Golar LNG Limited has announced that it has entered into a firm contract to build four 160,000 m3 LNG carrriers with the Korean shipbuilder Samsung Heavy Industries Co Ltd (“Samsung”). The newbuilding contracts were originally entered into by Companies affiliated with Golar’s largest shareholder World Shipholding. Golar has acquired the newbuilding contracts from the affiliated party based on the original contracting terms.
Three vessels are to be delivered in 2013 and one in early 2014. The total cost of the four vessels is approximately $800 million. In addition Golar has an option to acquire further four vessels for delivery in 2013 and onwards.
Golar has options to include ice strengthening / winterisation of the ships as well as regasification equipment.
The vessels will be delivered with dual fuel diesel electric engines which will be significantly more efficient than steam turbines thereby reducing fuel costs materially. The new engines will also have lower emission levels of pollutants and CO2,
Chairman John Fredriksen says in a comment: “The supply / demand balance for LNG shipping looks increasingly attractive. It is clear from the continued strong global LNG demand and supply growth that a significant amount of new infrastructure, including shipping, will be required over the coming years. The relatively early delivery dates and the option package make this an attractive deal for Golar. Samsung’s experience and ability to build FSRU’s further strengthens the investment case.”
Golar sees further opportunities in the new building markets and is currently actively pursuing several other projects with the target to increase the newbuilding program for early deliveries further.
Given the likely strengthening of the shipping market in the coming years Golar will spend some time to evaluate employment alternatives for the ships. Golar might consider a mixture of several different employment opportunities. These opportunities include spot trading, employment within Golar Commodities for its own cargo trading activities, joint venture structures with LNG suppliers and possible long-term time charters to third parties. Commitment within the FSRU segment for several of the ships seems also like a very realistic and attractive opportunity.
The equity financing of the newbuildings has been secured through the proceeds received from the initial public offering of Golar LNG Partners.
The Board of Golar LNG is very pleased with the way the Golar LNG Partners IPO has been received in the capital markets and sees the newbuildings program as a important project securing the future growth for both Companies.