Golar Power, a joint venture between Golar LNG and Stonepeak Infrastructure Partners, signed a letter of intent with the state of Pernambuco in northeastern Brazil to develop an LNG import terminal in the port of Suape
The project is part of the company’s strategy to target Brazil’s northeast for small-scale LNG distribution and is expected to use existing port infrastructure owned by the state government.
Since 2015, the Port of Suape has been Brazil’s largest hub for liquid bulk and gases and will now be one of the main LNG distribution hubs in the northeast of Brazil, with full integration for sea and land transportation modes.
Golar Power said it will partner with a Brazilian gas distribution company, Companhia Pernambucana de Gás Natural, to bring natural gas to the regions of Pernambuco state that are not yet served by traditional pipeline networks.
Natural gas will be delivered by road using LNG ISO containers.
The Golar Power terminal intends to use an existing LNG carrier permanently docked at the Suape Port, with the vessel acting as a supplier to trucks with mounted LNG ISO containers.
These vehicles will then distribute LNG to cities within a radius of up to 1,000 km. Golar Power said the initial trucked volumes will be 800 m3 of LNG per day, equivalent to approximately 480,000 m3 of natural gas per day.
LNG will also be distributed from Suape to other Brazilian states through cabotage, using small-scale LNG carriers.
Capex requirements for the project are expected to be funded from Golar Power’s internal resources and operating cash flow.
Golar Power said operations are scheduled to begin in H2 2020 while the final development of the project is subject to regulatory approvals and the conclusion of commercial agreements.
The project includes infrastructure for supplying natural gas and LNG to generate electricity in addition to meeting the demands of industries, commerce, LNG stations and households, a statement from Golar said.