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What: Shares of Golar LNG (NASDAQ:GLNG) are up 11% as of 11:15 a.m. EDT after the company announced that it would be forming a joint venture with Schlumberger (NYSE:SLB) to develop offshore natural-gas fields with Golar's floating LNG production vessels. 

So What: Earlier today, both Golar LNG and Schlumberger announced that they will be forming the OneLNG joint venture. The goal of the joint project is to market Schlumberger's oil-field services with Golar's floating LNG assets to producers that have access to low-cost offshore natural-gas deposits but don't have an economic method for moving and monetizing the gas. 

The market for these assets is quite large, actually. According to the two companies' investment analysis, more than 40% of the world's natural-gas reserves are considered stranded. This means that there is either a lack of infrastructure to transport that gas, or a lack of a local market to consume it. Natural gas is becoming a larger and larger contributor to our energy mix as it replaces coal in many places for power generation and is being used much more for petrochemical manufacturing. So clearly, there is an immense opportunity for Golar to keep its fleet of LNG vessels busy for some time. 

Another added benefit of the deal is that it will allow Golar to use the balance-sheet strength of Schlumberger to raise some money in the capital markets to build out assets for the OneLNG fleet. Golar is in a unique position as one of the very few companies that provide floating liquefaction and regasification vessels, but it's a capital-intense undertaking to get these vessels built. Golar's size and its already rather stretched balance sheet was making it difficult to expand its operations. This deal should help the company find that next leg of growth. 

Now What: Having Schlumberger as a partner will likely be a huge win for Golar LNG. The company is the largest oil-field services providers in the world, and has extensive contracts and relationships with large integrated oil and gas companies and national oil companies that own the rights to most of these stranded natural gas assets. The joint venture should help keep the company's assets employed over the long term and help support Golar's ambitious expansion plans without completely compromising its balance sheet. 

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