Herbert Smith Freehills’ Singapore office has advised NASDAQ-listed Golar LNG Limited (“Golar”) on its successful bid to provide Kuwait National Petroleum Company (“KNPC”) floating storage and regasification (“FSRU”) services to support KNPC’s LNG import operations at Mina Al Ahmadi. The regasification services will be delivered via a new-build 170,000 cubic metre vessel manufactured by Samsung Heavy Industries.
The contract (which was signed on 5 August 2013) runs for an initial period of five years and stipulates that Golar will provide regasification services to KNPC for nine months of the year. There will be a three-month window each year whereby Golar is entitled to pursue other LNG activities such as LNG spot trading. The total consideration for the five-year contract is US$213 million, although there is a mechanism for an extension beyond the five year term.
The tendering process started in June 2012, and was a long and protracted process with two different versions of the contract and numerous modifications to the structure of the deal and the tendering conditions. The contract will commence in March 2014, with delivery of the new-build vessel expected in the fourth quarter of this year.
The Herbert Smith Freehills team was led by Singapore based partner Richard Nelson and associate Nick Kouvaritakis, assisted by Helen Qian (Singapore), and the Middle East office provided support on Arabic aspects of the deal with assistance from Chris Thomson and Christopher Schultz.
Richard Nelson commented:
“This deal is a significant transaction for Golar, as it looks to increase its presence in the Middle East, which is viewed as a key market for LNG trading and regasification services. It was also a significant transaction for our firm as it is the first FSRU contract that Golar has concluded with Herbert Smith Freehills as legal advisers. The deal further re-emphasises our ability as a market leader in LNG, and underlines our ability to execute complex cross-border energy work highly effectively.”
KNPC was advised by Clifford Chance’s London office.
