Golar Energy announced Thursday that it has signed a Heads of Agreement with Toyota Tsusho Corporation of Japan (Toyota Tsusho) for the sale of all of the production from the first train of Gladstone LNG.
The agreement covers the delivery of approximately 1.5 million tonnes per annum of LNG to Toyota Tsusho over a 12 year period from 2014 to 2026, with a separate build up period commencing at the end of 2012, as well as the parties' intention to discuss Toyota Tsusho's potential acquisition of a minority equity interest in the Gladstone LNG Fisherman's Landing project.
Golar Energy will provide the shipping necessary to transport the LNG from Australia to Toyota Tsusho's nominated receiving facilities. Delivery of the LNG will utilize up to two of Golar's existing LNG Carriers.
Oscar Spieler, Golar Energy's CEO commented that "We are delighted to have reached this important milestone in the development of the Gladstone LNG project. This agreement is a significant milestone for the project and we are very proud to have reached agreement with a corporation of the standing of Toyota Tsusho. We look forward to building a strong and mutually beneficial relationship with Toyota Tsusho over the life of the project.
This announcement is further evidence of the leading position of the Gladstone LNG Fisherman's Landing project in the rapidly developing LNG from Coal Seam Gas sector. The signing of the HOA significantly advances Golar Energy's strategy of building a "midstream" LNG position for the company which covers liquefaction, shipping and regasification. The Gladstone LNG project has the potential to materially enhance the earning capacity and profile of Golar Energy."
In February 2009 an HOA with the Australian listed company Liquefied Natural Gas Ltd (LNG Ltd) was signed covering the joint development of the Gladstone LNG project to produce LNG from Coal Seam Gas (CSG) in Gladstone, Australia.
The project company Gladstone LNG Pty Ltd (Gladstone LNG) is intending to develop a mid-scale (1.5 million tonne per annum per train) liquefied natural gas plant in the Port of Gladstone, Australia. The plant will purify and liquefy CSG sourced from the Arrow Energy Ltd gas fields, located in Central Queensland, north east Australia. Golar Energy and LNG Ltd have agreed to each take an equity position of 40% in the GLNG joint venture. Arrow Energy has an option to take the final 20% equity in the project. The current estimated development cost for the LNG facility is approximately USD 500 million. The CSG will be delivered by Arrow Energy to the LNG plant boundary at Gladstone. Once the CSG has been processed at the LNG plant, it will be loaded onto Golar Energy owned LNG Carriers for export markets. First production is currently scheduled for 2012. The project also offers attractive expansion opportunities.
Under the terms of the HOA signed with LNG Ltd, Golar Energy has agreed to purchase the full LNG output from the first LNG train on an FOB basis.