Golar LNG (GLNG)

From Shipowner to Gas Infrastructure

Golar LNG owns floating liquefaction plants (FLNG units): ships moored at an offshore gas field that chill natural gas into liquefied natural gas (LNG) for export. It left the conventional LNG-carrier business in 2025, so it reports no fleet TCE, the daily earnings rate shipowners use, and none should be imputed. Its value rests on long contracts, on the one unit now producing, and on delivering the units it is building.

Capacity is measured in MTPA, million tonnes of LNG a year. At 31 December 2025 two units were on the water, Hilli (2.45 MTPA, wholly owned) and Gimi (2.7 MTPA, 70% owned), and a 3.5 MTPA Mark II (MKII) conversion was in progress.

Much has moved since. By Golar's second-quarter report (13 August 2026) Hilli had ended its eight-year contract in Cameroon and was repositioning to Singapore for modifications ahead of a 20-year contract in Argentina starting in 2027, which left Gimi as the only producing unit. The MKII conversion, now named FLNG Esperanza, is bound for a 20-year contract in Argentina with Southern Energy S.A. (SESA). Golar also took a final investment decision on a fourth FLNG, a second 3.5 MTPA MKII due by the end of 2029 at a budget of about $2.45 billion, and reported net debt of $1.8 billion at 30 June 2026.

Golar is Nasdaq-listed, reports in dollars and has 101.8 million shares. Its year-end 2025 net debt was Golar's share of contractual debt, $2,729 million, less $1,204 million of cash.

Revenue Is a Fee for Liquefaction

Revenue comes from liquefaction services, tolling fees and sales-type leases (where the accounts treat the unit as sold and book the payments as a receivable), all tied to capacity and contract terms. The TCE guide excludes FLNG for that reason: dividing FLNG revenue by calendar days and calling it TCE produces a meaningless number.

There is no per-day breakeven either. Golar publishes how its Argentina contracts with SESA respond to LNG prices, a different disclosure from the per-day opex breakevens of Frontline or Scorpio Tankers. Screening Golar means contracted cash flows, project leverage and completion risk on the new units.

Contracted Cash Flows vs Shipping Cycles

A unit moored at one gas field for the life of its contract earns something closer to an infrastructure tariff than a voyage rate. The spot vs time-charter guide pairs Golar with Danaos as two ways to lock in cash flows: Danaos through multi-year containership charters (its container segment earned $35,892/day in FY2025), Golar through long liquefaction contracts. A spike in shipping rates does not reach Golar the way it reaches Frontline or Scorpio, and a freight slump does not map one-for-one either. Gas prices and field production still matter.

For a DCF of contracted cash, the illustrative discount rate in these guides is 9.0% nominal, applied to disclosed contract cash flows.

Valuation Framework

Value each unit as a project. Price to NAV on broker ship values, the usual shipping yardstick, does not carry over. FLNG value is the NPV of capacity, utilisation, tolling fees or commodity-linked tariffs, remaining contract life and completion capex. The NAV guide covers broker valuations for ships that can trade anywhere; an FLNG adds a conversion cost basis and field integration that a broker build does not capture. Compare FLNG owners on capacity, contract length and project leverage instead.

It has to be a sum of the parts. Hilli and Gimi carry different ownership stakes and contract timelines, and Gimi's 70% stake means consolidated figures need a minority-interest adjustment. Esperanza carried $1,228 million on the balance sheet at year-end, capital at risk until commercial operation. Vessels net book value was $931 million (vessels $865 million): carrying values, not a broker valuation.

Net debt mixes project finance inside the FLNG companies with corporate borrowing, which makes the structure closer to midstream infrastructure than to a spot tanker owner's balance sheet. Reconcile Golar's share to the non-recourse project debt in the footnotes (debt whose lenders can claim only the project's assets) before building EV. Where Golar has support obligations, that non-recourse label can understate corporate risk.

What to Watch and What Can Go Wrong

Execution on the two MKII units is the biggest swing factor. Cost overruns or schedule slip hurt equity before the new capacity earns anything, and delays can add debt first. Beyond that:

• Gimi's output, and Hilli's return in Argentina in 2027. Until then one unit produces.
• Contract terms. Resets, commodity linkages and offtake reliability matter more than any shipping rate. The LNG-price link in the SESA contracts means field production and gas prices hit each contract differently.
• Revenue lines: after the 2025 carrier exit, filings should show FLNG and related infrastructure only, with no legacy TCE.