Golar Plans Brazil LNG Import Terminal

Golar Power Limited has signed a “protocol of intentions” with the government of Brazil’s Pernambuco state to develop a liquefied natural gas (LNG) import terminal in the Port of Suape in northeastern Brazil, Golar LNG reported Monday.

Golar Power is a 50/50 joint venture (JV) between Golar LNG and the private equity firm Stonepeak Infrastructure Partners, according to Stonepeak’s website.

The agreement – signed on Friday – calls for using an existing LNG carrier permanently docked at the state-owned port, Golar LNG noted in a written statement emailed to Rigzone. The firm stated the vessel will act as a supplier to truck-mounted LNG ISO-containers, which will then distribute LNG to cities within an up to 621-mile (1,000-kilometer) radius.

Set to start operations in the second half of this year, the project comprises infrastructure to supply natural gas and LNG to generate electricity as well as satisfy demand from industries, commerce, LNG stations and households, Golar LNG stated. It added the JV will partner with local gas distribution company Companhia Pernambucana de Gas Natural (Copergas) to service regions of Pernambuco beyond the reach of traditional pipeline networks.

According to Golar LNG, an estimated 800 cubic meters of LNG per day – amounting to approximately 480,000 cubic meters of natural gas per day – will initially be trucked out of the Suape import terminal. In addition, the firm stated the facility will distribute LNG to other states in Brazil via small-scale LNG carriers. The JV will cover project capital expenditures with internal resources and operating cash flow, Golar LNG added.

“Golar Power plans to interiorization of LNG in the country through a strategic plan that contemplates the Northeast as a priority region for small-scale distribution,” stated Golar LNG. “Suape is already Brazil’s largest hub for liquid bulk and gases and, now, it will be one of the main LNG distribution hubs in the Northeast, with full integration of sea and land transportation modes.”

The project’s final development hinges on regulatory approvals and the conclusion of commercial agreements, Golar LNG noted.

To contact the author, email mveazey@rigzone.com.