Golar’s involvement in Southern Energy extends to the purchase of domestic natural gas. Credit: wasi1370 from Pixabay.

Golar LNG has signed agreements with Pan American Energy (PAE), including one for the deployment of an FLNG vessel in Argentina for a period of 20 years.

The agreements will also see Golar holding a 10% interest in Southern Energy, a joint venture (JV) with PAE.

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The JV will oversee the purchase of domestic gas, operations and the sale of liquefied natural gas (LNG) volumes from Argentina.

Due to commence LNG exports in 2027, the FLNG project is set to leverage Argentina’s vast Vaca Muerta shale gas reserves in the Neuquina Basin.

Golar LNG said the venture is underpinned by a commercial framework including a gas sales agreement from PAE and an FLNG charter agreement with Golar.

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This FLNG charter agreement includes a base tariff and a component linked to the commodity price of LNG sales.

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Golar’s FLNG vessel Hilli, with a capacity of 2.45 million tonnes per annum (mtpa), will be utilised for the project, offering an equivalent net tariff of $2.6 per million British thermal units given the 90% capacity utilisation. This arrangement also includes a pricing element tied to commodity prices.

Golar retains the flexibility to consider swapping this vessel for another suitable FLNG unit from its fleet.

Furthermore, Golar’s involvement in Southern Energy extends to the purchase of domestic natural gas and the operations sales, and marketing of LNG volumes from Argentina.

Golar CEO Karl Fredrik Staubo said: “We are excited to enter a partnership with Pan American Energy, one of the leading energy companies in Latin America. The project will provide an international outlet for Argentina’s vast and attractive natural gas reserves, creating value to Argentina and its gas stakeholders. The project expands Golar’s global footprint, with further growth potential.”

The execution of the agreements is contingent upon the fulfilment of customary conditions.

Last year, state-owned Nigerian National Petroleum signed a deal with Golar LNG to build a new offshore plant to extract LNG.