How quickly can Golar deploy units to reach a fleet of 7 FLNGs, considering the options and LOIs?

Golar has secured yard capacity for up to 7 units through options and LOIs. The company's policy is to only have one open FLNG at a time, meaning they will not order the next unit until a long-term contract is secured for the previous one, then recycle capital through asset-level financing. “We remain with our very clearly stated policy that we are not going to have more than one open FLNG at the time. Hence, we're not considering ordering unit #5 until we have clear visibility for a long-term contract on the fourth unit.”

Given the LOI with Seatrium (Mark I or Mark II) and option with CIMC (Mark II), how will Golar select shipyards for future units?

Golar is comfortable with both Seatrium and CIMC. Selection will primarily depend on price, payment terms, and delivery schedule. Charter preference might also play a role, but generally, it's about commercial terms. Mark I units are more likely to go to Seatrium. “So when it comes to the next unit and the yard selection, we are clearly comfortable with both shipyards. So it will come down to price, payment terms and delivery.”

What caused the $250 million increase in CapEx for FLNG #4 compared to Esperanza?

The 10% CapEx increase is mainly due to significant cost inflation on long-lead equipment, as well as steel prices and currency fluctuations. Despite this, the overall increase is considered competitive given 40-60% inflation on some long-lead items. The stated CapEx is an all-in delivered cost. “So as we said, that's around a 10% increase. That's mainly driven by very significant cost inflation on long lead equipment and also impacted by steel prices and currency fluctuations.”

GLNG

Golar LNG (GLNG) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 13, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
FLNG #4 Delivery	within 2029 high materiality	FY29	High
Annual Run Rate EBITDA (with FLNG #4)	more than $1.2 billion high materiality	by 2030 · FY30	High
FLNG #4 CapEx to EBITDA Multiple	5 to 6x medium materiality	Long-term	Medium
FLNG Options Delivery Timeline	around 38 to 40 months low materiality	Future	Medium

GLNG operating KPIs by quarter

GLNG operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	Change vs prior quarter
Commercial uptime Hilli	100% Starting on the top left, the Hilli is the best-performing FLNG globally and delivered another quarter of 100% economic uptime. Source: earnings call transcript	100% At the same time, Hilli once again maintained 100% commercial uptime continuing its outstanding operational track record. Source: earnings call transcript	0 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

CIMC Raffles Shipyard Firm 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 Shipyard Option 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 Shipyard Letter 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.

Perenco Completion of 8-year FLNG contract 8 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.

SESA Long-term charter for Hilli and Esperanza 20 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

FLNG Esperanza Conversion Project underway $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 Work underway $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

Inflationary pressure on long-lead equipment Current

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 market 2026-2031

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 times Current 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

FLNG #4 Long-Term Charter Agreement

Next quarter / near-term

Current Advanced discussions

Target Signing 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.

Find out whether GLNG delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.