Golar and bp enter into commercial reset arrangements for FLNG Gimi

Rhea-AI Summary

Golar LNG and bp have executed agreements for a commercial reset of FLNG Gimi, part of the Greater Tortue-Ahmeyim LNG Project. The reset simplifies contractual cash flows and settles previous disputes related to pre-commercial operations date (Pre-COD) payments. Key aspects include:

1. Updated schedule of daily payments until Commercial Operations Date (COD)
2. Step-up mechanisms based on project milestones
3. Payments secured by long stop dates
4. Potential lump sum bonus payments for achieving milestones
5. Pre-COD cash flows to be deferred and amortized over 20-year contract term
6. Settlement of all ongoing disputes, including arbitration
7. Agreement to start FLNG Gimi commissioning with LNG cargo before FPSO gas availability

Positive

• Settlement of ongoing disputes and arbitration process
• Simplified contractual cash flows
• Potential for lump sum bonus payments tied to project milestones
• Secured daily payments with step-up mechanisms
• Agreement to expedite commissioning process

Negative

• Pre-COD cash flows to be deferred on balance sheet
• Amortization of Pre-COD cash flows over 20-year contract term

Golar LNG Ltd. (“Golar”), and bp, as Operator of the Greater Tortue-Ahmeyim LNG Project, have executed agreements to implement a commercial reset for FLNG Gimi. The commercial reset agreement simplifies contractual cash flows and settles previous disputes related to payment mechanisms for pre-commercial operations date (“Pre-COD”) contractual cash flows. Golar and bp have agreed an updated schedule of daily payments until the Commercial Operations Date (“COD”). The daily payments have step-up mechanisms based on project milestones up to COD and are secured by long stop dates. Golar will also be entitled to certain lump sum bonus payments subject to achievement of certain project milestones. These Pre-COD cash flows are expected to be deferred on the balance sheet and amortized over the 20-year contract term from COD.

The commercial reset settles all ongoing disputes including the current arbitration process and re-aligns the parties towards reaching COD.

To shorten the time to COD the parties have also agreed to start the commissioning of FLNG Gimi with an LNG cargo prior to the availability of gas from the FPSO. 

Forward-Looking Statements

This press release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended).  All statements, other than statements of historical facts, that address activities and events that will, should, could or may occur in the future are forward-looking statements. Words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,” “forecast,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue,” or the negative of these terms and similar expressions are intended to identify such forward-looking statements. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Golar LNG Limited undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise, unless required by applicable law.

Hamilton, Bermuda

August 5, 2024

Investor Questions: +44 207 063 7900

Karl Fredrik Staubo - CEO

Eduardo Maranhão - CFO

Stuart Buchanan - Head of Investor Relations

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

FAQ

What is the commercial reset agreement between Golar LNG and bp for FLNG Gimi?

The commercial reset agreement between Golar LNG (GLNG) and bp simplifies contractual cash flows, settles previous disputes, and establishes an updated schedule of daily payments until the Commercial Operations Date (COD) for FLNG Gimi in the Greater Tortue-Ahmeyim LNG Project.

How does the new agreement affect GLNG's pre-COD cash flows?

The pre-COD cash flows for GLNG are expected to be deferred on the balance sheet and amortized over the 20-year contract term from the Commercial Operations Date (COD).

What disputes were settled in the commercial reset between Golar LNG and bp?

The commercial reset settles all ongoing disputes, including the current arbitration process, related to payment mechanisms for pre-commercial operations date (Pre-COD) contractual cash flows for FLNG Gimi.

How will the commissioning of FLNG Gimi be expedited according to the new agreement?

To shorten the time to COD, Golar LNG (GLNG) and bp have agreed to start the commissioning of FLNG Gimi with an LNG cargo prior to the availability of gas from the FPSO.