I discussed Golar LNG (GLNG) during the first half of 2023
About 8 months later, and … not a lot has changed.
The biggest event probably occurred this week – GLNG’s second FLNG vessel, FLNG Gimi, finally leaving the construction site and heading to its work site in Mauritania.
If one has been following the developments wrt FLNG Gimi, the sail-away is both good and bad.
Good - the vessel finally left the construction site
Bad - As recently as mid Aug 2023, GLNG had suggested departure was scheduled for end of Sept 2023.
And more bad …
Turns out there are additional steps. When FLNG Gimi arrives in Mauritania waters (in about 60 days) they are supposed to notify BP. The asset hooks up and there is a commissioning time-frame
Bubble 3 & 4 – could take up to 6 months before asset is ready for Commercial Operations Date (COD)
Ouch! That wasn’t in my expectations. GLNG mgmt indicate they are working to see if the “validation window” to COD can be reduced.
I will just say Floating Liquefaction of Natural Gas (FLNG) is difficult – That’s why there are only 5 operational FLNG projects total in about 10 years.
Ok, onto other stuff.
FLNG Hilli is doing just fine. It is the most productive of the 5 operational FLNG units, and Golar continue to reap the benefits of the asset. Besides the operational side, FLNG Hilli earns on the FLNG tariff side too. The asset is contracted with Perenco through 2026. But GLNG is already working on re-contracting the asset beyond 2026.
FLNG Mark II activity is also in progress. At this time, FLNG Mark II just means higher production. The vessel has been acquired and long lead items have already been purchased. EPC contract negotiations and engineering have progressed.
Golar have a small subsidiary - Macaw Energies. There seem to be some significant plans for testing the technology in 2024. Then a potential spin-off.
Golar have done a good job with monetization of assets. The company sold a majority of their shipping assets (now CoolCo) and sold Golar Tundra as an FSRU. The asset sales also reduced their debt significantly. GLNG is now able to pay a decent dividend (25c/sh) the last two quarters. When FLNG Gimi officially starts its contract with BP [sometime in 2024] there will be more cash flowing.
I have to say I was disappointed when I read about FLNG Gimi’s issues. But, on the positive side, the vessel is sailing to its production site. The Golar staff who worked on this activity can now take a well deserved break (and then be ready for FLNG Mark II activities?? ). I have increased my GLNG stake slightly. Just a small stake right now. It would have been a larger increase if the FLNG developments had been more immediate.