Golar LNG Partners LP (NASDAQ: GMLP), (Golar Partners) announces that it has executed a 15-year charter with an energy and logistics company for the provision of an FSRU (floating storage and regasification unit) and related services in the Atlantic Basin.
The charter provides the Partnership with the flexibility to nominate either the Golar Spirit or the Golar Freeze to service the contract provided that the nominated FSRU satisfies certain technical specifications ahead of project start-up, which is expected in the fourth quarter of 2018.
The vessel is expected to remain in service for up to 15 years without drydock and will therefore undergo drydocking as well as some minor modifications prior to service commencement. The capital element of the charter rate will vary according to demand for regasification throughput but includes a cap and a floor and so is expected to generate annual operating income before depreciation and amortisation of between approximately $18 and $22 million. The charter includes an option after 3 years for the charterer to terminate the contract and seek an alternative regasification solution, but only in the event that certain throughput targets have not been met. Additionally, Golar Partners will have a matching right to provide such alternative solution. The charter also includes a 5-year extension option.
Golar Partners CEO Graham Robjohns commented: "securing this contract demonstrates the underlying value of the Partnership's existing assets, adds significant term and revenue backlog whilst simultaneously reducing re-contracting risk. It also reflects the growing interest in smaller, cost competitive FSRUs that can facilitate the opening of niche markets previously considered uneconomic for LNG".
Source: Golar LNG