Southern Energy S.A. (SESA), a joint venture created to enable liquefied natural gas (LNG) exports from Argentina, has reached a final investment decision (FID) for the charter of a floating LNG (FLNG) unit from the fleet of Bermuda-based Golar LNG.
The FID relates to the MK II FLNG , which boasts a 3.5 million tonnes per annum (mtpa) capacity. The vessel is currently in China, undergoing conversion from an LNG carrier called Fuji to an FLNG unit. This follows definitive agreements for the charter that the duo inked in May 2025.
Golar’s Chief Executive Officer (CEO), Karl Fredrik Staubo , commented: “Today’s FID marks another milestone for SESA in establishing Argentina as an attractive LNG exporter and building on Golar’s position as the market leading FLNG service provider.
“FID solidifies $8 billion of net earnings visibility over 20 years to Golar, with attractive upside potential in the FLNG commodity tariff component and through our shareholding in SESA. We look forward to continuing to develop the SESA partnership into a leading LNG exporter in South America.”
As disclosed, key commercial terms for the 20-year charter agreement of MK II include net charter hire to Golar of $400 million per year, plus a commodity-linked tariff component of 25% of free on board (FOB) prices above $8/mmbtu.
Following the conversion, the MK II is set to sail to Argentina, where it will be moored in the San Matías Gulf near the FLNG Hilli . The pair will be used to monetize gas from the Vaca Muerta formation, dubbed the world’s second-largest shale gas resource, located onshore in Argentina’s Neuquén province.
The MK II’s contract start-up is scheduled for 2028, and Hilli’s for 2027. Golar believes the two units’ combined nameplate capacity of 5.95 mtpa will result in significant operational efficiencies and synergies.
SESA is a company formed to enable LNG exports from Argentina. It is owned by a consortium of Argentinian gas producers, including Pan American Energy (30%), YPF (25%), Pampa Energia (20%), and Harbour Energy (15%), as well as Golar (10%).
The MKII FLNG project remains subject to regulatory conditions precedent and satisfaction of other customary closing conditions which are progressing according to schedule and expected within 2025.
Another FLNG from Golar’s fleet, Gimi, recently reached the commercial operations date for its 20-year lease and operate agreement. The unit is working with BP at the Greater Tortue Ahmeyim (GTA) natural gas field, seen as the biggest project in the UK-headquartered energy giant’s portfolio.