- Golar LNG signed $13.7bn charter deals with Southern Energy S.A. for two FLNG units offshore Argentina, set to begin operations in 2027 and 2028.
- FLNG Hilli and MKII units will produce 5.95 mtpa combined, with annual revenues of $285m and $400m respectively, and price-linked upside above $8/mmbtu.
- The project taps Vaca Muerta shale gas and benefits from a 30-year export license and Argentina’s Large Investment Incentive Regime.
Golar LNG Limited has signed two long-term charter agreements with Southern Energy S.A. (SESA) to deploy two floating liquefied natural gas (FLNG) units off the coast of Argentina. The deals will generate an estimated $13.7 billion in revenue over 20 years.
Golar made a Final Investment Decision (FID) to relocate its FLNG Hilli Episeyo to Argentina. The company also confirmed it met all conditions required to proceed. Golar will begin operations under a 20-year charter in 2027.
The FLNG Hilli has a production capacity of 2.45 million tonnes per annum (mtpa). Golar expects to earn $285 million each year from the charter. The revenue structure includes a gas price-linked tariff.
The second agreement covers the MKII FLNG unit. Golar is converting the vessel in China and plans to launch operations in 2028, subject to final approval in 2025. The MKII unit will produce 3.5 mtpa and deliver $400 million in annual revenue.
Both charters offer fixed revenues and additional upside from rising gas prices. Golar will earn a 25% uplift on Free on Board (FOB) gas prices above $8 per million British thermal units (mmbtu). The company also benefits from a $6/mmbtu floor price to protect against market downturns.
SESA, formed to lead Argentina’s LNG export drive, includes Pan American Energy (30%), YPF (25%), Pampa Energía (20%), Harbour Energy (15%), and Golar LNG (10%). Each partner committed to supplying gas under fixed-price contracts, indexed to the US Consumer Price Index (US-CPI). Golar’s 10% stake gives it added exposure to gas sales.
Golar and SESA will deploy both FLNG units in the San Matías Gulf, off Río Negro province. The location sits near Argentina’s Vaca Muerta shale formation, which holds the world’s second-largest shale gas reserves. The site also offers access to existing export infrastructure.
Initially, Golar will source gas for the Hilli unit from the excess supply in the national pipeline network. The partners also plan to build a dedicated pipeline linking Vaca Muerta to the San Matías Gulf, ensuring long-term feedstock for both units.
By positioning the FLNG units close to each other, Golar aims to reduce costs, improve logistics, and streamline operations.
The Argentine government granted the project a 30-year unrestricted LNG export license. Authorities also approved the venture under the Large Investment Incentive Regime (RIGI), offering favourable terms to attract capital.
Golar included flexible terms in both agreements. SESA can shorten the Hilli charter to 12 years and the MKII charter to 15 years. Each option requires a three-year notice period and a termination fee.
Golar views the project as a strategic move to expand its FLNG footprint and capture growth in South America’s gas export market. The company expects strong cash flow, stable earnings, and long-term value linked to global LNG demand.
Argentina plans to use this project to unlock its shale gas potential and position itself as a key player in global energy markets.