FILE PHOTO: Oleksandr Kalinichenko / Shutterstock
Golar LNG Ltd. has finalized agreements with Pan American Energy (PAE) to deploy a Floating Liquefied Natural Gas (FLNG) vessel in Argentina for a 20-year term.
The project aims to monetize Argentine gas from the Vaca Muerta shale formation in the Neuquina Basin, known as the world’s second-largest shale gas reserve. The initiative is set to commence LNG exports by 2027, positioning Argentina as a new LNG exporter.
The venture is underpinned by a strong commercial framework, including a Gas Sales Agreement with PAE for gas supply and an FLNG charter agreement with Golar. The contract features a base tariff and commodity exposure to LNG sales prices.
The project plans to utilize Golar’s FLNG Hilli, which has a nameplate capacity of 2.45 million tons per annum (mtpa). The net tariff is approximately US$2.6 per mmBtu, based on 90% capacity utilization, with an additional commodity-linked pricing element. Golar retains the flexibility to swap for another suitable FLNG unit if necessary.
The Golar Hilli is known for being the world’s first FLNG converted from an existing LNG carrier. It began operations in 2018.
Golar will also acquire a 10% stake in Southern Energy S.A., a joint venture with PAE. Southern Energy S.A. will handle the purchase of domestic natural gas, operations, and the sale and marketing of LNG from Argentina.
The initiative is the first phase of a potential multi-vessel project, with expectations that other major natural gas producers in Argentina will join.
“We are excited to enter a partnership with Pan American Energy, one of the leading energy companies in Latin America,” said Golar’s CEO, Karl Fredrik Staubo. “The project will provide an international outlet for Argentina’s vast and attractive natural gas reserves, creating value for Argentina and its gas stakeholders. The project expands Golar’s global footprint, with further growth potential.”
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