Golar LNG

What is Golar LNG?

Golar LNG (NASDAQ: GLNG) is currently the world’s only scaled pure-play floating LNG operator. It designs, finances, builds, and operates FLNG vessels — offshore facilities that liquefy natural gas directly above the gas field — under 20-year contracts with major energy producers.

At MORAM Capital, we have covered the company since May 2020, when its structure was considerably more complex, combining the traditional LNG shipping fleet, the still-nascent FLNG business, and a 50% stake in Hygo Energy Transition, a downstream power and regasification business in Brazil operated as a joint venture with Stonepeak Infrastructure Partners.

Over the following three years, Golar LNG focused on simplifying that structure. It first achieved this through the sale of Hygo to New Fortress Energy in April 2021 for $5.1 billion — a transaction that crystallized substantial value and provided the capital base to pursue FLNG at scale. It then completed the separation of its LNG shipping fleet, which was spun off into CoolCo, a separately listed entity, in early 2022.

What remained was exactly what management had always said was the highest-returning part of the business: FLNG.

The commercial model is structurally different from that of a conventional energy company. Golar charges a fixed annual capacity fee per FLNG unit — effectively a toll on the gas that flows through its vessels — and retains additional upside through commodity-linked bonus mechanisms when LNG prices exceed agreed thresholds. On a structural basis, commodity risk does not sit with Golar. The result is a cash flow profile that looks far more like infrastructure than energy, combined with an embedded options book on global gas prices that tends to activate precisely when energy markets are most dislocated.

MORAM Capital began covering Golar LNG in the immediate aftermath of a force majeure declaration in Cameroon, which had sent the stock down sharply and led most investors to question whether the company could survive. We disagreed with that assessment. Over the six years since, we have read every filing, attended every earnings call, rebuilt our model more times than we care to count, and followed every development across Cameroon, Mauritania/Senegal, and now Argentina. Our Golar coverage is one of the most detailed independent research records on the company available on the internet

What Is FLNG and how does Floating LNG work?

FLNG, or Floating Liquefied Natural Gas, is a floating offshore facility that processes natural gas at sea, liquefies it onboard and transfers the LNG directly to carriers for export. Unlike traditional LNG projects, which require large onshore liquefaction plants, pipeline networks and years of heavy infrastructure development, an FLNG vessel allows gas producers to monetise offshore reserves without building a full land-based export complex.

In a conventional LNG project, the operator typically needs to develop an onshore liquefaction terminal — an investment that can cost $20 billion to $50 billion, take close to a decade to complete and require political stability, land access and extensive pipeline infrastructure. This is one of the main reasons why only a limited number of countries have historically been able to develop LNG exports at scale.

Floating LNG changes that equation. An FLNG vessel sits directly above or near the offshore gas field, processes the raw gas onboard, removes impurities and cools it to around -162°C until it becomes liquid. The LNG is then loaded onto conventional LNG carriers via ship-to-ship transfers offshore. In simple terms, FLNG is a way to bring the liquefaction plant to the gas field, rather than bringing the gas to the plant.

Golar LNG’s model is best described as FLNG-as-a-service. The company finances the vessel, manages the conversion or construction process and operates the asset under long-term contracts, typically around 20 years. The gas producer pays a fixed annual capacity fee, while Golar retains additional upside through bonus mechanisms linked to LNG prices. This structure gives producers faster time to market, lower upfront complexity and better cost visibility than many traditional onshore LNG developments.

The global FLNG market remains highly specialized. There are still fewer than 15 FLNG units in operation worldwide, and execution has been difficult for many projects. Shell’s Prelude, the best-known large-scale FLNG asset outside Golar, suffered repeated operational issues and is often viewed as a reminder of how challenging floating LNG can be. By contrast, Golar’s Hilli has delivered 100% commercial uptime over eight years in Cameroon and more than 140 LNG cargoes, while Gimi has operated above nameplate capacity since reaching commercial operations in June 2025. For producers looking for a proven third-party FLNG operator, the list of credible options remains extremely short.

Golar’s FLNG Assets: Hilli, Gimi & Mark II

Golar currently operates two FLNG units and has a third under construction — all three contracted for 20 years with investment-grade counterparties. Together they represent the most concentrated and proven FLNG portfolio in existence.

The progression from Hilli to Gimi to Mark II illustrates Golar’s continuous improvement as an operator and developer. Each successive unit is more capable, contracted under better terms, and financed more efficiently than the last. The $17 billion contracted EBITDA backlog (Golar’s share, before commodity exposure and inflationary adjustments) confirmed at the Q3 2025 results is entirely composed of fixed, 20-year contracted cash flows — not projections.

Golar LNG & Argentina: Vaca Muerta

Argentina has become the most important strategic pillar in Golar’s next phase. Through two separate 20-year agreements with SESA, the YPF-led consortium behind the country’s LNG export push, Golar has secured contracts for both Hilli and the Mark II. That makes Argentina central to the company’s medium- and long-term earnings profile.

The industrial logic rests on Vaca Muerta, one of the world’s largest unconventional gas resources. For years, the basin’s export potential remained constrained by the absence of commercially viable liquefaction infrastructure. Building large onshore LNG capacity in Argentina would have required a scale of capital, execution and political certainty that was difficult to justify. FLNG offers a more practical route to monetisation.

Supporting infrastructure is already moving forward. SESA has committed more than $500 million to pipelines, compression, mooring systems and related works needed to accommodate both vessels. The project has also signed a Heads of Agreement with SEFE, Germany’s state-backed gas security company, for up to 2 MTPA of LNG from late 2027, providing an early signal that the export route has credible commercial demand.

The contracts themselves follow the same broad structure as the rest of Golar’s model: a fixed annual capacity fee, upside exposure through commodity-linked bonuses once LNG prices exceed defined thresholds, and inflation protection through CPI-linked mechanisms from year six onward. Once both vessels are operating, Argentina should represent a material step-change in Golar’s earnings power. In our view, that is not yet fully reflected in how the equity is currently valued.

Golar LNG Equity Research — MORAM Capital Coverage

Understanding Golar LNG properly requires far more than reading the quarterly filings. The key drivers of value sit beneath the surface: contract structures, bonus mechanisms, redeployment timing, financing terms, construction risk and the probability of future FLNG awards.

Golar LNG is the company for which MORAM Capital is best known, and the one we have covered more deeply than any other since our first purchase in May 2020. We began analysing the business in the aftermath of the Cameroon force majeure and have followed every major step in its transformation into the world’s leading pure-play FLNG platform.

Our premium Golar LNG coverage includes:

• Initial equity research setting out the full investment case and valuation framework
• Regular company updates following results, contracts, financing developments and major industry events
• Asset-by-asset valuation work across Hilli, Gimi, Mark II and future FLNG optionality
• Detailed contract analysis including fixed fees, commodity-linked upside and inflation protections
• Scenario tables and model revisions as LNG prices, financing assumptions and timelines evolve
• Ongoing monitoring of key catalysts, including Argentina execution, Mark II construction,  potential new FLNG awards…