Athens: Golar LNG has secured up to $960m in financing for its GoFLNG unit Golar Hilli from CSSC (Hong Kong) Shipping Co, a shipowning unit of China’s shipbuilding conglomerate China State Shipbuilding Corporation (CSSC).
The financing will fund up to 80% of the cost of the converting the Moss-type LNG carrier Hilli into a GoFLNG vessel at Singapore’s Keppel Shipyard. The shipyard’s subsidiary KSI Production owns a 10% interest in the GoFLNG Hilli.
Once Golar has spent $400m of the estimated $1.2bn conversion cost, the company will be able to draw down up to $700m from the facility in the first phase of the financing, which will go towards funding the project. The company has already spent $385m on the conversion and expects to cross the $400m threshold soon.
In order to draw down, the Cameroon government must also ratify the tolling contract between Perenco and SNH, which is expected to be signed in the third quarter this year.
A further $260m will be able to be drawn down in the second phase of the facility, which will be activated once the completed GoFLNG Hilli has been delivered from Keppel Shipyard and “certain additional performance milestones” have been satisfied.
The financing has a tenor of 10 years, a 15-year amortisation profile and contemplates the eventual sale of GoFLNG Hilli to Golar LNG Partners.
The expected cost of the financing during the conversion period is 6.25%, while the long-term financing is projected to cost less than 6% on a fully swapped ten-year basis, Golar said today.
“Securing this financing is a further important step in realising Golar’s Integrated LNG Mid-Stream Services Strategy,” the company said in a statement. “Apart from securing the Hilli programme, the financing will ultimately enable the release of Golar equity for application on other GoFLNG programmes.”
In January, Keppel Shipyard signed a $705m contract to convert the Gimi, a second Moss-type LNG carrier, into a GoFLNG unit for Golar.
