Golar and bp enter into commercial reset arrangements for FLNG Gimi
Golar LNG Ltd. (“Golar”), and bp, as operator of the Greater Tortue-Ahmeyim LNG Project, have executed agreements to implement a commercial reset for FLNG Gimi, according to the company's release.
The commercial reset agreement simplifies contractual cash flows and settles previous disputes related to payment mechanisms for pre-commercial operations date (“Pre-COD”) contractual cash flows. Golar and bp have agreed an updated schedule of daily payments until the Commercial Operations Date (“COD”). The daily payments have step-up mechanisms based on project milestones up to COD and are secured by long stop dates. Golar will also be entitled to certain lump sum bonus payments subject to achievement of certain project milestones. These Pre-COD cash flows are expected to be deferred on the balance sheet and amortized over the 20-year contract term from COD.
The commercial reset settles all ongoing disputes including the current arbitration process and re-aligns the parties towards reaching COD.
To shorten the time to COD the parties have also agreed to start the commissioning of FLNG Gimi with an LNG cargo prior to the availability of gas from the FPSO.
