Golar LNG Profile
Golar LNG Limited (Golar) designs, builds, owns, and operates marine infrastructure for the liquefaction and regasification of liquefied natural gas (LNG).
As of December 31, 2022, the company’s fleet was consisted of two LNG carriers (of which one vessel is contracted for conversion to a Floating Storage Regasification Unit (FSRU) subject to receipt of notice to proceed and subsequent sale, the Golar Arctic) and two FLNGs (the Hilli Episeyo (the FLNG Hilli), which is operational and the Gimi, which is under conversion to a FLNG).
The company’s operations have evolved from LNG shipping, floating regasification and combined cycle gas fired power plants to its current focus on floating liquefaction operations.
Golar Partners and Hygo: In April 2021, the company completed the disposals of its investments in Golar Partners and Hygo to NFE.
CoolCo and Golar Tundra: From March to June 2022, the company completed the disposals of most of its LNG carriers and its FSRU (namely the Golar Seal, Golar Crystal, Golar Bear, Golar Frost, Golar Glacier, Golar Snow, Golar Kelvin, Golar Ice and Golar Tundra).
The company offers gas resource holders a proven, quick and low-cost delivering solution to monetize stranded gas reserves. The company’s industry leading FLNG operational track record and offering allow gas resource holders, developers and customers a quick-delivering solution for natural gas liquefaction. The company is the only proven company to deliver FLNG as a service to gas resource owners. As of March 17, 2023, the company’s fleet consisted of two LNG carriers (one, the Golar Arctic, is contracted for conversion to a FSRU for subsequent sale, subject to receipt of a notice to proceed and the Gandria) and two FLNGs (the operational FLNG Hilli and the Gimi, which is under conversion to a FLNG).
Strategy
The company’s strategy is to provide market leading FLNG operations and focus its balance sheet flexibility to maximize shareholder returns through attractive FLNG projects.
Segments
The company operates through three segments: FLNG, Corporate and other and Shipping.
FLNG
This segment includes the company’s operations of FLNG vessels or projects. The company converts LNG carriers into FLNG vessels or build new FLNG vessels and subsequently contract them out to customers. The company has one operational FLNG, the FLNG Hilli, and one undergoing conversion into a FLNG, the Gimi.
Corporate and Other
This segment includes the company’s vessel management, FSRU services for third parties, administrative services to affiliates and third parties.
Shipping
This segment includes the company’s operations of the transportation of LNG carriers. The company has historically operated and subsequently chartered out LNG carriers on fixed terms to charterers.
FLNG Hilli
The FLNG Hilli conversion was completed in the shipyard in October 2017. Pursuant to the LTA, FLNG Hilli's contracted annual liquefaction capacity is 1.2 million tons (mtpa). In 2021, the company entered into LTA Amendment 3 with its Customer, which includes a 0.2 mtpa capacity increase for the 2022 contract year, and an option for additional capacity of up to 0.4 mtpa for the 2023 contract year to the end of the LTA term (of which the Customer exercised 0.2 mtpa in July 2022), which resulted in an increase in the utilization of FLNG Hilli to 1.4 million tons per annum from January 2022 to the end of the LTA in July 2026. In contract year 2022, the FLNG Hilli was underutilized and produced 96.5% of the 1.4 mtpa annual contracted capacity.
In February 2023, the company agreed to acquire NFE's 50% interest in the common units of Hilli LLC, which owns the FLNG Hilli, in exchange for $100.0 million cash and its remaining holdings of 4.1 million NFE Shares. As of March 17, 2023, FLNG Hilli offloaded a total of 89 LNG cargoes and had produced around 6.1 million tonnes of LNG since the start of operations.
Gimi
In February 2019, the company entered into the LOA (which was subsequently amended and restated in September 2021) with BP, Gimi MS Corporation (Gimi MS) and its subsidiary Golar MS Operator S.A.R.L in connection with the conversion of Gimi from a LNG carrier to a FLNG in connection with the first phase of the GTA Project situated off the coast of Mauritania and Senegal. FLNG Gimi is designed to produce approximately 2.7 mtpa, with the total gas resources in the field estimated to be around 15 trillion cubic feet.
The LOA provides for the construction and conversion of Gimi to a floating liquefaction natural gas vessel (FLNG), transit, mooring and connection to BP’s project infrastructure, commissioning with BP’s upstream facilities, including its floating production, storage and offloading unit (FPSO), completing specified acceptance tests, followed by COD. Following commercial operations (COD), the company will operate and maintain FLNG Gimi and make her capacity exclusively available for the liquefaction of natural gas from the GTA Project and offloading of LNG produced for a period of twenty years.
As of March 17, 2023, the Gimi conversion is 92.5% technically complete.
Future FLNG Projects
The company actively works to develop FLNG projects around the globe. The company’s FLNG projects under development broadly fall into one of three commercial categories: tolling, gas sale and purchase (GSA) and integrated projects. Tolling projects are the company’s business, with both FLNG Hilli and Gimi under long term charter agreements where it is a FLNG service provider and not the owner of hydrocarbons. The company has developed three FLNG designs, i.e. the Mark I, Mark II and Mark III.
Mark I
The FLNG Hilli and FLNG Gimi are both Mark I FLNGs. Mark I has a nameplate capacity of up to 2.7 mtpa and is based on the conversion of a Moss type LNG carrier. Sponsons that create the necessary deck space to house the liquefaction and gas processing topside equipment must first be built and added to either side of the LNG carrier before the topside equipment can then be installed. Conversion, delivery and commissioning of the FLNG typically takes between three to four years. As of December 31, 2022, the company had been successful in executing its Mark I program together with contractors, Keppel Shipyard and Black & Veatch which delivered the FLNG Hilli in 2018 and is constructing the FLNG Gimi.
Mark II
This FLNG design has a nameplate capacity of up to 3.5 mtpa and is also based on the conversion of a Moss type LNG carrier. The Mark II design involves the construction of a new mid-ship section containing the liquefaction equipment that can be inserted between the two sections of the Moss type vessel that has been ‘cut in half’. The higher maximum nameplate capacity is possible as the mid-ship section also allows for a more efficient configuration of the liquefaction equipment. This modularized approach to the conversion project reduces the time required for conversion, delivery and commissioning of the Mark II FLNG design compared to the company’s other two FLNG designs. In addition, this approach increases the number of shipyards and fabricators that are capable of executing the work.
Mark III
Targeting large field developments and representing a competitive alternative to land-based LNG projects, this FLNG design has a larger nameplate capacity of up to 5.0 mtpa, more storage than a Mark I or Mark II design, and is a newbuild hull that does not involve the conversion of an existing Moss type LNG carrier. Construction, delivery and commissioning of the FLNG is expected to take around four years.
As of December 31, 2022, the company had entered into contracts for engineering services, multiple long lead items and secured an option to acquire a suitable LNG carrier for 3.5 mtpa future Mark II FLNG conversion.
Investments
Avenir
Avenir is a joint investment with Stolt-Nielsen Ltd, Höegh LNG Holdings Limited and the company for the pursuit of opportunities in small-scale LNG, including the delivery of LNG to areas of stranded gas demand and the development of LNG bunkering services and supply to the transportation sector. Avenir has five small-scale LNG carriers and an LNG terminal and distribution facility in the Italian port of Oristano, Sardinia.
NFE
On March 15, 2023, the company acquired NFE's 50% interest in the common units of Hilli LLC.
CoolCo
In February 2023, the company divested its CoolCo investment by selling its remaining CoolCo shares.
Environmental and Other Regulations
Commencing in July 2022, the company began outsourcing the technical management services for its LNG carriers to CoolCo which is certified in accordance with the IMO standard for International Safety Management (ISM) and operates in compliance with the International Standards Organization (the ISO) Environmental Management Standard for the management of significant environmental aspects associated with the ownership and operation of the company’s LNG carriers. The company’s wholly owned subsidiary, Golar Management AS, also provides these services for FLNG Hilli.
The company’s ship manager holds a document of compliance under the ISM Code for operation of Gas Carriers. Each of the company’s vessels is in compliance with the IGC Code and each of its conversion contracts requires that the vessel receive certification that it is in compliance with applicable regulations before it is delivered.
The SOLAS and other IMO regulations concerning safety, including those relating to treaties on training of shipboard personnel, lifesaving appliances, radio equipment and the global maritime distress and safety system, are applicable to the company’s operations. Flag states that have ratified the SOLAS and STCW generally employ the classification societies, which have incorporated the SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.
In addition, all of the company’s trading vessels have been certified to meet the ISPS Code and the security requirements of the SOLAS and the Maritime Transportation Security Act (MTSA). All the company’s vessels delivered or drydocked since May 19, 2005 have been issued IAPP Certificates. The company’s vessels are subject to the IMO’s International Convention on the Control of Harmful Anti-fouling Systems on Ships, or the Anti-fouling Convention, which prohibits the use of organotin compound coatings in anti-fouling systems. The company has obtained Anti-fouling System Certificates for all of its trading vessels.
The company is in substantial compliance with the U.S. Oil Pollution Act of 1990 (OPA), the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and all applicable state regulations in the ports where its vessels call. Each of the company’s ship owning subsidiaries and affiliates that has vessels trading in the U.S. waters has applied for and obtained from the USCG National Pollution Funds Center three-year certificates of financial responsibility, or COFRs, supported by guarantees purchased from an insurance based provider. The company will be able to continue to obtain the requisite guarantees and that it will continue to be granted COFRs from the USCG for each of its vessels that is required to have one.
All of the company’s trading vessels have received Blue Cards from their P&I club and are in possession of a Civil Liability Convention (CLC) State-issued certificate attesting that the required insurance cover is in force. The company’s vessels are in substantial compliance with and are certified to meet MLC 2006. Regarding the company’s own operations, the EPA enforces both the CAA and the international standards found in Annex VI of MARPOL concerning marine diesel emissions, and the sulfur content found in marine fuel. Other federal and state regulations relating to the control of greenhouse gas emissions may follow, including climate change initiatives that have been considered in the U.S. Congress. Notably, the U.S. rejoined the Paris Agreement in February 2021, and, in April 2021, announced a new, more rigorous nationally determined emissions reduction level of 50-52% reduction from 2005 levels in economy-wide net GHG emissions by 2030. At the international level, at COP 26, the U.S. and E.U. jointly announced the launch of the Global Methane Pledge, an initiative committing to a collective goal of reducing global methane emissions by at least 30% from 2020 levels by 2030, including all feasible reductions in the energy sector. The company’s vessels may also become subject to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, or HNS, adopted in 1996, the HNS Convention, and subsequently amended by the April 2010 Protocol.
History
Golar LNG Limited was founded in 1946. The company was incorporated as an exempted company under the Bermuda Companies Act of 1981 in the Islands of Bermuda in 2001.
