07/05/24
Finally, a real positive development for Golar LNG (GLNG). The company announced a major FLNG activity in Argentina.
There are a couple of components to this award.
- Golar are expected to provide an FLNG (Floating Liquefaction of Natural Gas) asset to Pan American Energy to tap into Vaca Muerta resources.
- Golar to form a joint venture with Pan American Energy to sell and market LNG from Argentina.
Three additional data-points.
- A couple of months ago, GLNG announced a potential FLNG deal in Nigeria. The major difference is that the Argentina development is a commitment expected to start in 2027. Nigeria is still not at Final Investment Decision (FID) yet.
- The suggested vessel is FLNG Hilli that is expected to wrap up operations in Cameroon in 2026. For several years, there has been an open question on whether FLNG Hilli would stay in Cameroon. I think the South American development puts pressure on Perenco and Cameroon to make a decision on whether FLNG Hilli stays in Cameroon.
- Golar has already started the process for building a third FLNG asset. I think the new development might make a final decision on proceeding forward on building the third FLNG asset easier. (given the potential of Vaca Muerta resource, there might be need for more than one FLNG anyway).
Regarding GLNG’s second FLNG asset, FLNG [correction] Gimi is in Mauritania waiting to be hooked up with the necessary supply infrastructure. Still waiting on when the formal COD (Commercial Operations Date) is announced. Like Vaca Muerta, FLNG [correction] Gimi is supposed to be onsite for 20 years.
Already increased my GLNG position earlier in 2024. Even though the Argentina project doesn’t start till 2027, the fact that Golar has better future revenue and growth visibility now, is quite enticing. I might bump up my GLNG stake in the near term.