Shares of Hamilton, Bermuda, based Golar LNG Ltd. (GLNG) rose sharply on Tuesday, against the backdrop of a down day on Wall Street across the board. Golar's stock was up $7.37, rising 19.58% to close at 45.01 on volume of 11,798,015. The company announced that it has been appointed as partner with Ophire Energy Plc, to provide that company with an LNG shipping vessel in a contract that will carry a 20 year term.
Founded in 2001, Golar LNG Ltd. owns and operates liquefied natural gas carriers (LNG) and floating storage and re-gasification unit (FSRU). The company's vessel provides LNG shipping, storage and re-gasification services to the LNG industry. It develops FSRU projects based on the conversion of existing LNG Carriers. Golar's Vessel Operations segment owns and operates LNG carriers on fixed terms to customers. The Company also has a Commodity Trading segment that provides physical and financial risk management in LNG and gas markets for its customers. Golar's stock trades on the NASDAQ.
Golar announced on Tuesday that it has signed a binding Heads of Terms with Ophir Energy Plc in which Golar will provide it's GoFLNG vessel Gimi, in a 20 year tolling contract. The contract will begin in the first half of 2019. Ophir's Equatorial Guinea, Block-R upstream partner, GEPetrol has already approved the arrangement, and will formally ratify it next week.
Block R's 2.5 trillions of cubic feet (tcf) of high purity 2P gas resources, situated in an area of benign sea states, are well suited for the use of Golar's GoFLNG technology. And GEPetrol's selection of Golar to provide the Gimi, is further evidence of the technical and commercial competitiveness of GoFLNG, and the attractions of a short lead-time and lower risk implementation.
Golar, along with its partners Keppel Shipyard and Black and Veatch committed to the Gimi FLNG conversion in December 2014. At full production the vessel will have a contracted capacity of 2.2 millions of tons per annum (mtpa) of liquefied natural gas, which will be marketed by Ophir and GEPetrol. The project is expected to deliver an EBITDA for Golar in the first full year of operation in the region of about $350 million. That estimate does not include the additional earnings associated with the vessel variations to accommodate deep water production. Gimi will be Golar's second GoFLNG vessel, in addition to Hilli, which is scheduled to begin commercial operations in Cameroon during the first half of 2017.
"Golar is delighted to have secured a contract for our second GoFLNG vessel," said Golar CEO Gary Smith. "This commitment with Ophir and GEPetrol to employ a GoFLNG vessel in Equatorial Guinea represents a further step in the implementation of Golar's strategy to become the industry's leading integrated midstream LNG services provider, supporting resource owners, gas producers and gas consumers. Our new approach to developing LNG projects is stimulating significant interest today. Accordingly, Golar has now, based on its framework agreement with Keppel Shipyard, commenced negotiations for the company's third GoFLNG vessel".
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