Golar LNG has struck a deal to acquire New Fortress Energy’s (NFE) stake in the Hilli floating LNG (FLNG) project.
Golar will transfer its 4.1 million shares in NFE and pay $100 million in cash. In return, it will receive a 50% stake in Trains 1 and 2 of the Hilli. Once the deal closes, Golar will have no further equity interest in NFE.
The deal will increase Golar’s cash flow generation from Hilli, until the current contract ends in July 2026. The deal is expected to close in the first quarter of 2023.
Simplification
“Improved market fundamentals for liquefaction capacity and Hilli’s market leading operational track record supports increased utilization and earnings potential of Hilli upon re-contracting,” said Golar CEO Karl Fredrik Staubo. “The transaction continues our company simplification, reducing our investments in listed securities whilst unifying the ownership of the FLNG Hilli.”
The Golar executive said the company looked forward to NFE’s “continued contribution to expanding the global LNG market through technical solutions complementary to Golar’s business”.
Golar is also taking over $323 million in debt obligations linked to Hilli.
NFE CEO and chairman Wes Edens said the deal would allow the company to “focus solely on our own FLNG portfolio that we own 100%”.
The deal buys back NFE stock at an attractive valuation, he continued. Edens welcomed the collaboration with Golar “as we continue to advance NFE’s mission to bring more affordable, reliable and cleaner energy to customers around the world”.
The Hilli vessel, offshore Cameroon, can produce 2.4 million tonnes per year of liquefaction capacity. Perenco and Cameroon’s state-owned Société Nationale des Hydrocarbures (SNH) export gas via the facility.
In its most recent results, Golar said it expected production at the Hilli to not exceed 1.4mn tonnes of LNG.