The consideration is Golar LNG’s remaining 4.1 million shares in New Fortress Energy along with $100m in cash and the former assuming nearly $323m in debt obligations associated with the FLNG
New Fortress Energy (NFE) has agreed to divest its stake of 50% in trains 1 and 2 of the Hilli floating liquefied natural gas (FLNG) facility located offshore Kribi, Cameroon to Golar LNG in a stock and cash deal.
The consideration is Golar LNG’s remaining 4.1 million shares in New Fortress Energy along with $100m in cash. Besides, Golar LNG will assume nearly $323m in debt obligations associated with FLNG Hilli.
Following the closing of the deal, the number of New Fortress Energy’s shares outstanding will be reduced to about 204.7 million.
New Fortress Energy chairman and CEO said: “We believe this is a fair economic result for both ourselves and Golar.
“Furthermore, from a strategic perspective, it will allow us to focus solely on our own FLNG portfolio that we own 100 percent of as well as buy back NFE stock at an attractive valuation.
“Golar has been a meaningful partner for the past several years and we have appreciated the opportunities to collaborate with them as we continue to advance NFE’s mission to bring more affordable, reliable and cleaner energy to customers around the world.”
FLNG Hilli has a capacity of 2.4 million metric tonnes per annum (MTPA) of LNG. Its customers include oil and gas firm Perenco and Cameroon’s national oil company Société Nationale des Hydrocarbures (SNH).
After the completion of the transaction, Golar LNG’s effective interest in currently contracted earnings of FLNG Hilli will be 94.55% of common units that receive tolling related fees pertaining to trains 1 and 2 and 5% of Dutch Title Transfer Facility (TTF) related fees. Additionally, the company will get 89.1% of Series A units that receive Brent oil related fees and 89.1% of Series B units that get 95% of TTF related fees.
Golar LNG CEO Karl Fredrik Staubo said: “Today’s announced transaction increases Golar’s portion of cash flow generation from Hilli’s existing contract ending in July 2026.
“Improved market fundamentals for liquefaction capacity and Hilli’s market leading operational track record supports increased utilisation and earnings potential of Hilli upon re-contracting. The transaction continues our company simplification, reducing our investments in listed securities whilst unifying the ownership of the FLNG Hilli.”
The deal, which is subject to customary conditions, is anticipated to close in the first quarter of this year.