Golar LNG’s future looks bright thanks to a healthy pipeline of projects. The company has landed important deals and is moving ahead with groundbreaking FLNG projects like the giant MK II. With these developments in place, Golar is poised for a huge leap in growth in the next few years.
Established in 2008, Golar LNG Ltd is one of the very few companies doing business in floating liquefied natural gas, or FLNG, infrastructures. Headquartered in Hamilton, Bermuda, the powerhouse differs from all other enterprises in the sector owing to its advanced participation in offshore FLNG systems, enabling the production and conversion of LNG without the construction of land-based facilities, in addition to tapping into stranded gas reserves.
Golar LNG mainly specializes in leasing and managing FLNG vessels and providing sea transportation of LNG through a fleet of carriers. The company earns income from long-term leasing of FLNG units and LNG vessels, as well as through the management of such rental assets. Additionally, Golar LNG participates in developing new FLNG projects via partnerships with gas producers.
Golar LNG has a wide variety of customers including oil national companies, independent gas producers, and energy companies in the chain of natural gas. The target market is primarily global energy markets, looking to broaden their reach, especially in terms of the supply of natural gas where conventional structures may be absent or not cost-effective. With its pioneering FLNG technologies, Golar LNG is poised to enhance the development of the gas industry and promote a shift to more renewable forms of energy.
Exciting project developments have shown bright prospects for Golar LNG, while the company most recently received a new 20-year contract with Pan American Energy to bring its $11 billion backlog to life. FLNG Hilli is already showing excellence, having done 122 offloads and 8 million tons of LNG production. Meanwhile, Golar’s MK II FLNG project will be the largest in the world at 3.5 mtpa capacity, doubling the company’s output on line when it comes on stream in 2027.
In terms of expansion, Golar is driving in the fast lane. The Hilli unit is deployed to Argentina whereas Gimi is scheduled to be on commercial operations by 2025. Golar’s possibilities for growth are ever more evident considering the estimated $300 million EBITDA that is expected from the Pan American Energy gas provision contract. Besides, Golar is keeping and building up its financing capacity by issuing new offshore bonds for the MK II project which creates a comfortable financial outlook for the company.
We are bullish on Golar LNG. Strengthened with a solid pipeline of projects such as MK II and fleet expansions, the company is on its way to significant growth in the coming years. Golar possesses solid financial backing and strategic moves, positioning the company as a solid pick for investors.
Golar LNG does not rank on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held GLNG at the end of the third quarter which was 36 in the previous quarter. While we acknowledge the potential of GLNG as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as GLNG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
