SUCCESSFULLY REALISING FLNG PROJECTS - InterOil Corporation: Developing mid-sized modular, land-bas | IOC Message Board Posts

InterOil Corporation

  IOC website

IOC   /  Message Board  /  Read Message



Rec'd By
Authored By
Minimum Recs
Previous Message  Next Message    Post Message    Post a Reply return to message boardtop of board
Msg  8520 of 13357  at  10/12/2011 8:39:17 AM  by


 In response to msg 8518 by  Rob Cos
view thread

Re: SUCCESSFULLY REALISING FLNG PROJECTS - InterOil Corporation: Developing mid-sized modular, land-based LNG, and Floating LNG in Papua New Guinea - November 16th in South Korea

 The entire 9:00-11:00am set of sessions at this South Korean-based Succssful Realising FLNG Projects conference have ties to IOC.
Henry Alford is President of Pacific LNG. Aldorf is an industry heavyweight, who was responsible for setting up Equatorial Guinea’s only LNG plant in 2007 when at Marathon, one of the lowest cost and fastest LNG projects set up from scratch, and was the venture’s first managing director, he said. Aldorf was most recently the president of Marathon International and vice-president of global upstream of Marathon Oil.
Pacific LNG is a partner with IOC in Liquid Niguini Gas (LNGL).
Below is an 11Apr2011 PR discussing the execution of FLNG agreements between IOC, Pacific LNG and LNGL:
Pacific LNG Operations Ltd. (PACLNG), Liquid Niugini Gas (LNGL) and InterOil Corporation(IOC) Execute Agreements

Pacific LNG Operations Ltd. (PACLNG), Liquid Niugini Gas (LNGL) and InterOil Corporation (IOC) Execute Agreements with FLEX LNG Ltd. (FLEX LNG) and Samsung Heavy Industries (Samsung) for a 2 mm tons annual capacity Floating LNG Liquefaction Vessel (FLNG) in Papua New Guinea (PNG) With Targeted Start of LNG Production in 2014.

Singapore 11 April 2011, Pacific LNG Operations Ltd. is pleased to announce that conditional agreements have been executed with FLEX LNG(Oslo Axess: FLNG)and Samsung for an FLNG project that will liquefy natural gas from the onshore Elk and Antelope gas fields in the Gulf Province in PNG. Commencement of operations is targeted for mid 2014. The agreements are conditional upon FLEX LNG shareholder approval, which approval is targeted by the end of April 2011 and Final Investment Decision (FID) to be reached by all parties before the end of 2011.

FLEX LNG has already completed the generic Front-End Engineering and Design (FEED) in 2009 and the project specific FEED is targeted to start in May 2011 with the parties to work towards reaching FID before the end of 2011. The agreements represent a strong collaboration of close to one year between FLEX LNG, Samsung, IOC, PACLNG and LNGL to work together to develop what is likely to become the first ever floating facility to produce LNG.

Samsung has agreed to restructure the commercial relationship with FLEX LNG whereby, upon reaching FID, the intention is to transfer substantially all previous instalments paid to Samsung under the existing four shipbuilding contracts to the single FLNG unit that is destined for the PNG project. FLEX LNG would retain its right to construct additional FLNG units at Samsung.

FLEX LNG and Samsung will be responsible for the design, engineering, construction and commissioning of the FLNG vessel. FLEX LNG will also be joint operator of the FLNG unit together with LNGL, which is a joint venture between IOC and PACLNG. Construction of the FLNG unit will be fully financed by FLEX LNG and Samsung by utilising equity already paid to Samsung by FLEX LNG together with construction financing provided by Samsung.

The FLNG vessel is expected to be moored alongside a jetty, which will be shared with Liquid Niugini's land-based LNG facilities, and have a production capacity of up to 2 million tons of LNG per annum. FLEX LNG will receive, less agreed deductions and premiums, 14.5% of the revenue from the sale of LNG from the FLNG vessel for an initial 15-year period. For the next 5 years FLEX LNG will receive 12.5% of the revenue and 10% of the revenue for the last 5-year period. During the life of the contract, LNGL will become the majority owner of the FLNG vessel.

As a part of the arrangements, IOC and PACLNG will receive options exercisable no later than 15 days after FLEX LNG's shareholder approval of this equity transaction, to acquire 11,315,080 common shares in FLEX LNG at an average strike price of 4.5909 NOK. This is approximately a 12% premium to the average share price during October 2010 when an initial non-binding agreement was executed between FLEX LNG, IOC and PACLNG.

Furthermore upon the project reaching FID, IOC and PACLNG will receive shares at par value equivalent to 5% of FLEX LNG. An additional amount of shares equalling up to 15% ownership in FLEX LNG may be issued to IOC and PACLNG at par value in three 5% tranches during the period from FID until 9 months after FID.

Commenting on the agreements, President of PACLNG and LNGL, Henry Aldorf stated:

"Following our land based mid-sized modular LNG approach we are again using innovative solutions, to reduce construction cost and time in the LNG industry, with the fixed floating LNG producer being developed by FLEX LNG and Samsung, the largest Korean conglomerate and a leader in FLNG. With Samsung building the fixed floating LNG unit, providing construction financing and a full completion guarantee and FLEX LNG's design and engineering experience we have brought FLNG in the realm of reality.

As we did for the land based project, we are aligning the returns of the solution provider with future returns of the project. The FLNG vessel will allow us to further accelerate the monetisation of our large Elk and Antelope resources and bring value to the State of Papua New Guinea and all other stakeholders.

We are happy to be forging a relationship with FLEX LNG and Samsung and are looking forward to bring this exciting project to FID within 2011. The project will also provide an additional secure and stable supply of environmentally friendly LNG to the needy markets in Asia".


     e-mail to a friend      printer-friendly     add to library      
Recs: 2  
   Views: 1030 []
Previous Message  Next Message    Post Message    Post a Reply return to message boardtop of board

Financial Market Data provided by