Golar LNG Limited has received an underwritten financing commitment for its first GoFLNG project from CSSC (Hong Kong) Shipping Co. Ltd (CSSCL) for conversion financing and sale and leaseback transaction for the GoFLNG Hilli.
Under the project, Golar LNG’s ex-LNG Carrier Golar Hilli will be converted to an FLNG (Floating Liquefied Natural Gas production unit) at Singapore’s Keppel Shipyard.
As informed, the financing structure is worth a total of USD 960m and will fund up to 80% of the USD 1.2bn project cost, to be split into two phases.
The first phase enables Golar to drawdown up to USD 700m from the facility to fund the ongoing conversion cost, once Golar has spent USD 400m of the estimated USD 1.2bn conversion cost and the tolling contract with Perenco and SNH have been ratified by the Cameroon government, expected during Q3 2015.
Golar has spent approximately USD 385m against the conversion project to date and expects that the equity threshold required to trigger the financing arrangement will be reached shortly.
“This financing means that following the Cameroon government ratification, no further Golar direct funding for the Hilli conversion will be required, with the remainder of the conversion project being financed through this new debt facility,” the company said in a release.
The second phase will start upon the delivery of the converted GoFLNG Hilli from Keppel Shipyard, allowing for the drawdown of up to a further USD 260m.
The financing has a tenor of 10-years, a 15 year amortisation profile and contemplates the eventual sale of GoFLNG Hilli to Golar LNG Partners. The expected cost of the financing during the conversion period is 6.25%, while the long term financing is projected to cost less than 6% on a fully swapped ten year basis.
Golar said that apart from securing the Hilli programme, the financing will ultimately enable the release of Golar equity for application on other GoFLNG programmes.