Golar to import LNG at Bahia despite lease doubt

Golar Power has been cleared by Brazil's mines and energy ministry to import up to 20mn m3/d of LNG through the Bahia regasification terminal despite continued uncertainty over whether the company's sole bid to lease the facility is valid.

The three-year authorization begins on 1 December 2020.

Golar Power, a 50:50 joint venture between Norway's Golar LNG and US private equity fund Stonepeak, was the only company to submit a bid to state-controlled Petrobras to lease the terminal.

The company already imports LNG into Brazil through its regasification terminal in neighboring Sergipe state, where it also operates the 1.5GW Porto de Sergipe power plant.

Golar Power has reiterated its interest in the lease and refuted Petrobras' assessment of the company's integrity risk after Golar Power's chief executive was implicated in Brazil's sweeping Car Wash corruption probe.

In a tender last month, Golar Power presented a proposal to pay Petrobras R130mn ($23.6mn) to lease the terminal between 2021 and 2023.

Golar Power says the events under scrutiny took place in 2010, six years before the company was created. The firm has appealed the decision, but Petrobras has not indicated how long it would take to address the appeal.

Golar Power accepted a leave of absence request from its chief executive Eduardo Antonello, who was fingered in the 75th phase of Operation Car Wash. The allegations stem from his previous involvement with Norwegian contractor Seadrill, whose Brazilian subsidiary has been served with a search and seizure warrant as part of an ongoing government investigation into corruption.

The incident highlights the continued reach of the Car Wash probe, more than six years after the former downstream director of Petrobras Paulo Roberto Costa was arrested in the early phases of the corruption investigation in 2014. Since then, the probe has recovered over R14bn in embezzled funds.

President Jair Bolsonaro said this week that he has suspended the investigation because there is no longer corruption in the government, an assertion refuted by prosecutors, who said that the president's declarations show his lack of understanding of the work still underway by the task force and his lack of commitment to combating corruption.