Golar LNG Secures Pivotal 20-Year Charter Deal, Analysts Predict 19% Upside

Golar LNG has secured a 20-year charter for its MK II FLNG vessel with Southern Energy S.A. at $400 million in annual net charter fees and a commodity-linked tariff. Analysts project a 19% upside with an "Outperform" recommendation, while GuruFocus' GF Value suggests a 12% potential downside. The deal is set to boost Golar LNG's earnings visibility and is a critical development for investors to watch.

Golar LNG (NASDAQ: GLNG) has secured a 20-year charter for its MK II Floating Liquefied Natural Gas (FLNG) vessel with Southern Energy S.A. (SESA) at $400 million in annual net charter fees and a commodity-linked tariff. This agreement, which was finalized with a Final Investment Decision (FID) in July 2025, is expected to significantly boost Golar LNG's earnings visibility and is a critical development for investors to watch.

The MK II FLNG, currently undergoing conversion in China from an LNG carrier called Fuji, will have a capacity of 3.5 million tonnes per annum (mtpa). It is set to sail to Argentina following its redelivery, with contract start-up expected in 2028. The vessel will be moored in the San Matías Gulf near the FLNG Hilli, which is expected to start its 20-year charter with SESA in 2027. Together, the two units will have a combined nameplate capacity of 5.95 mtpa, resulting in significant operational efficiencies and synergies.

The key commercial terms for the 20-year charter agreement include net charter hire to Golar of $400 million per year, plus a commodity-linked tariff component of 25% of free on board (FOB) prices above $8/mmbtu. Golar's CEO, Karl Fredrik Staubo, commented that the FID "marks another milestone for SESA in establishing Argentina as an attractive LNG exporter and building on Golar’s position as the market leading FLNG service provider."

Analysts project a 19% upside with an "Outperform" recommendation, while GuruFocus' GF Value suggests a 12% potential downside. This deal is expected to generate $8 billion in net earnings for Golar over 20 years, with additional upside potential through the commodity tariff component and SESA shareholding. The strategic 10% ownership stake in SESA further enhances potential returns through equity participation in the broader project success.

The MK II FLNG project remains subject to regulatory conditions precedent and satisfaction of other customary closing conditions, which are progressing according to schedule and expected to be completed by the end of 2025. This agreement reinforces Argentina's emergence as a significant LNG exporter while cementing Golar's technological leadership in the FLNG sector.

References:
[1] https://www.offshore-energy.biz/golar-secures-flng-charter-as-lng-momentum-in-argentina-builds/
[2] https://seekingalpha.com/news/4481402-golar-lng-firms-up-20-year-flng-charter-in-argentina
[3] https://www.offshore-mag.com/vessels/news/55308495/golar-lng-southern-energy-issues-fid-for-flng-project-offshore-argentina
[4] https://www.stocktitan.net/news/GLNG/final-investment-decision-for-20-year-charter-of-mk-ii-flng-to-hbqjpdxwby8r.html