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    GLNG
    Earnings call· Jun 2026(Q2 FY26)

    GOLAR LNG Q2 FY26 earnings call GLNG

    Aug 13, 2026 Source

    Executive summary

    Golar LNG Q2 FY26 — Fourth FLNG Unit Ordered, Significant Capacity Expansion and Strong Operational Performance

    Golar LNG announced a firm order for its fourth FLNG unit, a Mark II, significantly expanding its liquefaction capacity and reinforcing its market leadership. The company reported strong operational performance from its existing fleet and robust financial results, supported by commodity-linked earnings. Management highlighted a clear growth trajectory with additional options and LOIs, while maintaining a disciplined capital allocation approach and an ongoing strategic review to accelerate FLNG growth.

    Highlights

    5

    • Secured firm order for a fourth Mark II FLNG unit, increasing total liquefaction capacity by 41% to over 12 million tonnes.

    • Q2 EBITDA increased 20% quarter-on-quarter to $127 million, driven by higher commodity-linked earnings.

    • Hilli completed its 8-year contract with 100% economic uptime and is on track for redeployment to Argentina, generating $285 million annual EBITDA.

    • Gimi overproduced 15% versus contractual volume in Q2, demonstrating strong operational performance.

    • Liquidity strengthened to approximately $1.5 billion, including a new $600 million revolving credit facility.

    Concerns

    1

    • CapEx budget for the fourth FLNG unit increased to approximately $2.45 billion, up from $2.2 billion for Esperanza, due to inflationary pressure on long-lead equipment.

    Guidance & targets

    4
    CategoryTargetConfidence
    FLNG #4 Delivery
    within 2029
    high materiality
    High
    Annual Run Rate EBITDA (with FLNG #4)
    more than $1.2 billion
    high materiality
    High
    FLNG #4 CapEx to EBITDA Multiple
    5 to 6x
    medium materiality
    Medium
    FLNG Options Delivery Timeline
    around 38 to 40 months
    low materiality
    Medium

    Operational metrics

    28
    Total Operating Revenue
    $130 million
    Q2 FY26
    EBITDA
    $127 millionup 20% QoQ
    Q2 FY26

    Compared to $106 million in Q1, primarily driven by higher commodity-linked earnings from Hilli.

    Hilli Commodity-Linked Earnings
    $37 millionvs $10 million in Q1
    Q2 FY26
    Net Income
    $56 million
    Q2 FY26

    Bringing year-to-date net income to $158 million.

    Quarterly Dividend
    $0.25
    Q2 FY26

    Consistent with capital allocation framework.

    Cash and Equivalents
    $900 million
    Q2 FY26

    At quarter end.

    Net Interest-Bearing Debt
    $1.8 billion
    Q2 FY26

    At quarter end.

    Available Liquidity
    $1.5 billion
    Q2 FY26

    Inclusive of the $600 million revolving credit facility secured during Q2, which remains undrawn.

    Esperanza Equity Funded
    $1.3 billion
    To date

    Out of a total budget of $2.2 billion for the conversion project.

    Potential Incremental Liquidity
    $2.3 billion
    Future

    From optimizing Hilli financing and locking long-term financing for Esperanza.

    Total EBITDA Backlog
    $17 billion
    Long-term

    Across Hilli, Gimi, and Esperanza, before commodity upside and inflationary adjustments, and before a charter on the fourth FLNG unit.

    Annual Run Rate EBITDA (3 FLNGs)
    $800 million
    by 2028

    Expected with Gimi, Hilli, and Esperanza fully operational, before commodity upside and inflation adjustments.

    Incremental Annual Earnings per $1/MMBTU LNG Price
    $100 million
    Annual

    Every $1 per million BTU above $8 can generate this amount of incremental annual earnings to Golar from Hilli and Esperanza charters.

    Estimated Commodity Exposure Value Increase
    $500 million
    Annual, first 3 years

    Based on current and forward pricing, this movement could increase the value of commodity exposure during the first 3 years of SESA operations.

    Estimated Annual EBITDA at $10/MMBTU LNG Price
    $1.4 billion
    Annual

    Based on base contracted earnings plus commodity upside.

    Estimated Annual EBITDA at $15/MMBTU LNG Price
    $1.9 billion
    Annual

    Based on current forward prices for next year, including base contracted earnings and commodity upside.

    Estimated Annual EBITDA at 2022 LNG Pricing
    $4 billion
    Annual

    To illustrate embedded upside potential if LNG pricing from 2022 were applied.

    Hilli Economic Uptime
    100%
    8-year contract

    Achieved during its 8-year contract for Perenco offshore Cameroon.

    Hilli Cargoes Delivered
    156
    8-year contract

    Over the 8 years of its contract in Cameroon.

    Gimi Production vs Contractual Volume
    15%
    Q2 FY26

    Gimi overproduced 15% versus contractual volume in Q2, despite coming into summer months.

    Esperanza Conversion Completion
    74%
    Q2 FY26

    Conversion progress, with over 15 million manhours completed without lost time incidents.

    Global LNG Market Growth
    40%
    2026-2031

    The industry is set to grow around 40% between 2026 and 2031.

    US and Qatar Market Share Increase
    40% to 53%
    Future

    The two largest exporters, U.S. and Qatar, are expected to increase their market share from 40% to 53% of global supply.

    Qatar Liquefaction Plant Outage
    17 million tonnes
    3 to 5 years

    Estimated outage from a total capacity of 88 million tonnes due to military action.

    All-in Delivered LNG Cost (Mark II FLNG)
    under $8
    Current

    Estimated cost including upstream feedstock gas, liquefaction, shipping, and regasification.

    Annual Operating Margin for Charter
    $1.3 billion
    Annual

    Estimated for a 3.5 MTPA Mark II FLNG at 90% utilization with current forward LNG prices.

    Operating Margin per Cargo
    $25 million
    Per cargo

    Estimated for a 3.5 MTPA Mark II FLNG at 90% utilization with current forward LNG prices.

    Hilli Modification Budget
    $350 million
    From departure to commission

    Budget for refurbishment and redeployment from Cameroon to Argentina.

    Industry KPIs

    2
    MetricValueDetails
    FCF shareholder distributions$0.25USD per share
    Take or pay contract structure25%%

    Deals & partnerships

    5
    CIMC Raffles ShipyardFirm order for fourth FLNG unit (Mark II)

    The fourth FLNG unit is a Mark II design, similar to Esperanza, and will be constructed at CIMC Raffles, the same shipyard constructing Esperanza. Delivery is expected within 2029.

    CIMC Raffles ShipyardOption for incremental Mark II FLNG unit

    As part of the firm order for the fourth FLNG, Golar secured an option for a third Mark II FLNG unit at CIMC Raffles.

    Seatrium ShipyardLetter of Intent for incremental growth units

    The LOI reserves slot reservations for either a Mark I or Mark II design FLNG. Seatrium constructed Hilli and Gimi and will conduct Hilli's modification work.

    PerencoCompletion of 8-year FLNG contract8 years

    Hilli completed its 8-year contract for Perenco offshore Cameroon with 100% economic uptime and 156 cargoes delivered. Golar expressed gratitude and hope to work together again.

    SESALong-term charter for Hilli and Esperanza20 years

    Hilli is being redeployed to Argentina for a 20-year contract with SESA, starting in the second half of next year. SESA is also the contract counterpart for Esperanza.

    Capital programs

    3
    FLNG Esperanza Conversion Projectunderway$2.2 billion
    Spent to date: $1.3 billion

    The project is 74% complete and remains on schedule and on budget. Sail away is expected by year-end 2027, with operations starting in Argentina in H2 2028.

    Fourth FLNG Unit (Mark II)announced$2.45 billion

    The CapEx budget increased due to inflationary pressure on long-lead equipment. This unit will be similar to Esperanza and is expected to be the earliest available FLNG capacity globally. Payment terms are pay-as-you-go, with substantially lower capital outlays in the first two years compared to Esperanza.

    Hilli Modification Workunderway$350 million
    Start: Q2 FY26

    The budget covers the period from Hilli's departure from Cameroon until its arrival and commissioning in Argentina for its new 20-year contract.

    Risks & headwinds

    3
    Inflationary pressure on long-lead equipmentCurrent

    CapEx for FLNG #4 increased by approximately 10% to $2.45 billion (from $2.2 billion for Esperanza)

    Mitigation: Golar believes the cost is still highly competitive compared to newbuilds and other offshore assets. Significant synergies are expected from repeat design and overlapping construction at the same shipyard. Negotiated lower capital outlays in the first two years of construction.

    Supply concentration in LNG market2026-2031

    US and Qatar market share expected to increase from 40% to 53% of global supply; Qatar's Ras Laffan plant estimated to be out by 17 million tonnes for 3-5 years.

    Mitigation: Golar believes FLNG will play a vital role in diversifying supply, especially given geopolitical events. Golar's conversions are seen as the only incremental capacity with relatively near-term delivery.

    Long lead equipment availability and lead timesCurrent and future

    Turbines, dual fuel engines, steam generators, and cold boxes see significant competition from other industries (AI data centers, shipbuilding, aircraft).

    Mitigation: Golar has secured options for incremental long-lead equipment as part of the firm order for FLNG #4, at very limited to no incremental cost, to secure future growth trajectory.

    What to watch in Q3 FY26

    5

    FLNG #4 Long-Term Charter Agreement

    Next quarter / near-term
    CurrentAdvanced discussions
    TargetSigning of term sheet or framework agreement

    Why it matters

    Securing a long-term charter for FLNG #4 is crucial for de-risking the investment and enabling Golar to proceed with ordering subsequent FLNG units, driving future growth.

    We do not expect to add additional units until we have clear visibility on the long-term charter for the unit now ordered.

    Q&A highlights

    6

    What is the process for commercializing the fourth FLNG unit, securing a customer, and what are the target return profiles?

    Golar focused on Mark II due to strong charter engagement and attractive CapEx/OpEx. The commercialization process involves signing a term sheet/framework agreement, then a definitive contract, and finally lifting regulatory CPs. Target returns are 5-6x CapEx to EBITDA.

    “We expect then to further narrow down the charter opportunities and to secure a long-term charter for the unit where we maintain sort of a 20-year duration plus/minus. And we remain with our guidance in the 5 to 6x CapEx to EBITDA sort of range.”

    asked by John Mackay · answered by Karl Staubo

    2 min read6 chapters

    Detailed Narrative

    01

    Expansion of FLNG Fleet and Capacity

    Golar LNG announced a firm order for its fourth FLNG unit, a Mark II, to be constructed at CIMC Raffles Shipyard for delivery within 2029. This order increases Golar's controlled liquefaction capacity by 41% from 8.6 million tonnes to over 12 million tonnes. The company also secured an option for an incremental Mark II FLNG at CIMC Raffles and signed a Letter of Intent with Seatrium Shipyard for further growth units, aiming for a fleet of over 7 units.

    02

    Operational Performance and Project Status

    The FLNG Hilli successfully completed its 8-year contract with 100% economic uptime, delivering 156 cargoes, and is now in transit for modifications ahead of its 20-year contract in Argentina. The FLNG Gimi continued to perform above contractual levels, producing 15% above its contracted capacity in Q2. The FLNG Esperanza project remains on schedule and on budget, with 74% completion and sail away expected by year-end 2027.

    03

    Financial Highlights and Liquidity

    Golar reported Q2 operating revenue of $130 million and EBITDA of $127 million, a 20% increase quarter-on-quarter, primarily driven by $37 million in Hilli's commodity-linked earnings. Net income for the quarter was $56 million. The company's liquidity position was strengthened to approximately $1.5 billion, including a new $600 million revolving credit facility, with $900 million in cash at quarter-end.

    04

    Commodity Upside and Earnings Potential

    The company highlighted significant commodity-linked upside from its contracts, particularly Hilli and Esperanza, where Golar receives 25% of FOB prices above $8 per million BTU. Management estimates that every $1 per million BTU above $8 can generate approximately $100 million of incremental annual earnings. Based on current forward prices, this could add up to $500 million per year during the first three years of SESA operations.

    05

    Strategic Market Positioning

    Golar believes its new FLNG order represents the world's earliest available liquefaction capacity, 1 to 2 years ahead of alternatives, which is expected to drive charter interest. The company emphasized its unique position to capture market opportunities given significant pressure on critical long-lead equipment and limited shipyard capacity for new FLNG builds globally.

    06

    Capital Allocation and Growth Strategy

    Golar maintains a disciplined capital allocation framework, including a quarterly dividend of $0.25 per share and an active share buyback program. The company's strategy is to only have one open vessel at a time, proceeding with subsequent orders once long-term charters are secured for the preceding unit, recycling capital through asset-level financing.

    AI-generated summary of the company’s earnings call. Not investment advice.