Bermuda-based and Nasdaq listed Golar LNG Limited (Golar) has announced the Final Investment Decision (FID) and fulfilment of all condition’s precedent for the 20-year re-deployment charter of the FLNG Hilli Episeyo (FLNG Hilli), first announced on July 5, 2024 as reported by Shipping Telegraph.

The FLNG vessel will be chartered to Southern Energy S.A. (SESA) offshore Argentina.

In addition to this charter, Golar and SESA have also signed definitive agreements for a 20-year charter for the MKII FLNG, currently under conversion at CIMC Raffles shipyard in Yantai, China.

The MKII FLNG charter remains subject to FID and the same regulatory approvals as granted to the FLNG Hilli project, expected within 2025, as Golar states.

Golar states that the two FLNG agreements are expected to add US$13.7bn in earnings backlog to Golar over 20 years, before adjustments (based on US-CPI) to the charter hire and before commodity linked tariff upside.

“For every US$ 1/mmbtu above the US$ 8/mmbtu, the total upside for Golar will be approximately US$ 100 million when both FLNGs are in operation. Subject to a 3-year notice and payment of a fee, SESA may reduce the term of the agreement to 12 years for the FLNG Hilli and to 15 years for the MKII FLNG,” Golar said in its release.

SESA is a company formed to enable LNG exports from Argentina.

SESA is owned by a consortium of leading Argentinian gas producers including Pan American Energy (30%), YPF (25%), Pampa Energia (20%) and Harbour Energy (15%), as well as Golar (10%).

Golar said the project has received the full support of the National and Provincial Governments in Argentina that granted all necessary approvals including the first ever unrestricted 30-year LNG export authorization in Argentina, plus qualification for the Incentive Regime for Large Investments (RIGI); and also provincial approval by the province of Río Negro for the offshore and onshore Environmental Impact Assessments for FLNG Hilli.

The FLNGs will be located in close proximity of each other, offshore in the Gulf of San Matias Gulf in the province of Rio Negro, Argentina.

The vessels will monetize gas from the Vaca Muerta formation, the world’s second largest shale gas resource, located onshore in the province of Neuquen, Argentina.

FLNG Hilli will initially utilize spare volumes from the existing pipeline network.

SESA intends to facilitate for a dedicated pipeline to be constructed from Vaca Muerta to the Gulf of San Matias to serve gas supply to the FLNGs.