Page 10 - GLNG Week 28

GLNG COMMENTARY GLNG
potentially making them more hesitant to com- mit to new contracts.
Among those calling for more exible terms for buyers is Japan’s JERA – the country’s largest buyer of LNG.
“Long-term SPAs [sales and purchase agree- ments] with rigid terms are no longer suitable for a rapidly changing market,” a JERA senior executive o cer, Hitoshi Nishizawa, said at the CWC Japan LNG virtual summit last week. He went on to call for more consideration around exibility, tradeability and price creativity as new contracts are negotiated.
What next?
Indeed, some buyers may be closing in on supply deals with more favourable terms. In late June, India’s Petronet LNG said it was close to nal- ising a 1mn tonne per year (tpy) supply deal at a price near spot rates. No further details have been provided as yet, though the company has been reported to be seeking supplies of LNG for a 10-year period starting in 2024, and is said to
have received 13 o ers.
is comes a er a memorandum of under-
standing (MoU) between Petronet and US-based Tellurian expired in June, throwing the latter’s proposed Driftwood LNG export project in Louisiana into doubt. Petronet also pushed to renegotiate the price of LNG it buys from Qatar earlier this year. Initially, these e orts had been rebu ed by Qatar, but this was before COVID-19 hit the LNG market.
In late May, Qatar reversed its position, saying it was ready to enter into discussions to poten- tially renegotiate the price associated with its supply agreement with India.
While nothing has yet been nalised yet, the progress made by Petronet illustrates how cur- rent market conditions are favouring buyers. A successful price renegotiation – or new deal – could encourage other buyers to ght harder to obtain more favourable terms. And given the levels of competition in the market currently, other sellers may also be more willing than before to o er greater exibility.™
AFRICA
Golar LNG’s FLNG vessel loads 40th cargo offshore Cameroon
PROJECTS & COMPANIES
BERMUDA-BASED Golar LNG has reported that the Hilli Episeyo, the rst vessel in the world to be converted to a oating LNG (FLNG) unit, has reached the milestone of li ing its 40th cargo o shore Cameroon.
According to the company, the FLNG n- ished loading its latest cargo on June 18. e shipment went to Russia’s Gazprom, which is the off-taker of LNG from the facility under an eight-year agreement that is due to expire in 2026.
e Hilli Episeyo was converted to liquefy gas from the Sanaga eld, which is being developed by Perenco (UK/France) and Société Nation- ale des Hydrocarbures (SNH), the national oil company (NOC) of Cameroon. e partners send gas from the eld to an onshore treatment facility for processing before delivering it to the FLNG unit.
The vessel began producing LNG in May 2018 and has been turning out 1.2mn tonnes per year (tpy) from one of its two production trains. To date, it has maintained 100% up-time and has produced more than 2.5mn tonnes of LNG. It has loaded 11 of its 40 cargoes onto tankers owned by Golar LNG – namely, the Golar Maria, the Golar Viking and the Nanook.
e vessel could eventually see output double to 2.4mn tpy, as Golar LNG has held talks with
Perenco and SNH on the possibility of activating the Hilli Episeyo’s second production train. is is not likely to happen in the near future, though, as the coronavirus (COVID-19) pandemic has reduced global fuel demand.
e FLNG is operating under a tolling agree- ment. It generates about $40mn per quarter in tolling revenues, with Golar LNG receiving 50% of the total and its NASDAQ-listed a liate Golar LNG Partners receiving the other 50%, in line with the terms of a drop-down deal nalised in 2018.
e Hilli Episeyo began its life as one of Golar LNG’s 125,000-cubic metre tankers. It was con- verted to an FLNG unit at the Keppel shipyards in Singapore at a cost of $1.2bn.™
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w w w . N E W S B A S E . c o m Week 28 17•July•2020