Golar LNG Expands Ownership in FLNG vessel Hilli
Golar LNG, a leader in floating liquefied natural gas (FLNG) technology, has made a significant move by acquiring minority ownership interests in the FLNG vessel Hilli. This acquisition comes from Seatrium and Black & Veatch, marking a strategic expansion for Golar LNG in the FLNG market. The deal, valued at $90.2 million, is set to enhance Golar’s position in the industry and provide immediate financial benefits. With this acquisition, Golar LNG aims to solidify its presence in the global energy sector, particularly in liquefied natural gas production and distribution.
Details of the Acquisition
The acquisition involves Golar LNG obtaining all third-party interests in the FLNG Hilli, which has a capacity of 2.4 million tonnes per annum (mtpa). Specifically, Golar will acquire 5.45% of common units, along with 10.9% of Series A and Series B shares. This transaction represents approximately 8% of the total capacity of the FLNG unit. The financial breakdown of the deal includes $59.9 million in equity and $30.3 million as a pro-rata share in the existing debt facility associated with the Hilli. The transaction will officially take effect on January 1, 2025, making Golar LNG the sole owner of the vessel.
The Hilli is currently under contract with Perenco in Cameroon, where it has successfully delivered 124 LNG cargoes, totaling over 8.5 million tonnes of LNG. This contract is set to conclude in July 2026. Following this, Golar LNG plans to relocate the unit to Argentina, where it will enter into a 20-year contract with Southern Energy, a consortium of prominent natural gas producers in the region. However, this future contract is contingent upon obtaining an export license, completing an environmental assessment, and making a final investment decision.
Financial Implications and Future Prospects
Golar LNG’s CEO, Karl-Fredrik Staubo, expressed optimism about the acquisition’s financial implications. He stated that the increased ownership would lead to immediate cash flow benefits and is expected to contribute approximately $500 million to the adjusted EBITDA backlog. This financial boost is crucial for Golar LNG as it seeks to expand its operations and enhance profitability in a competitive market.
In addition to the acquisition, Golar LNG and Seatrium have resolved other outstanding issues. This includes a $7 million payment from Golar to Seatrium related to a Hilli Train 3 utilization bonus and the settlement of historical work concerning the former Golar-owned LNG carrier, Golar Gandria. With these agreements, there are no remaining contractual obligations between Seatrium and Golar regarding existing assets, allowing Golar to focus on its future endeavors without any encumbrances.
As Golar LNG moves forward with its plans, the acquisition of the FLNG Hilli positions the company for growth in the liquefied natural gas sector. The strategic relocation to Argentina and the long-term contract with Southern Energy could further enhance Golar’s market presence and financial performance in the coming years.
