Argentinian energy company YPF has sent a force majeure notice to Belgium shipowner Exmar, saying it is unable to pay for the charter of the Tango FLNG unit due to the effect of the coronavirus pandemic.
According to Exmar, YPF claims that effects of the coronavirus pandemic both worldwide and in Argentina have hindered YPF's ability to perform its obligations under the Tango FLNG agreements. This includes but is not limited YPF's ability to pay the invoices due for services performed for the period starting the second half of March 2020.
"Exmar considers the notice to be unlawful, has reserved its rights, and is considering its best option to defend its interests. Irrespective of the outcome of the dispute with YPF S.A. in respect of the Notice, Exmar is contemplating several measures to safeguard its liquidity position, which is on the basis of our current forecast, not at risk till the end of 2020," the company said.
Tango FLNG, delivered last year from a Chinese shipyard, receives natural gas from the Vaca Muerta gas field and is forecasted to produce 500,000 tons of LNG per year. The unit was commissioned in June 2019 and began a ten-year contract with YPF on September 14, 2019.
The unit contributed 36% to total Exmar EBITDA for the first quarter of 2020. During the quarter, TANGO FLNG produced its fourth cargo of liquefied natural gas from the Vaca Muerta gas field in Argentina and had an uptime of 99%.