Golar LNG's Q4 2024: Unpacking Key Contradictions in FLNG Contracts and Infrastructure Plans

These are the key contradictions discussed in Golar LNG Limited's latest 2024Q4 earnings call, specifically including: Mark II FLNG Contract Commitment, fourth FLNG vessel conversion candidates, The Option for the Second Mark II, and Infrastructure Requirements for Argentina:



Transition to FLNG Focus:
- Golar LNG completed its transition to a pure FLNG company, selling Avenir LNG and Golar Arctic, marking the end of its 50-year presence in the LNG shipping market.
- This transition was driven by the desire to concentrate on strengthening its market-leading FLNG presence, aligning with the company's strategic focus on long-term, stable cash flow from infrastructure projects.

Earnings Growth and Backlog Expansion:
- Golar LNG's adjusted EBITDA for the full year of 2024 reached $241 million.
- The company's backlog stands at $11 billion before commodity exposure, driven by the acquisition of Hilli minority interests and new contract wins.
- Growth in earnings and backlog is attributed to increased focus on FLNG projects and the acquisition of minority stakes, providing long-term cash flow visibility and reduced volatility.

Argentina Expansion and Market Development:
- The Hilli contract was extended in Argentina for a 20-year period, establishing Argentina as an LNG exporter.
- The addition of major gas producers like Kampa Energia, Harbour Energy, and YPF to the project strengthens the credit quality and supports Argentina's potential for further FLNG deployments.
- This development is part of the company's strategy to diversify its revenue streams and capitalize on the growing global demand for LNG.

Fourth FLNG Unit Planning:
- Golar LNG is actively exploring the development of a fourth FLNG unit, aiming to order it after securing a charter for the Mark II FLNG under construction.
- The company is considering units of varying sizes (Mark I, Mark II, or Mark III) depending on commercial opportunities and the needs of potential projects.
- This strategic planning is driven by the strong global demand for LNG and Golar's position as the leading FLNG provider, seeking to maintain its market leadership.