(Ecofin Agency) - Cameroon’s floating liquefied natural gas project (FLNG) has been approved by all parties of the Gas Convention for the project at a signing ceremony in Yaoundé, Cameroon on the 30th of September.

Golar LNG Limited stated that Cameroon’s state-owned oil and gas company Société Nationale des Hydrocarbures (SNH), Perenco Cameroon (Perenco), Golar Hilli Corporation and Golar Cameroon executed a fully effective and binding Gas Convention with the Republic of Cameroon.

The Convention endorses and governs the installation and operation of the GoFLNG vessel in Cameroon waters offshore of Kribi. This final investment decision commits the project to a targeted start date for commissioning of the Q2 2017.

To Golar, the binding Tolling Agreement having already been agreed between Golar and Perenco, is expected to be formally approved by the 25% upstream partner SNH imminently. This agreement establishes the terms under which Golar will provide liquefaction, storage, and off-loading services to SNH and Perenco as upstream joint venture partners.

Golar, Perenco and SNH have for the past two years been developing a floating liquefied natural gas export project located near shore off the coast of Cameroon located in an area of benign sea states and utilizing Golar’s floating liquefaction technology (GoFLNG).

“The achievement of this very significant milestone in the delivery of Golar’s FLNG strategy is the result of many years of hard work and technical innovation by our employees and partners. We consider ourselves very fortunate to be developing our first FLNG project in a very professional partnership with Perenco and SNH who have provided a solid foundation to this ground-breaking project. Golar’s GoFLNG business model reduces the resource holder’s CAPEX and project execution risk, advance their cash flow and is flexible enough to develop smaller reserves.” Golar’s CEO Gary Smith told Oilandgaspeople

The project is however based on the provision of 500 Bcf of natural gas reserves from offshore Kribi fields, which will be exported to global markets via the GoFLNG facility “Hilli”, now under construction at Keppel Shipyard in Singapore. Golar is to provide the liquefaction facilities and services under a tolling agreement to SNH and Perenco as parties of the upstream joint venture. It is anticipated that the allocated reserves will be produced at a rate of 1.2 million tons of LNG per year, representing approximately 50% of the vessel’s nameplate production capacity, over an estimated eight-year period. It is expected that production will start in Q2, 2017.

 “The Kribi field development was approved within a relative short time frame and delivers solid economics for all parties involved notwithstanding the current low oil and gas price environment. This approval clearly demonstrates the competitiveness of the GoFLNG model vs other alternative approaches to LNG project development,” Smith added.