Golar Receives First Cash from Ghana LNG Project

Shipowner Golar LNG has finally received a payment on its FSRU Golar Tundra, the ship which this summer looked set to become west Africa’s first LNG import terminal but instead sailed into a political quagmire. But Golar said in its 3Q results on November 30 it remains in dispute with its charterer.

The ship arrived in June offshore Ghana but has remained anchored 5 km from shore ever since. The charterer refused to pay charter fees while parliament prevented the vessel from berthing. “FSRU Golar Tundra remains at anchor off the coast of Ghana,” confirmed Golar on November 30.

But Golar added: “On October 19, the charterer, West Africa Gas ("WAGL") received [Ghanaian] parliamentary approval for their ten-year gas sales agreement with the government of Ghana.” WAGL is a joint venture of Nigeria's state oil and gas producer NNPC and private firm Sahara Energy.

“Golar has commenced legal proceedings in order to collect amounts due under the charter. The company does however maintain dialogue with WAGL to find a mutually agreeable way forward that bridges the original and later start date required and on November 29 the company received its first payment from WAGL for amounts outstanding under the charter.” So the payment arrived just one day before Golar's 3Q earnings.

Golar LNG reported a 3Q 2016 loss of $28.3mn, following on from its 2Q loss of $37.2mn; it noted that it had not included any revenue from the WAGL charter in its 3Q earnings.

Two rival consortia are trying to develop Ghana’s first LNG terminal, yet Total has said it believes its Cote d’Ivoire project – due to start operating 2018 – could still become West Africa’s first.

Golar pointed to recent highlights, such as the formation of joint ventures with Schlumberger (OneLNG – see graphic below) and New York-fund Stonepeak (Golar Power), and its final investment decision on a Brazil LNG/power joint venture (Sergipe Power) that also entered into a 25-year contract to buy LNG from Qatari-led Ocean LNG.

Structure of Golar's OneLNG partnership with Schlumberger, and how it relates to Ophir's Fortuna floating LNG project in Equatorial Guinea, now eyeing a start up in 2020 subject to a final investment decision in early 2017 (Graphic credit: Golar LNG 3Q results)

Mark Smedley