Golar LNG (GLNG) Q1 FY26 earnings call: guidance and Q&A

How have geopolitical events, specifically the Iran war and Rosneft incident, influenced commercial discussions for new FLNG units?

The Rosneft incident, which removed 7 million tonnes of LNG supply for 3-5 years, has created urgency for early delivery of new FLNG capacity. This has shifted commercial discussions from price to securing capacity, a more favorable dynamic for Golar.

“So instead of having sort of a price war with the counterpart, it's who gets the first delivery, and that's a much better dynamic for us than to discuss tariff details.”

asked by John Mackay · answered by Karl Staubo

Have discussions for a potential fifth FLNG unit begun, given the accelerated demand for capacity?

Yes, the strategic review was launched to explore how to further accelerate growth, which is a direct response to the strong commercial discussions and increased demand for FLNG capacity.

“Absolutely. So as we've said, the reason for launching the strategic review is to see how we can further accelerate growth, and that's on the back of the commercial discussions. So for us, the short answer is yes.”

asked by John Mackay · answered by Karl Staubo

What type of donor vessel is being considered for the fourth FLNG unit (Mark I or Mark II), and what are the expected commercial terms for new contracts?

A donor vessel can be used for either a Mark I or Mark II conversion, but Golar is ensuring capacity for a Mark II. Commercial terms target 15-20 year contracts with a CapEx to EBITDA ratio between 5 and 6x, including inflationary adjustments and commodity upside, though specific terms vary by geography and counterparty.

“we have previously guided that we target long-term contracts of 15 to 20 years at a CapEx to EBITDA between 5 and 6x. And then obviously, we try to also build in inflationary adjustments as well as commodity upside.”

asked by Christopher Robertson · answered by Karl Staubo

What is the status of regulatory approvals and the construction timeline for the dedicated gas pipeline in Argentina?

Regulatory approvals and right-of-way are in place as the pipeline will run alongside an existing oil pipeline. Construction involves line pipes, compressor stations, and EPC, all of which have been awarded. The construction time is well within two years, ensuring readiness for the Mark II's arrival.

“So all of the right-of-way and regulatory approvals is in place. We do expect a separate Rig protection to be awarded to the pipeline company. There are 3 key components to the construction of the pipeline.”

asked by Christopher Robertson · answered by Karl Staubo

What is CESA's strategy for selling the LNG capacity from Hilli and Mark II, specifically regarding long-term contracts versus spot sales?

Out of the 6 million tonnes total guaranteed capacity from Hilli and Mark II, 2 million tonnes have been sold. CESA shareholders are discussing reserving approximately 1 million tonnes for spot cargoes, targeting new local demand in South America (e.g., Brazil) where Golar expects higher FOB prices due to shipping advantages. The 8-year CESA contract allows for optimization as it progresses.

“CESA has already sold the first 2 that leaves us another 4 to sell. We are actively discussing amongst the CESA shareholders to reserve around 1 million tonnes for spot cargoes.”

asked by Sherif Elmaghrabi · answered by Karl Staubo

Are there any contractual upside mechanisms if the Argentina project starts up earlier than scheduled?

Early production would mean earlier revenue generation. However, the primary focus is on ensuring all necessary infrastructure, including the pipeline and FLNG units, aligns with the schedule. There are no specific contractual upside mechanisms for early completion; the goal is to meet the planned schedule.

“So everything needs to be in place more than looking for the upside, we are just wanting to ensure that we are according to the schedule that we have put forward. And for now, we're tracking very well to achieve that.”

asked by Alexander Bidwell · answered by Karl Staubo

What significant modifications are required for Hilli FLNG when moving from Africa to South America due to geographical differences?

Two key modifications are needed: significant adjustments to the anchoring points due to different met-ocean conditions in Argentina, and a limited winterization scope for key components exposed to potential negative temperatures during Argentina's winter, which is not an issue in Cameroon.

“The key changes, however, are One of them, it's a different met ocean condition in Argentina versus Cameroon. So we'll do relatively large modifications to the anchoring points on the Hilli, like physically where the vessel is connected to the mooring system.”

asked by Liam Burke · answered by Karl Staubo