Golar 'Still Backing Fortuna' Too

The Ophir-led Fortuna FLNG project offshore Equatorial Guinea – which has already missed several target dates for a final investment decision (FID) – faces “significant delay due to lack of acceptable financing solution,” said shipowner Golar LNG in its 1Q results May 31. Nonetheless Golar says it is still backing the project.

It confirmed that Schlumberger is to exit the OneLNG joint venture (51%/49% Golar-Schlumberger) that has been part of the Fortuna project, and that OneLNG will be wound down.

Golar LNG CEO Iain Ross told analysts: “We continue to support the project. We are still having finance discussions – I was involved as recently as late last week – so we don’t think it [Fortuna] is dead. We are in talks to replace Schlumberger. We believe in the project and its strong economics.”  Asked by one analyst, he declined to give the odds for Fortuna going ahead, or proceeding without current operator Ophir. The host government in Equatorial Guinea warned May 10 it might scrap the project or hand operatorship to another firm, if FID were not taken by end-2018.

There was happier news from Golar offshore Cameroon where its Hilli Episeyo is in use by the Perenco-operated FLNG venture. It exported the first cargo – indeed the first by a West African FLNG venture – on May 17.  Golar said May 31 a second cargo there is loading onto the Golar Maria. Golar said it anticipates full commercial acceptance by Perenco of its role in the project "in the coming days."

Golar LNG’s 1Q net loss in 1Q2018 was $21mn, from a $65.8mn loss in 1Q2017 and a small $3.8mn profit in 4Q2017.

Last month BP chose Golar to progress front end engineering work (Feed) on its Tortue FLNG project. Golar said it expects to complete the Feed in readiness for a possible FID on the project late 2018 and notes "strong appetite from lenders interested in financing the project." First LNG is expected late 2021 or early 2022, according to BP.

Regarding the Sergipe FSRU/power plant project due for start-up 2020, Golar said May 31 that already around 2000 workers are on site building the power plant in northeast Brazil; it expects to earn $100mn/yr in pre-tax earnings (Ebitda) from the project once operational, mainly from chartering of the FSRU.

On the wider LNG carrier market, Ross said the global market is “structurally short by about 25 vessels” and said he expected a firming in day-rates from the 3Q2018 onwards.

Graphic credit: Golar LNG