Golar LNG Secures Multibillion-Dollar Contracts for Argentina LNG Project

Bermuda-headquartered owner and operator of liquefied natural gas (LNG) midstream infrastructure Golar LNG has landed two major assignments related to Argentina’s proposed liquefied natural gas (LNG) large-scale upstream and midstream integrated gas development project in Sierra Grande Norte, on the country’s Atlantic coast, estimated to be worth $50 billion.

Golar LNG has recently announced the final investment decision (FID) and completion of all conditions precedent for the 20-year re-deployment charter of the floating LNG (FLNG) Hilli Episeyo, also known as the FLNG Hilli. This vessel will be deployed off the coast of Argentina and chartered to Southern Energy S.A. (SESA), a company formed to enable LNG exports from Argentina.

Additionally, Golar LNG has signed definitive agreements for a 20-year charter for the MKII FLNG with SESA, which is owned by a consortium of leading Argentinian gas producers, including Pan American Energy, YPF, Pampa Energia, Harbour Energy, and Golar. The MKII FLNG is currently under conversion at CIMC Raffles shipyard in Yantai, China.

These charters are subject to FID and regulatory approvals, with the FLNG Hilli expected to start operations in 2027 and the MKII FLNG in 2028. The total earnings backlog for Golar from these agreements is estimated to be $13.7 billion over 20 years.

SESA has the option to reduce the charter term, and Golar has implemented mechanisms for adjusting charter hire based on gas prices. The FLNGs will be located offshore in the Gulf of San Matias in the province of Rio Negro, Argentina, to monetize gas from the Vaca Muerta formation.

Karl Fredrik Staubo, Golar’s CEO, expressed excitement about partnering with Argentina’s leading gas producers to establish the country as an LNG exporter. He highlighted the project’s potential to provide reliable LNG supplies and contribute significantly to Argentina’s economy.

The Argentina LNG project has received support from national and provincial governments, including necessary approvals for LNG export, incentive regimes, and environmental impact assessments. The project aims to leverage the vast gas resources of the Vaca Muerta formation, one of the world’s largest shale gas reserves.

With operational efficiencies and synergies from two FLNGs in the same area, the Argentina LNG project is poised for success. Golar’s FLNG agreements come amidst growing interest in the project, with Eni and YPF also exploring potential partnerships.