Golar and bp enter into commercial reset arrangements for FLNG Gimi
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
Golar LNG e bp hanno firmato accordi per un ripristino commerciale del FLNG Gimi, parte del Progetto LNG Greater Tortue-Ahmeyim. Il ripristino semplifica i flussi di cassa contrattuali e risolve le controversie precedenti relative ai pagamenti delle operazioni pre-commerciali (Pre-COD). Gli aspetti chiave includono:
1. Programma aggiornato dei pagamenti giornalieri fino alla Data di Operazioni Commerciali (COD)
2. Meccanismi di aumento basati sulle tappe del progetto
3. Pagamenti garantiti da date di lungo stop
4. Possibili pagamenti bonus forfettari per il raggiungimento delle tappe
5. I flussi di cassa Pre-COD saranno posticipati e ammortizzati nel corso del contratto di 20 anni
6. Risoluzione di tutte le controversie in corso, inclusa l'arbitrato
7. Accordo per iniziare la messa in servizio del FLNG Gimi con carico di LNG prima della disponibilità di gas FPSO
Golar LNG y bp han ejecutado acuerdos para un reinicio comercial del FLNG Gimi, parte del Proyecto LNG Greater Tortue-Ahmeyim. El reinicio sencilla los flujos de efectivo contractuales y resuelve disputas previas relacionadas con los pagos de las operaciones pre-comerciales (Pre-COD). Los aspectos clave incluyen:
1. Programa actualizado de pagos diarios hasta la Fecha de Operaciones Comerciales (COD)
2. Mecanismos de escalamiento basados en hitos del proyecto
3. Pagos asegurados por fechas de largo plazo
4. Posibles pagos de bonificación a suma global por alcanzar hitos
5. Los flujos de efectivo Pre-COD se aplazarán y amortizarán durante un plazo de contrato de 20 años
6. Liquidación de todas las disputas en curso, incluida la arbitraje
7. Acuerdo para comenzar la puesta en marcha del FLNG Gimi con carga de LNG antes de la disponibilidad de gas FPSO
Golar LNG와 bp는 Greater Tortue-Ahmeyim LNG 프로젝트의 일환으로 FLNG Gimi의 상업적 리셋을 위한 계약을 체결했습니다. 이 리셋은 계약상 현금 흐름을 단순화하고 사전 상업 운영 날짜(Pre-COD) 관련 이전 분쟁을 해결합니다. 주요 사항은 다음과 같습니다:
1. 상업 운영 날짜(COD)까지의 일일 지급 일정 업데이트
2. 프로젝트 이정표에 따라 조정되는 단계적 증가 메커니즘
3. 긴 멈춤 날짜에 의해 보장된 지급
4. 이정표 달성을 위한 잠재적 일시금 보너스 지급
5. Pre-COD 현금 흐름은 20년 계약 기간 동안 연기 및 상환됩니다.
6. 중재를 포함한 모든 현재 분쟁의 해결
7. FPSO 가스 가용성 이전에 LNG 화물로 FLNG Gimi 커미셔닝 시작 동의
Golar LNG et bp ont conclu des accords pour un réajustement commercial du FLNG Gimi, qui fait partie du projet LNG Greater Tortue-Ahmeyim. Le réajustement s'implique simplification des flux de trésorerie contractuels et règlement des litiges antérieurs liés aux paiements d'opérations pré-commerciales (Pre-COD). Les points clés comprennent :
1. Calendrier mis à jour des paiements quotidiens jusqu'à la date de mise en service commerciale (COD)
2. Mécanismes d'augmentation basés sur les jalons du projet
3. Paiements garantis par des dates d'arrêt prolongées
4. Potentiels paiements forfaitaires de bonus pour l'atteinte des jalons
5. Les flux de trésorerie Pre-COD seront reportés et amortis sur une durée de contrat de 20 ans
6. Règlement de tous les litiges en cours, y compris l'arbitrage
7. Accord pour commencer la mise en service du FLNG Gimi avec une cargaison de LNG avant la disponibilité de gaz FPSO
Golar LNG und bp haben Vereinbarungen für einen kommerziellen Reset des FLNG Gimi getroffen, der Teil des Greater Tortue-Ahmeyim LNG-Projekts ist. Der Reset vereinfacht vertragliche Zahlungsströme und beilegt frühere Streitigkeiten, die mit Zahlungen vor dem kommerziellen Betriebsdatum (Pre-COD) verbunden sind. Zu den wichtigsten Aspekten gehören:
1. Aktualisierter Zeitplan für tägliche Zahlungen bis zum Datum der kommerziellen Betriebsaufnahme (COD)
2. Steigerungsmechanismen basierend auf Projektmeilensteinen
3. Zahlungen, die durch lange Stoppdaten gesichert sind
4. Potenzielle Pauschalbonuszahlungen für das Erreichen von Meilensteinen
5. Pre-COD-Zahlungsströme werden über die Vertragslaufzeit von 20 Jahren aufgeschoben und amortisiert
6. Beilegung aller laufenden Streitigkeiten, einschließlich Schiedsverfahren
7. Vereinbarung, mit LNG-Ladung vor der Gasverfügbarkeit der FPSO mit der Inbetriebnahme des FLNG Gimi zu beginnen
- 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
- Pre-COD cash flows to be deferred on balance sheet
- Amortization of Pre-COD cash flows over 20-year contract term
Insights
The commercial reset between Golar LNG and bp for FLNG Gimi is a significant development with positive implications. This agreement resolves ongoing disputes and streamlines the project's financial structure. Key points include:
- Simplified contractual cash flows with updated daily payments until COD
- Potential bonus payments tied to project milestones
- Resolution of arbitration process, reducing legal risks
- Accelerated commissioning process using an LNG cargo
Financially, this reset improves cash flow visibility and potentially accelerates revenue recognition. The
This commercial reset marks a crucial turning point for the Greater Tortue-Ahmeyim LNG Project. By agreeing to commission FLNG Gimi with an LNG cargo before gas availability from the FPSO, the parties demonstrate a commitment to expediting the project timeline. This approach could potentially:
- Accelerate the learning curve for operators
- Identify and address technical issues earlier
- Reduce overall time to full operational capacity
The agreement also signals strong collaboration between Golar and bp, which is essential for complex offshore LNG projects. The resolution of disputes and realignment towards COD suggests improved project management and reduced operational risks. This reset could serve as a model for other FLNG projects facing similar challenges in the industry.
The commercial reset agreement between Golar and bp represents a significant legal milestone. Key legal implications include:
- Resolution of ongoing arbitration, avoiding protracted legal battles
- Establishment of clear payment mechanisms with secured long stop dates
- Potential reduction in future contractual disputes due to simplified cash flows
The agreement's structure, including step-up mechanisms and bonus payments, demonstrates a balanced approach to risk allocation between parties. The deferral of Pre-COD cash flows on the balance sheet aligns with accounting principles while maintaining the project's economic substance. This reset effectively mitigates legal risks and creates a more stable foundation for the 20-year contract term, potentially reducing the likelihood of future legal challenges.
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?
How does the new agreement affect GLNG's pre-COD cash flows?
What disputes were settled in the commercial reset between Golar LNG and bp?
How will the commissioning of FLNG Gimi be expedited according to the new agreement?
