Golar LNG Expands FLNG Hilli Stake, Eyes Long-Term Argentina Deal

Golar LNG Limited GLNG shares traded lower in the premarket session on Tuesday but recovered from the loss. The company has acquired Seatrium’s and Black & Veatch’s minority stakes in the FLNG Hilli, including 5.45% common units, 10.9% Series A shares, and 10.9% Series B shares.

The total transaction value is $90.2 million, comprising $59.9 million in equity and $30.3 million as a pro-rata share of the existing FLNG Hilli debt facility.

This acquisition represents approximately 8% of the full FLNG capacity.

Golar’s increased ownership will take full economic effect starting January 1, 2025.

The FLNG Hilli is contracted to Perenco in Cameroon until July 2026, after which it is planned to relocate to Argentina under a 20-year agreement with Southern Energy, a consortium of leading Argentine natural gas producers.

The Southern Energy contract is contingent on conditions such as obtaining an export license, completing an environmental assessment, and a Final Investment Decision by Southern Energy.

Since commencing operations in 2018, the FLNG Hilli has achieved global-leading uptime, delivering 124 LNG cargoes and offloading over 8.5 million tons of LNG.

Additionally, Golar LNG and Seatrium have resolved outstanding items, including a $7 million payment by Golar to Seatrium for a Hilli Train 3 utilization bonus and historical work on the former Golar Gandria LNGC.

Following these settlements, no further contractual obligations regarding existing assets remain between Golar and Seatrium.

Golar CEO Karl-Fredrik Staubo said, “Golar is pleased to take full ownership of FLNG Hilli. The increased ownership will give immediate cash flow accretion and is expected to add approximately $0.5bn of Adjusted EBITDA backlog.”

Investors can gain exposure to the stock via Exchange Traded Concepts Trust Range Global LNG Ecosystem Index ETF LNGZ and Invesco Oil & Gas Services ETF PXJ.

Price Action: GLNG shares are up 0.62% at $42.10 premarket at the last check on Tuesday.

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