Golar LNG and Stonepeak launch Golar Power

Golar LNG Ltd. has entered into a 50/50 JV with investment vehicles affiliated with private equity firm Stonepeak Infrastructure Partners.

The JV company, Golar Power Ltd., will offer integrated LNG based downstream solutions, through the ownership and operation of floating storage and regasification units (FSRUs) and associated terminal and power generation infrastructure.

Stonepeak shares Golar's ambition to aggressively grow in the FSRU- and LNG-fueled power market and is committing $290 MM in new equity to develop Golar Power. Stonepeak said it hopes to invest up to $500 MM in the coming years.

Golar Power's initial asset base will comprise the FSRU currently being constructed at Samsung shipyard, two modern 160-Mcm tri-fuel LNG carriers suited for conversion to FSRUs, and the right to invest in up to 25% of the Sergipe Power project. 

The Sergipe Power project is progressing well and is expected to take FID in the second half of 2016. Golar will also grant Golar Power a one year option to acquire from the company a further two LNG carriers for conversion to FSRUs.

Upon closing, Golar Power will immediately commence conversion of the first LNG carrier to a FSRU.

Subsequent to the formation of Golar Power and the contribution of the abovementioned assets, the Company has sold a 50% interest in Golar Power to Stonepeak.

Stonepeak will acquire its 50% of Golar Power for $117 MM in cash, subscribe to $100 MM in preference shares on closing of the deal and commit to $75 MM in additional equity.

This, together with an additional $75 MM funding commitment from Golar, in the period before 1Q 2018, is expected to be sufficient including debt financing to fully finance the conversion of the two carriers to FSRUs, take delivery of the 2017 newbuild FSRU and complete the financing of its share of the Sergipe Power project.

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