Southern Energy and Golar LNG announced FID May 2 on a 20-year redeployment charter of the FLNG Hilli Episeyo offshore Argentina.
In addition, the two parties have signed definitive agreements for a 20-year charter for Golar’s MKII FLNG, which is undergoing conversion at the CIMC Raffles shipyard in Yantai, China. This charter remains subject to FID and regulatory approvals, although both are anticipated later this year.
FLNG Hilli, with a nameplate capacity of 2.45 MMt/year, is set to start its contract in 2027. The MKII FLNG, with nameplate capacity of 3.5 MMt/year, should begin its contract in 2028. Collectively, these agreements should provide $13.7 billion in revenue to Golar over 20 years before adjustments.
Southern Energy, created to provide LNG exports from Argentina, is owned by a consortium of Argentinian gas producers led by Pan American Energy (30%), YPF (25%), Pampa Energia (20%) and Harbour Energy (15%), along with Golar (10%). All have committed to supply their pro-rata share of natural gas to the FLNGs under gas sales agreements at a fixed price.
The project has the support of the country’s national and provincial governments, including approval from the province of Río Negro for the offshore and onshore environmental impact assessments for FLNG Hilli.
The FLNGs will be located close to each other, offshore in the Gulf of San Matias in the Rio Negro province, converting gas from the Vaca Muerta Shale formation onshore in Neuquen province.
Initially, FLNG Hilli will receive spare volumes from the existing pipeline network, although the consortium plans to construct a dedicated pipeline from Vaca Muerta to the Gulf of San Matias to supply gas to both vessels.
Harbour said the project should provide a processing and export capacity of about 6 MMmt/year of LNG. Under recently enacted legislation, Southern Energy has been awarded certain investment incentives including dollarization of revenues following three years of production.
The LNG will be made available to global gas markets.
