Golar LNG Ltd. and Perenco Cameroon have reached an agreement for the development of a floating liquefied natural gas (FLNG) export project in Cameroon, regarding the material commercial terms and conditions for the project.
The tolling agreement, which defines the material commercial terms and conditions for the project, is now subject to finalization with Societe Nationale de Hydrocarbures (SNH) and government approval. Similarly, the Midstream Gas Convention setting out the regulatory and fiscal regime governing the FLNG operations in Cameroon is being progressed in parallel with the tolling agreement and is also now subject to finalization with the government. It is anticipated that final approval by all parties (including the government in Cameroon) for the tolling agreement and the Midstream Gas Convention will take place late in the third quarter of 2015.
For the past two years, Golar, Perenco, and SNH have been developing an FLNG export project located near shore off the coast of Cameroon, situated in an area of benign sea states and utilizing Golar's floating liquefaction technology (GoFLNG). The project is based on the allocation of 500 Bcf of natural gas reserves from offshore Kribi fields, which will be exported to global markets via the GoFLNG facility Hilli, now under construction at the Keppel Shipyard in Singapore. Golar will provide the liquefaction facilities and services under a tolling agreement to SNH and Perenco as parties of the upstream joint venture.
It is anticipated that the allocated reserves will be produced at a rate of 1.2 million tonnes of LNG per annum, representing approximately 50% of the vessel's nameplate production capacity, over an approximate eight-year period. Production is anticipated to begin in the second quarter of 2017.
The project in Cameroon is expected to deliver an EBITDA for Golar in the first full year of operation, based on the utilization of two of the available four liquefaction trains, in the range of $170 million to $300 million, with a flexible tolling structure that correlates to Brent crude oil prices ranging from a floor of $60/bbl to a cap of $102/bbl. The marketing of LNG from the project remains the responsibility of Perenco and SNH.