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BP plc (BP - Free Report) , the UK supermajor, and Bermuda-based Golar LNG have successfully settled a payment dispute related to the Floating Liquefied Natural Gas (“FLNG”) unit, Gimi, which is set to operate at the Greater Tortue Ahmeyim (“GTA”) gas project off the coasts of Mauritania and Senegal. The agreement involves a commercial reset that simplifies contractual cash flows and resolves previous disagreements concerning payment mechanisms for pre-commercial operations.
New Payment Structure and Milestone-Based Bonuses
As part of the reset, BP and Golar LNG have established an updated schedule of daily payments leading up to the commercial operations date (COD), with step-up mechanisms based on achieving specific project milestones. Additionally, Golar LNG will receive lump sum bonus payments, contingent upon reaching these milestones. The pre-COD cash flows are expected to be deferred and amortized over the 20-year contract term from COD, further aligning the interests of both parties.
Accelerated Commissioning to Expedite First Gas
To expedite the project timeline, BP and Golar LNG have agreed to commence the commissioning of FLNG Gimi using an LNG cargo before the availability of gas from the Floating Production Storage and Offloading (FPSO) unit. This approach is intended to shorten the time to COD and facilitate a smoother transition to full operational status.
Progress on the GTA Project and Outlook
The Greater Tortue Ahmeyim project, which boasts the deepest subsea infrastructure in Africa with wells in water depths of up to 2,850 meters, continues to make significant progress. Kosmos Energy, BP’s partner in the project, reported that the drilling of the first batch of four wells has been completed, and the hub terminal has been handed over to operations. Final subsea connection work is ongoing, with mechanical completion for the first gas expected this month.
Additionally, the FPSO Tortue, which completed its journey to the project site after a series of inspections and repairs, has seen all risers installed. However, commissioning operations are underway. Handover to operations is targeted for September, with the first gas expected shortly thereafter.
The resolution of the payment dispute and the ongoing progress of the Greater Tortue Ahmeyim project demonstrate BP and Golar LNG's commitment to advancing one of Africa’s most ambitious LNG developments.
Investors interested in the energy sector may look at some other stocks like SM EnergyCompany (SM - Free Report) , Northern Oil and Gas, Inc. (NOG - Free Report) and The Williams Companies, Inc. (WMB - Free Report) .
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
Northern Oil and Gas’ core operations are focused on three leading basins of the United States — the Williston, Permian and the Appalachian. The upstream operator uses a unique nonoperating business model, which helps it to lower costs and increase cash flow.
The Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.
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BP, Golar LNG Settle Payment Dispute & Expedite FLNG Operations
BP plc (BP - Free Report) , the UK supermajor, and Bermuda-based Golar LNG have successfully settled a payment dispute related to the Floating Liquefied Natural Gas (“FLNG”) unit, Gimi, which is set to operate at the Greater Tortue Ahmeyim (“GTA”) gas project off the coasts of Mauritania and Senegal. The agreement involves a commercial reset that simplifies contractual cash flows and resolves previous disagreements concerning payment mechanisms for pre-commercial operations.
New Payment Structure and Milestone-Based Bonuses
As part of the reset, BP and Golar LNG have established an updated schedule of daily payments leading up to the commercial operations date (COD), with step-up mechanisms based on achieving specific project milestones. Additionally, Golar LNG will receive lump sum bonus payments, contingent upon reaching these milestones. The pre-COD cash flows are expected to be deferred and amortized over the 20-year contract term from COD, further aligning the interests of both parties.
Accelerated Commissioning to Expedite First Gas
To expedite the project timeline, BP and Golar LNG have agreed to commence the commissioning of FLNG Gimi using an LNG cargo before the availability of gas from the Floating Production Storage and Offloading (FPSO) unit. This approach is intended to shorten the time to COD and facilitate a smoother transition to full operational status.
Progress on the GTA Project and Outlook
The Greater Tortue Ahmeyim project, which boasts the deepest subsea infrastructure in Africa with wells in water depths of up to 2,850 meters, continues to make significant progress. Kosmos Energy, BP’s partner in the project, reported that the drilling of the first batch of four wells has been completed, and the hub terminal has been handed over to operations. Final subsea connection work is ongoing, with mechanical completion for the first gas expected this month.
Additionally, the FPSO Tortue, which completed its journey to the project site after a series of inspections and repairs, has seen all risers installed. However, commissioning operations are underway. Handover to operations is targeted for September, with the first gas expected shortly thereafter.
The resolution of the payment dispute and the ongoing progress of the Greater Tortue Ahmeyim project demonstrate BP and Golar LNG's commitment to advancing one of Africa’s most ambitious LNG developments.
Investors interested in the energy sector may look at some other stocks like SM Energy Company (SM - Free Report) , Northern Oil and Gas, Inc. (NOG - Free Report) and The Williams Companies, Inc. (WMB - Free Report) .
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
Northern Oil and Gas’ core operations are focused on three leading basins of the United States — the Williston, Permian and the Appalachian. The upstream operator uses a unique nonoperating business model, which helps it to lower costs and increase cash flow.
The Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.