Golar LNG Ltd. (Nasdaq:GLNG) said recent insolvency filings in British Columbia by LNG Partners LLC may impact the “execution path” for a floating liquefaction project in Kitimat’s Douglas Channel.
The project – a partnership involving the Haisla First Nation, Golar and Texas-based LNG Partners – is a proposed floating LNG liquefaction plant.
In its third quarter report, Golar said it’s “working diligently” with HN LNG Limited Partnership and other relevant stakeholders to resolve remaining commercial issues and final investment decision that will allow the project to move forward.
“The topography of the coastline in this territory is extremely well suited for floating liquefaction solutions,” the company stated.
“Golar has the unique ability to deliver a financed, complete technical solution within approximately 30 months of a full commitment being made using our recently completed front-end engineering and design (FEED), and as such we remain confident that we are very well positioned to secure the firm pipeline capacity and site access required for a successful project.”
But one of the project’s partners – LNG Partners – is facing insolvency. LNG Partners filed documents seeking a reorganization to resolve an impasse with other investors of the small-scale Douglas Channel LNG project
Golar completed its FEED study at the end of August, confirming that conversion of an existing LNG carrier into a floating storage and liquefaction vessel will take roughly 30 months from financial commitment and will be competitive with the lowest cost liquefaction solutions in the market.
Golar is now negotiating conversion and liquefaction contracts with Keppel Shipyard and topside partners with the goal of finalizing all contracts by the end of this year.
The company is currently focusing on markets in the Americas and West Africa that offer multiple opportunities to deploy a floating storage and liquefaction vessel.
“The board believes that Golar's ability to offer economic liquefaction solutions for smaller reserve sizes is unique in the industry,” the company stated.
