Golar said on Monday that its FLNG Hilli Episeyo located offshore Kribi in Cameroon has started full commercial operations.
This follows the acceptance of FLNG Hilli Episeyo under its liquefaction tolling agreement with customers Perenco Cameroon and Societe Nationale Des Hydrocarbures, Golar said in a statement.
The commissioning tests included the requirement to produce a set quantity of LNG in a period of 16 days of continuous production from minimum 2 trains at a level of 7500-cbm per day on average, according to the Bermuda-based LNG shipping player.
The commercial tolling rate commencing will immediately add about $164 million in EBITDA of base tolling income per year plus an additional $45 million operating cash flow per year based on the oil price linked element of the contract, Golar said.
As a consequence of the commencement of commercial operations, Golar is now able to draw on the $960 million lease financing facility that will replace the existing loan.
It is estimated that a minimum of approximately $140 million in additional free cash will be released from this facility after meeting maximum remaining capital costs and net of minority interests, the company said.
Drop down
Following the start of operations, the process to finalise the dropdown of Golar LNG’s interest in FLNG Hilli Episeyo to Golar LNG Partners has commenced.
Once the dropdown is complete, 50 percent of the currently committed earnings from FLNG Hilli Episeyo will accrue to Golar LNG Partners.
To remind, the FLNG Hilli Episeyo was converted from a 1975 built Moss LNG carrier with a storage capacity of 125,000 cubic meters by Keppel of Singapore.
It is the world’s first converted LNG carrier to a floating LNG producer.
The commencement of commercial operations of Hilli Episeyo took place in less than 4 years after speculative contracts were signed with Keppel Shipyard, according to Golar.
The project cost is expected to be approximately $70 million under budget, the company added.