Golar Power inks Brazilian FSRU MoU with Norsk Hydro
Golar Power has executed a memorandum of understanding with Norsk Hydro to develop the first LNG terminal in the North of Brazil.
According to Golar Power, a joint venture between Golar LNG and Stonepeak Infrastructure Partners, this is a major step towards one of the largest greenhouse gas reduction initiatives, globally.
The project will enable the supply of LNG to Norsk Hydro’s Alunorte refinery plant. The facility is located close to the Vila do Conde Port in the Municipality of Barcarena, State of Pará, Brazil.
Alunorte will also be the first operational customer for the Barcarena FSRU. Golar Power said it plans to bring the FSRU into operation during the first half of 2022.
Concluding final agreements with Norsk Hydro will, therefore, be an important step toward a final investment decision. The decision is planned within the next 4 to 6 months, Golar Power said in its statement.
The LNG terminal aims to supply gas to Alunorte and to the Centrais Elétricas Barcarena 605 MW thermal power plant. It is a unit of Golar Power, previously contracted under a 25-year PPA.
Once the terminal becomes operational, Golar Power also expects to operate an LNG distribution network. This LNG supply chain will cover an area larger than Eastern Europe. It will consist of thousands of kilometres of river and road transportation systems. Golar also said it will be serving numerous industrial, commercial, and transportation customers, Golar said.
Norsk Hydro’s natural gas-based energy commitment
In 2017, Norsk Hydro committed to pursue a natural gas-based energy solution for one of the world’s largest aluminium plants. The project will enable the use of natural gas, reducing annual greenhouse gas and particulate emissions substantially.
Golar Power CEO, Eduardo Antonello, said the terminal would replace 1.8 million tons of LNG equivalents per annum of LPG, diesel, fuel oil, and coal. This will create the foundation for a broader transition away from carbon-intensive energy sources in the region.
“The reduction in LNG prices we have seen in recent years has significantly increased LNGs relative competitive position, not only versus diesel and fuel oil, but also now coal. The Norsk Hydro project illustrates the economic and environmental benefits which can be achieved by global industry and mining companies by transitioning their energy sourcing to LNG,” said Antonello.
The planned transition from heavy fuel oil to LNG will underpin the long-term future of the Alunorte facility. Golar also sees it as a springboard for the rapid start-up of small-scale LNG distribution operations.