Golar LNG Limited ( GLNG ) shares are trading higher after the company entered into definitive agreements with Pan American Energy to deploy a floating liquefied natural gas vessel in Argentina for 20 years.

The FLNG project aims to capitalize on Argentina’s abundant gas reserves from the Vaca Muerta shale formation in the Neuquina Basin, which holds the world’s second-largest shale gas resources.

Golar’s CEO, Mr. Karl Fredrik Staubo, said, “We are excited to enter a partnership with Pan American Energy, one of the leading energy companies in Latin America.”

Check This Out: BYD Faces Scrutiny In Thailand Over Pricing Issues: Report

The project plans to utilize Golar’s FLNG Hilli, boasting a capacity of 2.45 million tons per annum, offering a net tariff equivalent to $2.6/mmBtu (assuming 90% capacity utilization), supplemented by commodity-linked pricing. Golar retains the option to explore swapping with another suitable FLNG unit.

Under the agreements, Golar will own a 10% share in Southern Energy S.A., a specialized joint venture with PAE.

This entity will manage the procurement of local natural gas, oversee operations, and handle the sale and distribution of LNG volumes originating from Argentina.

“The project expands Golar’s global footprint, with further growth potential,” Staubo added.

Expected to commence LNG exports by 2027, the initiative positions Argentina as a significant player in the global LNG market.

This strategic initiative is underpinned by a strong commercial framework, including a Gas Sales Agreement with PAE for gas supply and an FLNG charter agreement with Golar, incorporating a base tariff and exposure to LNG sales prices.

Price Action: GLNG shares are trading higher by 6.54% to $33.55 at last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Read Next:

Analysts Rally Behind Waystar: Predict Robust Growth and Market Share Gains Following Competitor Setback