Golar LNG Limited ("Golar" or "the Company") announces today that it has entered
into a 50/50 joint venture with investment vehicles affiliated with private
equity firm Stonepeak Infrastructure Partners ("Stonepeak"). The joint venture
company, Golar Power Ltd ("Golar Power"), will offer integrated LNG based
downstream solutions, through the ownership and operation of floating storage
and regasification units ("FSRU"'s) and associated terminal and power generation
infrastructure.
Stonepeak shares Golar's ambition to aggressively grow in the FSRU and LNG
fueled power market and is committing $290 million in new equity to develop
Golar Power.
Stonepeak Senior Managing Director, Luke Taylor, commented: "We are excited to
partner with the leading player in the LNG downstream market and see compelling
opportunities in this market to build and operate long term LNG and power
infrastructure with high quality counterparties. While our initial commitment is
$290 million we hope to invest up to $500 million in the coming years".
Golar comments: "By establishing this downstream entity with a strong financial
partner that has extensive experience in the energy business Golar is able to
accelerate the realization of its downstream ambitions and exploit the
unprecedented number of opportunities in the current market".
Golar Power's initial asset base will comprise the FSRU currently being
constructed at Samsung shipyard, two modern 160,000 cbm trifuel LNG carriers
suited for conversion to FSRUs, and the right to invest in up to 25% of the
Sergipe Power project. The Sergipe Power project is progressing well and is
expected to take FID in the second half of 2016. Golar will also grant Golar
Power a one year option to acquire from the Company a further two LNG carriers
for conversion to FSRUs. Upon closing, Golar Power will immediately commence
conversion of the first LNG carrier to a FSRU.
Subsequent to the formation of Golar Power and the contribution of the
abovementioned assets, the Company has sold a 50% interest in Golar Power to
Stonepeak. Stonepeak will acquire its 50% of Golar Power for $117 million in
cash, subscribe to $100 million in preference shares on closing of the deal and
commit to $75 million in additional equity. This, together with an additional
$75 million funding commitment from Golar, in the period before Q1 2018, is
expected to be sufficient including debt financing to fully finance the
conversion of the two carriers to FSRUs, take delivery of the 2017 new-build
FSRU and complete the financing of its share of the Sergipe Power project.
Approximately $214 million in ship mortgage debt and $217 million of remaining
newbuilding capex on the FSRU is projected to be transferred to Golar Power. The
transaction will improve Golar's liquidity position.
LNG prices are at a significant discount to oil prices and Golar Power sees a
range of potential LNG importers who would benefit from a rapid switch to gas.
The first converted vessel is expected to be available within 16 months. There
are only three unfixed FSRU newbuildings presently under construction and
delivering within the next 28 - 30 months. Golar Power sees well in excess of
three employment prospects that could be met within this window. The conversion
model allows Golar Power to cost effectively and timeously address projects with
bespoke requirements at a price that remains competitive with the all-in
delivered cost of a newbuild equivalent. As the only company to have
successfully converted LNG carriers to FSRUs, Golar expects that this
partnership with Stonepeak will once again position it to aggressively exploit
this competitive advantage.
Golar Power will also enter into an Omnibus Agreement with Golar LNG Partners
L.P. ("the Partnership"). This agreement will govern the events upon which the
Partnership will be able to acquire assets from Golar Power.
Clarksons Platou Securities AS acted as Sole Financial Advisor.
This transaction is subject to customary financial closing conditions.
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements concerning future
events and Golar's operations, performance and financial condition. Forward-
looking statements include, without limitation, any statement that may predict,
forecast, indicate or imply future results, performance or achievements, and may
contain the words "believe", "anticipate", "expect", "estimate", "project",
"will be", "will continue", "will likely result", "plan", "intend" or words or
phrases of similar meanings. These statements involve known and unknown risks
and are based upon a number of assumptions and estimates that are inherently
subject to significant uncertainties and contingencies, many of which are beyond
Golar's control. Actual results may differ materially from those expressed or
implied by such forward-looking statements. Important factors that could cause
actual results to differ materially include, but are not limited to, those
factors listed from time to time in the reports and other documents Golar files
with the United States Securities and Exchange Commission.
New factors emerge from time to time, and it is not possible for Golar to
predict all of these factors. Further, Golar cannot assess the impact of each
such factor on its business or the extent to which any factor, or combination of
factors, may cause actual results to be materially different from those
contained in any forward-looking statement. Golar does not intend to release
publicly any updates or revisions to any forward-looking statements contained
herein to reflect any change in Golar's expectations with respect thereto or any
change in events, conditions or circumstances on which any such statement is
based.
Hamilton, Bermuda
June 20, 2016
Enquiries:
Golar Management Limited: + 44 207 063 7900
Brian Tienzo
Stuart Buchanan
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Golar LNG via GlobeNewswire
[HUG#2021817]
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Source: Equities.com News
(June 20, 2016 - 4:00 AM EDT)
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