Golar Power reaches a Final Investment Decision on Sergipe Power Project and signs 25 year FSRU agreement
October 17 2016 - 8:27AM
The board of Golar Power is
pleased to announce that it has approved taking a Final Investment
Decision on the Porto de Sergipe Project, thereby enabling CELSE,
the project company, to enter into a lump sum turn-key EPC
agreement with General Electric to build, maintain and operate a
1.5 GW combined cycle power plant in Brazil. The executed EPC
contract with General Electric, which makes up approximately 80% of
the project cost, has been structured on a non-recourse basis to
the sponsors Golar Power and Ebrasil with all liabilities limited
to the project level (CELSE).
Located near Aracaju, the state
capital of Sergipe, the 1,516 megawatt power station will be the
largest thermal power station in South America. The project will
supplement hydropower during dry seasons and help to meet growing
demand for electricity in the region. Capital expenditure for
the power station and terminal including taxes and financing costs
is estimated at BRL4.3 billion, equal to US$1.3 billion at current
exchange rates. Scheduled to deliver power to 26 committed
off-takers for 25 years from 2020 in accordance with previously
executed PPA contracts awarded by the Brazilian government in 2015,
the power project will generate a projected annual EBITDA of BRL1.1
billion based on no dispatch with further upside based on dispatch.
Payments under the executed PPA are inflation indexed and provide
for pass through changes in commodity prices to the PPA
counterparties.
In connection with the Sergipe
FID, Golar Power has entered into an Agreement to charter Golar
Nanook, the November 2017 delivering new-build FSRU, for 25 years.
The annual EBITDA contribution for Golar Power is currently
projected to be US$39 million with upside potential for Golar Power
from FSRU capacity not utilised by the Sergipe power plant.
Golar Power has also increased its
ownership in the Sergipe Project from 25% to 50%. The final price
to be paid for the shares will depend on the performance of the
project and the structure includes an option, which if exercised,
limits the price to US$50 million. As Golar Power had previously
committed to finance the selling shareholders' equity contribution
in the project, the ownership uplift is expected to have a limited
cash impact on Golar Power during construction. The total
equity funding from Golar Power remains unchanged at an expected
US$165 million.
Golar LNG Limited has a 50%
ownership interest in Golar Power. The remaining 50% is held by
Stonepeak Infrastructure Partners. Golar Power will own 50% of the
Sergipe project and 100% of the associated FSRU.
Golar Power CEO Eduardo Antonello
commented "We are very enthusiastic with the FID of Porto de
Sergipe and fully committed to deliver the plant and terminal in
accordance with the original budget and schedule. The project shows
very solid economics and provides a strong financial foundation for
Golar Power. Through this project, Golar Power is developing a very
robust and replicable structure to enable the most comprehensive,
cost-efficient and flexible integrated gas-to-power solutions
globally. We see a huge market to develop cheaper and cleaner
energy solutions."
FORWARD LOOKING
STATEMENTS
This press release contains certain forward-looking statements
concerning future events and Golar's operations, performance and
financial condition. Forward-looking statements include, without
limitation, any statement that may predict, forecast, indicate or
imply future results, performance or achievements, and may contain
the words "believe", "anticipate", "expect", "estimate", "project",
"will be", "will continue", "will likely result", "plan", "intend"
or words or phrases of similar meanings. These statements involve
known and unknown risks and are based upon a number of assumptions
and estimates that are inherently subject to significant
uncertainties and contingencies, many of which are beyond Golar's
control. Actual results may differ materially from those expressed
or implied by such forward-looking statements. Important
factors that could cause actual results to differ materially
include, but are not limited to, those factors listed from time to
time in the reports and other documents Golar files with the United
States Securities and Exchange Commission.
New factors emerge from time to
time, and it is not possible for Golar to predict all of these
factors. Further, Golar cannot assess the impact of each such
factor on its business or the extent to which any factor, or
combination of factors, may cause actual results to be materially
different from those contained in any forward-looking statement.
Golar does not intend to release publicly any updates or revisions
to any forward-looking statements contained herein to reflect any
change in Golar's expectations with respect thereto or any change
in events, conditions or circumstances on which any such statement
is based.
Hamilton, Bermuda
October 17, 2016
Enquiries:
Golar Management Limited: + 44 207 063 7900
Brian Tienzo
Stuart Buchanan
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Golar LNG via Globenewswire
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