Golar LNG Ltd., the developer of floating natural gas import terminals, will team with private-equity firm Stonepeak Infrastructure Partners to invest in power projects and import terminals intended to boost demand for liquefied natural gas.
The companies have formed a 50-50 joint venture, to be called Golar Power Ltd., to own and operate floating storage and regasification units and related infrastructure, Hamilton, Bermuda-based Golar LNG said in a statement Monday.
New York-based Stonepeak made an initial commitment of $290 million in new equity to fund the partnership, and “we hope to invest up to $500 million in the coming years,” Stonepeak Senior Managing Director Luke Taylor said in the statement. The initial investment includes $117 million in cash to acquire the 50-percent stake in the partnership, $100 million in preference shares on the deal’s closing and a commitment for $75 million in additional equity. Golar LNG will also commit $75 million, the company said.
Golar LNG shares jumped 7.1 percent to $17 in pre-market trading at 8:38 a.m. in New York.
Golar Power’s initial assets will include a FSRU currently under construction, two LNG carriers suited for conversions to FSRUs and the right to invest up to 25 percent in the Sergipe Power project in northern Brazil. The joint venture will also have a one-year option to acquire two additional LNG carriers from Golar LNG for conversion.
The move comes as global LNG prices have tumbled with the plunge in benchmark crude prices over the past two years and demand slips in Asia. A nascent glut in global LNG is expected to expand with a surge of capacity from Australia and the U.S., which became an exporter of shale gas for the first time earlier this year. Floating import terminals can cost a fraction of the multibillion-dollar investments needed for onshore import terminals.
“LNG prices are at a significant discount to oil prices and Golar Power sees a range of potential LNG importers who would benefit from a rapid switch to gas,” the company said in the statement.