Golar LNG Limited confirmed yesterday that that FLNG Hilli Episeyo has been accepted under its Liquefaction Tolling Agreement with Perenco Cameroon SA and Societe Nationale Des Hydrocarbures and is now in full commercial operation.

Golar LNG announces FLNG Hilli Episeyo customer acceptance
Caption: The world's first converted floating liquefaction vessel, the Hilli Episeyo, was named in a ceremony in Keppel Shipyard on July 2, 2017 - Image courtesy of Keppel

The commissioning tests included the requirement to produce a set quantity of LNG in a period of 16 days of continuous production from minimum 2 trains at a level of 7500 m3 per day on average.

The commercial tolling rate commencing will immediately add approximately $164 million in EBITDA* of base tolling income per year plus an additional $45 million operating cash flow per year based on the oil price linked element of the contract (assuming that Brent remains at an average of $75/bbl).

As a consequence of the commencement of commercial operations Golar is now able to draw on the $960 million lease financing facility that will replace the existing loan. It is estimated that a minimum of approximately $140 million in additional free cash will be released from this facility after meeting maximum remaining capital costs and net of minority interests.  

The drop down of 50% of the base tolling income to Golar LNG Partners L.P. is expected to be concluded shortly. The additional added contribution of approximately $82 million in effective EBITDA* and effective EBITDA  backlog of $650million, given the 8 year contract term, will significantly strengthening the MLP's financial position and supporting solid distribution going forward.

FLNG Hilli Episeyo is the world's first FLNG vessel that has been developed as a conversion project from an LNG carrier.  This conversion approach adds value through its accelerated time to first LNG production and cost competitive pricing.

The commencement of commercial operations of Hilli Episeyo took place in less than 4 years after speculative contracts were signed with Keppel Shipyard.  The project cost is expected to be approximately $70 million under budget.

The Board wishes to thank all employees for an impressive job and a very well executed project.  The commencement of Hilli puts Golar in an unchallenged position as a reliable provider of low cost FLNG technology.

Source: Golar LNG