Golar LNG pens deal to deploy FLNG in Argentina

Golar LNG has entered into definitive agreements with Pan American Energy for a 20-year deployment of a floating LNG (FLNG) vessel in Argentina, the company announced on July 5.

The FLNG project will monetise Argentine gas, tapping into the resources from the Vaca Muerta shale formation in the Neuquina basin. The project is expected to start LNG exports in 2027, establishing Argentina as an LNG exporter.

Golar stated that this venture is built on “a robust commercial foundation,” featuring a gas sales agreement from Pan American for the supply of gas and an FLNG charter agreement, which includes a base tariff and commodity exposure to LNG sales prices.

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

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

This initiative is envisaged to be the first phase of a potential multi-vessel project, and it is anticipated that other large natural gas producers in Argentina will join, the company stated.

Last month, Golar signed a deal with Nigerian state-owned energy company NNPC for the deployment of an FLNG unit offshore the Niger Delta. NNPC stated that the final investment decision on the project is expected by the end of this year, with the first gas likely to be produced in 2027.

Golar and NNPC plan to jointly develop specific gas fields within Nigeria, with a primary focus on utilising FLNG technology for the development of these gas fields.