allocated to meet the growing demand in the two host countries.
In February of the previous year, BP and its partners confirmed the development concept for the second phase of the GTA LNG project. Known as the GTA Phase 2 expansion project (GTA2), this development will be evaluated for a gravity-based structure (GBS) foundation, with an anticipated total capacity ranging between 2.5 and 3mn tonnes/year.