SEPTEMBER 4, 2013 – Exmar and LNG Partners are moving ahead to solidify plans or the long-term charter of a Floating Liquefaction & Storage Unit (FLSU) to serve the BC LNG Project near Kitimat, British Columbia, Canada.
The move comes following execution of a Letter of Intent (LOI) by Exmar with LNG Partners, LLC and LNG BargeCo BVBA last month.
Exmar says BC FLSU will be world’s second Floating LNG Production Unit. First will be Exmar and Pacific Rubiales Energy (PRE) unit offshore Colombia pictured here
When the LOI was announced, Exmar said that will design, contract, and deliver a newbuild floating barge equipped with an air-cooled PRICO liquefaction plant with a name plate capacity of 0.7 MTPA (Million Tons Per Annum) in the first quarter of 2016. The project has already received its export permit and is on schedule to obtain all required approvals and permits by the end of 2013. This will be the world’s second Floating LNG Production Unit, after the Exmar and Pacific Rubiales Energy (PRE) first unit offshore Colombia which will be operational in the first quarter of 2015.
Exmar will charter the FLSU, designed to remain operational on location without drydocking, to the BC LNG Project for a firm term period of 20 years with options to extend for two periods each of five years. The charter agreement is subject to the approval of the BC LNG Project Steering Committee.
Today, Exmar and LNG Partners reported that they have invested in a joint venture company named Marching Prospect Limited. The new company will acquire interests in the BC LNG Project upstream of the FSLU.
In addition, Exmar has made a loan of C$50,000,000 to finance a non-refundable deposit for construction of the FSLU. This non-refundable deposit enabled the project to meet a deadline set by Pacific Northern Gas Ltd. (PNG); if the deadline had not been met or extended, this would have resulted in the Project’s key Gas Transportation Service Agreement (GTSA) being terminated and would have allowed PNG to withdraw the full amount of the cash collateral which had previously been placed into escrow as liquidated damages for termination of the GTSA. The C$50,000,000 is the largest amount dedicated to the Project by any participant to date.
LNG Partners has also granted Exmar the option to purchase 50% of the LNG cargoes to be produced by the FSLU and Exmar has granted LNG Partners as well as the other parties currently involved with the Project an option to acquire an interest in the FSLU.
Various aspects of the alliance are subject to the approval of third parties, including the BC LNG Project Steering Committee of which LNG Partners is a voting member, and to the execution of the definitive charter for the FSLU.
Nicolas Saverys, CEO of Exmar, said, “Exmar’s dealings with LNG Partners and its principals spread out over many years. We are very pleased to solidify our relationships with these wonderful people further by the establishment of our joint venture company, Marching Prospect, and our increasing role in the development the BC LNG Project.”
Tom Tatham, CEO of LNG Partners, said, “I have always had the greatest respect for Nicolas Saverys and his colleagues at Exmar. The joinder of Exmar with LNG Partners and the other current participants in the BC LNG Project presents a formidable team for achieving the success of the Project.”