Southern Energy Finalizes Investment Decision for Golar LNG’s MK II FLNG

Floating liquefied natural gas (FLNG) specialist Golar LNG has announced that Southern Energy has reached a final investment decision for the charter of Golar’s 3.5 mtpa MK II FLNG.

This firms up the agreement signed by the two companies in May this year. The unit will be chartered for 20 years, with a price tag of $400m per year to Golar, plus a commodity-linked tariff component of 25% of FOB prices over $8 per mmbtu.

The FLNG, currently under conversion in China, will sail to Argentina following redelivery. The contract start-up is expected in 2028.

The MKII FLNG will be moored in the San Matías Gulf near the FLNG Hilli, which is expected to start its 20-year charter with Southern Energy in 2027. Combined, the two units have a nameplate capacity of 5.95 mtpa.

Southern Energy is owned by a consortium of gas producers in Argentina including Pan American Energy, YPF, Pampa Energia, and Harbour Energy. Golar also has a 10% stake in the company.

“[Today’s] FID solidifies $8bn of net earnings visibility over 20 years to Golar, with attractive upside potential in the FLNG commodity tariff component and through our shareholding in Southern Energy,” said Karl Fredrik Staubo, Golar CEO.