Golar LNG and Schlumberger announced today the creation of a joint venture (JV) to accelerate the development of low gas reserves to liquefied natural gas (LNG).
The JV will be called OneLNG and will unite Schlumberger’s knowledge on reservoirs, wellbore technologies and production management capabilities, with Golar LNG’s low cost floating LNG (FLNG) solutions.
“This new joint venture is uniquely positioned to optimise the development of low cost gas reserves,” Schlumberger President of Operations, Patrick Schorn, said.
Golar LNG and Schlumberger Join Ties
OneLNG will serve as the exclusive vehicle for all the projects that involve the conversion of natural gas to LNG.
According to the firms, approximately 40% of the world’s gas reserves can be classified as stranded and OneLNG will be able to capitalise on this and conclude five projects within the next five years.
The combination is also expected to result in a faster and lower cost development, thereby increasing the net present value of the companies’ resources, the two firms informed in a statement.
“The technology platform and production management capability that Schlumberger brings will enable a total system approach, leading to a simpler and fast-tracked FID (final investment decision) process and reliable operational execution for the benefit of the gas resource owners,” Schorn added.
“A Powerful Union” for LNG
The firms have agreed on an initial investment commitment to cover the estimated equity needed to develop the first project and will discuss additional debt capital needed on a project-by-project basis.
According to the firms, the future financing will consider Golar LNG’s intellectual property through an equitable contribution mechanism to be agreed between the parties.
“Our new venture with Schlumberger provides a powerful union of their oil field services technology and production management business and our low-cost FLNG solution. It leverages Golar’s LNG expertise and builds upon our industry leading position as a midstream solutions provider,” Golar Vice Chairman, Tor Olav Troim, said.
Golar will have a 51% interest in the JV, while Schlumberger will own 49%.