Golar Power Wins Brazil Plant Gig

Golar LNG, a liquefied natural gas shipping company registered in Bermuda, said that its joint venture with Stonepeak Infrastructure Partners, Golar Power Limited has been awarded a 25 year power purchase agreement (PPA) for the construction of a 605MW combined cycle thermal power plant.

The LNG-to-power Project will be developed by CELBA (Centrais Eletricas Barcarena S/A), a special purpose company 50% controlled by Golar Power.

Located in the Brazilian city of Barcarena, State of Pará, the 605MW power plant will utilize imported LNG for the generation of electricity using modern H-Class gas turbines, which will then be distributed to the Brazilian national electricity grid through the existing Vila do Conde Substation located nearby.

Total investments for the power project are estimated at $430 million, of which Golar LNG (GLNG)’s share is $107m.  Capex will be funded through debt and equity between 2022 and 2025 with the equity portion expected to come from proceeds of the first wave of small-scale distribution in Golar Power.

The PPA has been awarded with a pool of 9 different power distribution companies and is expected to generate fixed annual revenues of $174 million (BRL 711.7 million) for 25-years starting on January 1st, 2025.  Payments under the PPA are inflation indexed and provide for pass-through of fuel costs to the PPA counter-parties.

In connection with the PPA, Golar Power anticipates accelerating investment in a new LNG Terminal at the Port of Vila do Conde, also located in Barcarena. The terminal will be wholly operated by Golar Power and will provide an FSRU for 25 years to supply the Project.

The Terminal is expected to commence operations by mid-2021 and is located in a strategic entry point in the North region of Brazil, which will be used as a hub to allow the distribution of LNG and supply of natural gas for electricity generation, commercial and industrial customers, transportation and bunkering well in advance of the power project commencement.  FSRU selection and detailing of the terminal are under way with an anticipated FID in 1H 2020.

Golar Power CEO Eduardo Antonello said, “We are extremely excited with the Barcarena Project, that’s amongst the most strategic LNG developments across the entire world. For decades this whole region has been starving for cleaner and cheaper energy, right at the center of one of the most prominent natural resource basins in the globe. The energy hub that will be introduced by Golar Power in the State of Pará has the potential to supply an area larger than Western Europe, with millions of kilometers of river navigation routes."

Antonello added: "We’ve been working for over 3 years on this endeavour, whilst also mapping the potential LNG applications such as road and river transportation, mining, agriculture, industries as well as large populational areas, and now it has become a reality. Considering the environmental and social benefits, our project has the potential to displace very large volumes of diesel, coal, LPG and heavy fuel oil (HFO) consumption with cheaper LNG, allowing significant reduction of greenhouse gas emissions and creating unique technical and economic development opportunities for the local populations.”

Golar LNG CEO Iain Ross said:  “the award of this new project supports our current strategy to transform Golar LNG into a world leading LNG infrastructure player delivering  cheaper and cleaner energy solutions supported by cash flow from long term contracts.”