Golar LNG Partners LP announces today that it has reached agreement with Petrobras to make certain modifications to the Golar Winter floating storage and regasification unit (“FSRU”) and to extend the term of the contract by 5 years to 2024.
Petrobras have taken the decision to move the Golar Winter FSRU from its present site in Rio de Janeiro to Bahia and as a consequence the vessel will require certain modifications including the addition of LNG loading arms. Golar Partners has agreed to make these modifications and Petrobras have agreed to an increase in the charter rate in return for the upgrades to be made to the vessel.
In addition to the 5 year extension, Golar Partners will receive, in nominal terms, approximately $24 million in additional revenue over the term of the contract before the effect of rate escalation as provided for in the time charter.
The vessel is due to be delivered at its new site in the third quarter 2013 at which point the new charter rate will commence. The vessel is expected to incur offhire time of approximately the same amount as would be incurred during its normal five yearly drydocking, which will be undertaken at the same time. Golar Partners will enter into an agreement with Golar LNG Limited under which Golar LNG Limited will undertake the modification work.
Golar Partners will finance the modification work with cash and undrawn credit facilities but may also take the commitment into account in future debt or equity transactions.
This contract extension increases the Partnerships average contract term to approximately 9.2 years which is increased from an approximate 8.2 year average as at December 31, 2011, and will provide significant stability of cash flow in the longer term.
Golar LNG Partners total contracted revenue backlog will increase to $1.9 billion.
World Maritime News Staff, January 19, 2012; Image: Keppel Corporation