Golar LNG Q2 2026 Earnings Report

Golar LNG EPS Results

• Actual EPS: N/A
• Consensus EPS: $0.55
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Golar LNG Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $131.30 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Golar LNG Announcement Details

• Quarter: Q2 2026
• Date: 8/13/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 8:00AM ET

Golar LNG (NASDAQ:GLNG) Ltd. (NASDAQ: GLNG) is a liquefied natural gas (LNG) infrastructure company focused primarily on floating liquefied natural gas (FLNG) solutions. Its business includes the development, ownership and operation of floating facilities that process natural gas offshore, liquefy it for export and transfer the resulting LNG to carriers for delivery to global markets.

The company’s FLNG vessels are converted from large LNG carriers or purpose-built to provide offshore liquefaction capacity. Golar’s Hilli Episeyo facility operates offshore Cameroon, where it processes gas from the Kribi field and produces LNG for international sale. The company has also been developing the Golar Gimi FLNG vessel for the Greater Tortue Ahmeyim gas project offshore Mauritania and Senegal.

Golar LNG historically participated in LNG shipping and floating storage and regasification activities, but its strategy has increasingly centered on FLNG infrastructure. Through its projects and partnerships, the company serves international energy markets by helping monetize offshore natural gas resources in regions where onshore liquefaction infrastructure may be limited.

Golar LNG Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Golar ordered its fourth FLNG unit, a Mark II conversion targeted for delivery in 2029, increasing controlled liquefaction capacity by 41% to more than 12 million tonnes per year. The company also secured an option for a fifth unit at CIMC Raffles and signed an LOI with Seatrium that could support growth to more than seven units.
• Positive Sentiment: Q2 operating performance remained strong, with revenue of $130 million, EBITDA up 20% quarter over quarter to $127 million, and Gimi producing 15% above its contractual level. Hilli completed its Cameroon contract with 100% economic uptime, while the company maintained its $0.25-per-share quarterly dividend.
• Positive Sentiment: Management expects annual run-rate EBITDA of approximately $800 million by 2028 from the existing fleet, potentially rising above $1.2 billion by 2030 if FLNG number four secures charter terms comparable to Esperanza. LNG-linked earnings provide additional upside, with management estimating that current forward prices could add up to $500 million per year during the first three years of Sessa operations.
• Negative Sentiment: The fourth FLNG’s estimated delivered cost is approximately $2.45 billion, up about 10% from Esperanza’s $2.2 billion budget because of inflation in long-lead equipment, steel prices, and currency movements. The unit has not yet secured a long-term charter, and Golar said it will not order further units until it has clear charter visibility.
• Neutral Sentiment: Golar reported approximately $1.5 billion of available liquidity, including a new undrawn $600 million revolving facility, and sees up to $2.3 billion of potential liquidity from asset-level financing. However, the strategic review remains ongoing, with management providing no expected completion date or further details.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Golar LNG Limited second quarter 2026 webcast and conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question-and-answer session. To ask a question during the session, you need to press star one one on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Karl Fredrik Staubo, CEO. Your line is open, please go ahead.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Thank you, operator. Good morning and welcome to Golar LNG's Q2 2026 earnings results presentation. My name is Karl Fredrik Staubo, I am the CEO of Golar, and I am accompanied today by our CFO, Eduardo Maranhão, to present this quarter's results. Before we get into the presentation, please note the forward-looking statements on slide two. Starting on slide three, we start with an exciting announcement. Overnight, we signed our fourth FLNG unit, which is another Mark II FLNG to be constructed at CIMC Raffles shipyard in China. That is the same shipyard already constructing our existing Mark II FLNG on order. The fourth FLNG order will deliver within 2029 and be the earliest available FLNG capacity globally. The order has been placed on the back of strong interest from prospective charters, as well as Golar's stated policy of adding additional FLNG capacity once the existing fleet has secured long-term charter commitments.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Across Hilli, Gimi, and the Mark II under construction, now named the FLNG Esperanza, Golar has a total EBITDA backlog of $17 billion before commodity upside and before a charter on the fourth FLNG unit. During the quarter, Hilli completed her eight-year contract for Perenco offshore Cameroon with 100% economic uptime for the life of the contract. Gimi overproduced 15% versus contractual volume, and the FLNG Esperanza remains on time and on budget. As part of the firm order for our fourth FLNG, we have also secured an option for an incremental Mark II FLNG with CIMC Raffles, i.e. an option unit. Today, we also announce a letter of intent with Seatrium Shipyard in Singapore for further incremental growth units utilizing our Mark I or Mark II design. We will provide further color on our growth ambitions later in the presentation.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Our liquidity stands at approximately $1.5 billion, inclusive of the $600 million revolving credit facility secured during Q2. Turning to slide four, we highlight our long-term charter contracts with Hilli, Gimi, and Esperanza contracted through 2045, and with a total EBITDA backlog of $17 billion before commodity upside and inflationary adjustments. With our fourth FLNG order, we see potential to meaningfully increase our earnings capacity, and will now elaborate on that on slide five. Today's announced order marks a 41% increase in Golar-controlled liquefaction capacity, increasing our total fleet capacity from 8.6 million tonnes to more than 12 million tonnes on a fully delivered basis. Assuming that we can achieve contractual terms in line with those achieved for Esperanza last year, we see potential for a 50% increase in our earnings capacity.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Our fourth unit is also expected to bring diversification of our earnings backlog, both with regards to charter counterpart as well as geographical exposure. Today's announced order will also be the world's earliest available liquefaction capacity, at least one to two years ahead of any alternatives. This again will drive charter interest in the unit. The incremental options, both on CIMC and through the LOI with Seatrium, create a replicable model and a capacity to meet some of the demand we see for FLNG deployments. On slide six, we lay out the overview of the FLNG industry by owner. With our fourth order, we now regain the position as the market leading owner of FLNG capacity, with number of units at par with Eni, but higher in terms of controlled liquefaction capacity.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

We expect to see another one to three FLNG orders from the existing owners on this page within the next 6-12 months, further building on our thesis that the FLNG market will see similar development to that of the FPSO industry, which started in 1985 and now has grown to more than 250 units globally. Golar maintains the position as the only proven provider of FLNG as a service. Turning to slide seven, we have laid out the same overview of the FLNG units globally, but here divided by the shipyard of construction. As you can clearly see from the slide, Samsung is the market leader for delivery of FLNGs. Wison shipyard in China has also built three new builds and continue to actively market new build FLNGs. Hanwha Ocean delivered one unit in 2016 and do not have near-term capacity to add additional units.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Two shipyards on the far right, both Seatrium and CIMC, have only ever built units for Golar and only done conversions. The way we see the market today, we do not expect other players actively pursuing conversion candidates, hence, they are focused on Samsung or Wison. Based on conversations with both shipyards, we believe Samsung is, at the very earliest, able to deliver incremental capacity sometime in 2031. We do expect Wison to be in prime position to win two large FLNG units in the relatively near future, and then they will also be spoken for well into the 2030s. Hence, the way we see the market right now, we believe the only incremental capacity that can be added with relatively near-term delivery is Golar conversions at Seatrium and CIMC. In addition to yard capacity, we see significant pressure on critical long-lead equipment.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Equipment like turbines, dual fuel engine, steam generators, and cold boxes see significant competition from other industries, including AI data centers, shipbuilding, and the aircraft industry. Hence, further pressure on these long leads further drives lead times for incremental orders. Therefore, we believe today's announcements, both of a firm order number four, an option for another unit at CIMC, as well as an LOI with Seatrium, secures Golar with a growth trajectory to capture market opportunities ahead of competition. We will remain with our policy of only having one open vessel at the time. As soon as we lock in the contract for number four, we are then likely to proceed at number five, but we have no ambition to overextend.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Again, this is furthermore in line with our announced strategy and also strategic review that we are looking at alternatives to accelerate our FLNG growth, and this speaks to that statement. Turning to slide eight and an overview of the LNG industry and what's going on in the market as we see it. The industry is set to grow around 40% between 2026 and 2031. As stated on our Q1 call, the two largest exporters in the world, U.S. and Qatar, are at the same time expected to increase their market share from 40% to 53% of global supply. Hence, as much as we see a growing market, we see very significant increase in supply concentration. Turning to the middle graph, geopolitical events make such concentration with increasing uncertainty for off-takers.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

The world's second-largest exporter of LNG, Qatar, was directly hit in military action during Middle East events, and the Ras Laffan liquefaction plant has estimates that they will be out, we are around 17 million tonnes out of a total capacity of 88 million tonnes for at least three to five years. We therefore see a need for the global LNG market to further diversify its supply. This is where we think FLNG will play a vital role. On the graph on the far right, you can see the location of FLNG projects globally. Six of today's exporters would not have been exporters if it weren't for FLNG technology. Where Golar operates, we represent the only export facility. That's true for Mauritania, Senegal. It will be true for Argentina, and it was true for Cameroon before we left the country.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Significant proven gas reserves remain stranded, which creates further opportunities for FLNG-led LNG supply diversification. Turning to Q2 and recent highlights and developments. As stated during the quarter, Gimi delivered 15% above its contractual day rate with the 41st cargo delivered. Hilli ended its eight-year contract in Cameroon with 100% economic uptime since contract startup and 156 cargoes delivered over the eight years. The unit is now in transit to Singapore for modifications ahead of its 20-year contract in Argentina. SESA officially named the Mark II under construction the FLNG Esperanza. We secured a $600 million revolving credit facility. We signed the fourth FLNG order, and through the EPC for number four and the LOI with Seatrium, we made a pathway to increase the fleet to over seven units. Turning to slide 11 with a focus on Hilli.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

On July 26th, Golar delivered its final cargo under our contract with Perenco Offshore Cameroon. We're extremely proud to see the unit have 100% economic uptime since startup. We're further pleased to see that the redeployment progress as planned. We exited the country and are in transit according to schedule. Once the modification work has completed, we will sail to Argentina, where we will start a contract in the second half of next year, where we will generate $285 million of annual EBITDA before further commodity offset. On slide 12, we would like to extend our gratitude and thankfulness to our partners, SNH and Perenco, for solid cooperation over eight years in Cameroon. In addition to LNG export, the project has created meaningful value to the local economy and people. Golar's operations employed more than 100% Cameroonians or more than 40% local content on board the unit.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

In addition to significant scholarship and courses, we have spent $80 million in local procurement and generated more than $1.5 billion in cash earnings to Cameroonian state interests. We have also voluntarily invested in critical infrastructure in-country, such as water holes, streetlights, school renovations, new sport centers, et cetera. We are motivated to work together again on potential gas monetizations in Cameroon and hope to be back in the near future. Turning to slide 13 and the Gimi. Gimi continues to produce above contractual levels. During the quarter, we produced 15% above the contracted capacity. That is despite the fact that we are coming into summer months and liquefaction plants are sensitive to both ambient and water temperature. Hence, we are extremely pleased with this performance. We do expect to see continued impact of high temperatures during Q3 before we see improved performance when we enter the winter months.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Over the year, we do expect the unit to produce meaningfully above the contractual capacity. Turning to FLNG 3, the Esperanza project remains on schedule and on budget. We are now 74% complete on the conversion progress, with more than 15 million man-hours completed without lost time incidents. The unit remains on track for sail away by year-end 2027, and to start operations in Argentina in the second half of 2028. Today, we have spent around $1.3 billion in cash equity into the conversion project out of a total budget of $2.2 billion. On slide 15, we are also progressing the required infrastructure in Argentina. SESA, our contract counterpart, in which Golar is a 10% shareholder, are now progressing critical infrastructure, including pipeline connections required for the startup, warehouse for operations support, supply boats, feeder vessels, and crew vessel, and we are also marketing the LNG offtake.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

The first 2 million tonnes of the total 6 million tonnes has been sold to Securing Energy for Europe, and we have now seen multiple offtakers bidding for the next 4 million tonnes, and we expect more offtake to conclude before year-end. Turning to slide 16, we have now confirmed our final investment decision for our fourth FLNG unit. The unit will be similar to the Esperanza currently under construction. The total CapEx budget has increased on the back of inflationary pressure, in particular for long-lead equipment globally. We have a CapEx budget now of around $2.45 billion versus around $2.2 billion for the Esperanza.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Even with this approximate 10% increase in cost, we see this as highly competitive, both compared to an FLNG new build and certainly in relation to the cost inflation observed on other offshore and shipping assets globally in the course of the last two years, which have grown meaningfully more than 10%. We expect significant synergies to be realized from building a repeat design and from having two units with overlapping construction at the same shipyard. We have secured a donor vessel for the conversion, and we are now in advanced discussions for long-term employment for the units. We do not expect to add additional units until we have clear visibility on a long-term charter for the unit now ordered. However, once we do, we turn to slide 17 and we have a very clear path as to how we may grow beyond unit number four.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Firstly, the order we placed overnight includes an option for a third Mark II FLNG at CIMC Raffles in Yantai, China. As earlier stated, we have also signed an LOI with Seatrium. Seatrium is the shipyard that constructed both the Hilli and Gimi, and also the shipyard that will conduct the Hilli modification work this year and next year. That LOI reserves slot reservations for either a Mark I or a Mark II design FLNG. In addition to the shipyard capacity, we have secured options for incremental long-lead equipment. We have identified and are working to secure additional donor vessels, and we are certainly advancing charter discussions for long-term employment with multiple counterparts. With the agreement signed today, Golar is laying out the groundwork for accelerated FLNG growth in the years to come. I will now hand the call over to Eduardo to take us through group results.

[Eduardo Maranhão, CFO at Golar LNG Limited]

Thank you, Karl, and good morning, everyone. Moving to slide 19. Q2 was another strong quarter for Golar, with continued operational performance across our FLNG fleets and a meaningful increase in EBITDA. Total operating revenue was $130 million in the quarter, with FLNG Gimi continuing to perform above contractual levels, delivering earnings approximately 15% above contracted base rate during Q2. We also completed the final legacy O&M contract relating to the FSRU Italis LNG, further completing our transition into a pure-play FLNG infrastructure company. EBITDA increased approximately 20% quarter-on-quarter to $127 million, compared to $106 million in Q1, primarily driven by higher commodity-linked earnings from Hilli. Hilli generated $37 million of commodity-linked earnings during the quarter, compared to $10 million in Q1, demonstrating once again the meaningful commodity upside embedded within our contracted earnings base.

[Eduardo Maranhão, CFO at Golar LNG Limited]

Net income was $56 million in the quarter, bringing year-to-date net income to $158 million. Consistent with our capital allocation framework, we have declared another quarterly dividend of $0.25 per share in Q2. Now moving to slide 20. Our balance sheet continues to provide substantial flexibility to fund the next phase of FLNG growth. At quarter end, total cash stood at approximately $900 million, and net interest in bearing debt was approximately $1.8 billion. In July, we further strengthened our liquidity position by closing a new $600 million revolving credit facility, which currently remains undrawn. Including the RCF, we have approximately $1.5 billion of available liquidity. At the same time, we have now equity-funded approximately $1.3 billion of the FLNG Esperanza conversion, leaving significant embedded financing capacity across our asset base.

[Eduardo Maranhão, CFO at Golar LNG Limited]

As illustrated on the right, optimizing the financing of Hilli and locking long-term financing for Esperanza could release approximately $2.3 billion of incremental liquidity. Discussions on both transactions are advancing. Together with our existing liquidity, operating cash flows, and potential proceeds from asset level financings, that will provide substantial capacity to fund FLNG number four, while preserving balance sheet flexibility for further growth, as explained by Karl. The timing in terms of FLNG number four asset level financing will ultimately be aligned with each long-term charter and our broader FLNG growth opportunities. Now moving to slide 21. I would like now to spend a moment on this slide here to talk about the commodity link component of our earnings, which are becoming increasingly relevant given the strength in the LNG price environment. Hilli provides a useful demonstration of the value of this structure.

[Eduardo Maranhão, CFO at Golar LNG Limited]

Over its eight-year contract in Cameroon, Hilli generated over $650 million of commodity-linked earnings before all the hedging proceeds which we achieved during that period. Our contracts in Argentina also give us meaningful upside participation. Under the Hilli and Esperanza charters, Golar receives a commodity-linked fee equivalent to 25% of FOB prices above $8 per MMBtu, while our 10% ownership in SESA provides additional commodity exposure. As we previously highlighted, every $1 per MMBtu above $8 can generate up to approximately $100 million of incremental annual earnings to Golar. Importantly, LNG offtake indices and forward prices have strengthened materially since earlier this year. Based on current and forward pricing, we estimate that this movement could increase the value of our commodity exposure by up to $500 million per year during the first three years of SESA operations.

[Eduardo Maranhão, CFO at Golar LNG Limited]

While forward market liquidity naturally reduces further out in the curve, the important point here is that this upside sits on top of our long-term contracted earnings base. If we now turn to slide 22. This slide brings the two key components of our model, a highly visible contracted earnings base and a significant commodity-linked upside. With Gimi, Hilli, and Esperanza fully operational, we expect annual run rate EBITDA of approximately $800 million by 2028 before commodity upside and inflation adjustments. If FLNG number 4 is contracted on terms broadly comparable to Esperanza, annual EBITDA has the potential to increase by approximately 50% to more than $1.2 billion by 2030. Importantly, that remains the base contracted earnings. On top of that, our Hilli, Esperanza, and SESA exposure provides meaningful participation in LNG prices.

[Eduardo Maranhão, CFO at Golar LNG Limited]

At $8 per MMBtu, as you see on the graph, we would expect annual EBITDA of more than $1.2 billion. At $10, this increases to $1.4 billion, while at $15, which is the current forward prices for next year, that would imply approximately $1.9 billion in EBITDA to Golar. To illustrate the embedded upside potential, if we apply the LNG pricing that we saw in 2022, we would see potential annual EBITDA approaching $4 billion. The key takeaway is that we have a highly visible contracted earnings base capable of exceeding $1.2 billion annually with our FLNG number 4, together with substantial additional upside if LNG markets remain strong. Now turning to slide 23. One of the key attractions of FLNG is that it provides buyers with geographically diversified LNG supply while offering very compelling economics to reserve owners.

[Eduardo Maranhão, CFO at Golar LNG Limited]

The illustration on the left shows the economics for a 3.5 MTPA Mark II FLNG based on current forward LNG prices. Including upstream feedstock gas, the cost of liquefaction, shipping, and regas, we estimate an all-in delivered LNG cost of under $8 per MMBtu. If you compare that to a one-year forward LNG price of approximately $15 per MMBtu, this leaves a very significant margin for the charterer. At approximately 90% utilization, a 3.5 MTPA FLNG would deliver around 50 cargoes per year. On these assumptions, that translates into approximately $1.3 billion of annual operating margin for the charterer or around $25 million per cargo. Importantly, these economics come together with the strategic benefits of FLNG. Shorter time to market, access to geographically diversified gas resources, and reduced dependence on a limited number of large onshore LNG supply locations.

[Eduardo Maranhão, CFO at Golar LNG Limited]

This combination of attractive economics and supply diversification provides a compelling proposition for prospective FLNG charterers. In summary, Q2 was another strong quarter for us. We continue to deliver operationally. Our contracted earnings base provides significant long-term visibility. Commodity exposure offers substantial upside, and our balance sheet provides the capacity to fund the next phase of FLNG growth. With attractive economics supporting demand for additional units, we believe we are extremely well-positioned for the opportunities ahead. With that, I will hand the call back to you, Karl.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Thank you, Eduardo. Turning to slide 25 to summarize. Golar is the leading global FLNG player, controlling a fleet of 12.1 million tonnes per annum. Through our operations to date, we have delivered 100% economic uptime and delivered 197 LNG cargoes. Our backlog stands at $17 billion before commodity upside and inflationary adjustments, and with further upside in a potential charter for our fourth FLNG unit announced today. Assuming we can fix that unit in line with our last fixture last year, we have a potential to grow our annual earnings by 50% or to north of $1.2 billion by 2030, before commodity upside and inflationary adjustments. We see that FLNGs is an increasingly relevant source of global energy security and supply diversification.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

We are strategically positioned for growth, and with the announcements today, both with CIMC and Seatrium, we are well-positioned to capture the market opportunity significantly ahead of any incremental competition from alternative suppliers. We maintain a disciplined capital allocation focused on shareholder returns, and we still have capacity under our share buyback program. We continue our quarterly dividend with significant capacity for further growth as the fleet deliver to the long-term contracts. With that, I would like to hand the call over to the operator for any questions.

[Operator]

Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one and one again. To ensure everyone has the opportunity to ask the question today, please limit yourself just to two questions at a time. Now we are going to take our first question. The question comes line of John Mackay from Goldman Sachs. Your line is open. Please ask a question.

[John Mackay, Analyst at Goldman Sachs]

Hey, good morning, guys. Thank you for the time and congrats on the fourth vessel announcement. I wanted to pick up on a couple of things you have been talking about. Maybe can you just walk us through the path to commercializing that vessel and signing a customer? You talked about maybe framing up the economics on the last vessel, but maybe broadly talk about target return profiles in this context.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Yeah. Hi, John. If you follow the sequencing of both our previous speculative orders and our announcements year-to-date, we have been focused on evolving the charter opportunities to narrow down the design. We were contemplating either a Mark I or Mark II. With the visibility we now have, we see the best value proposition to be a Mark II order, which is why we ordered that one. We expect them to further narrow down the charter opportunities and to secure a long-term charter for the unit where we maintain a 20-year duration plus-minus. We remain with our guidance in the 5x-6x CapEx-to-EBITDA range.

[John Mackay, Analyst at Goldman Sachs]

Just to clarify that, how should we think about the remaining timeline and milestones for us to watch for signing the customer deal?

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

There are no standard process for fixing an FLNG because the only ones who have ever done them as a service is Golar, and they have all been quite different, to be honest. The typical first step is a signing of either a term sheet or a framework agreement that sets out the key commercials. Sometimes it is binding, sometimes it is not, but it is certainly a milestone if that is achieved. From there on, we will then evolve the term sheet or framework agreement into a full contract. The third step is typically then to lift all CPs thereafter, which are typically regulatory, both in terms of export license and the environmental license required. In certain countries which are not yet LNG exporters, you also need clarification on the tax regime.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

So three, call it key steps, signing of term sheet, signing of definitive contracts, and lastly, lifting of CPs.

[John Mackay, Analyst at Goldman Sachs]

All right. That is helpful. The second question from me, Karl, you mentioned the potential for seven vessels. I understand there is a couple moving pieces here, and the timeline, like you said, can move around. But maybe in a, let us say, a blue sky scenario, how would we think about pace of deployments and being able to get to that fleet of seven?

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

First off, it is on the yard capacity side. We have ordered unit number four today. We have an option to do unit. We will not commit to that being CIMC or Seatrium in that order, but for simplicity, unit number five then with a fixed option at CIMC and unit number six and seven at Seatrium. But it may not be that exact sequence. The fifth could be Seatrium and the sixth could be CIMC, if you understand. That is what we have already locked in today with the contract signed at CIMC and the LOI with Seatrium. In terms of sequencing, 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 are not considering ordering unit number five until we have clear visibility for a long-term contract on the fourth unit.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Once that is locked in, we would then proceed with the fifth, and we will continue to replicate that model as we grow. Once we secure long-term contracts, we will then attach asset level financing to the then de-risked FLNG and recycle that capital into the consequent unit.

[John Mackay, Analyst at Goldman Sachs]

All right. That is clear. I appreciate the time. Thank you.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Thank you.

[Operator]

Thank you. Now we are going to take our next question. The question comes line of Alexander Bidwell from Webber Research & Advisory. Your line is open. Please ask your question.

[Alexander Bidwell, Analyst at Webber Research & Advisory]

Morning. I appreciate the time. So with the LOI with Seatrium covering either a Mark I or a Mark II, then you have the option for a third Mark II at CIMC, can you talk us through how you are thinking about shipyard selection for your next unit? Are there any differences between going with one or the other?

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

We've obviously built two units with Seatrium in the past, both of them being Mark I's. We are in process of building a Mark II with CIMC. Given that that unit is now 74% progress, we feel comfortable ordering the second unit there. When it comes to the next unit and the yard selection, we are clearly comfortable with both shipyards. It will come down to price, payment terms and delivery. To the extent that is relevant, there may be a charter preference for one yard over the other. But in general, it has to do with the price, payment terms and delivery. That's the key decision maker. Then if it's Mark I, it's very likely to be Seatrium anyway.

[Alexander Bidwell, Analyst at Webber Research & Advisory]

All right. Appreciate the color there. Then just for a quick follow-up, can you talk us through the, I guess the delta in budget between the FLNG Esperanza and the second Mark II conversion? I think it's $2.2 billion versus $2.45 billion.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Yes. 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. But if you look at some of the long leads typically have 40%-60% cost inflation. The fact that the overall unit is, call it, only up with 10%, obviously it's still meaningful, but we think that it's a testimony to the very significant work that we've done over the course of this year, both with regards to long lead items and negotiating with the shipyards. I would also like to highlight that when we say that this is the price, that's the all-in price, meaning it includes the EPC with the shipyard. It includes crew training, bunkering, and transport from yard site to contract site, and also the mooring system that we anticipate using.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

It's delivered cost to site.

[Alexander Bidwell, Analyst at Webber Research & Advisory]

All right. Thank you very much. Appreciate the color. I'll turn it back over.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Thank you.

[Operator]

Thank you. Now we're going to take our next question. The question comes from the line of Sherif Elmaghrabi from BTIG. Your line is open. Please ask your question.

[Sherif Elmaghrabi, Analyst at BTIG]

Hi, thanks. Good afternoon. First, very simply, what drove the decision to order a Mark II? Is that indicative of where conversations for charters have progressed? Because a quarter ago, you guys talked about pretty big range in terms of looking back at capacity.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

You broke up a bit at the end there, but I think we got the question. The primary reason for going with that unit is that's where we see the strongest charter engagement for relatively near-term employment of the unit. It's also where we see the most attractive CapEx per tonne and OpEx per MMBtu. I think both the economics to the client and the charter interest and the gas reserves in question at the moment, it's the most actively demanded unit we have, and therefore we felt comfortable doing that. Also on the back of the solid performance by the shipyard in constructing the Esperanza, which is now 74% complete.

[Sherif Elmaghrabi, Analyst at BTIG]

Got it. For the two to three options that you hold, can you tell us, and I apologize if I missed this, but can you tell us when do these additional options expire and the lead time for those units for when they would hit the water would be helpful.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

We don't want to go into details as to exactly when they expire, because commercially that's a little bit sensitive, and we think we can drive better value with holding that to ourselves for now. In terms of delivery, you're talking around 38 to 40 months, subject to which shipyard and what design.

[Sherif Elmaghrabi, Analyst at BTIG]

Very helpful. Thank you very much.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Thank you.

[Operator]

Thank you. Now we are going to take our next question. The question comes from the line of Chris Robertson from Deutsche Bank. Your line is open. Please ask your question.

[Chris Robertson, Analyst at Deutsche Bank]

Thank you, operator. Hello, Karl. Hello, Eduardo. Thanks for taking my questions.

[Eduardo Maranhão, CFO at Golar LNG Limited]

Hi, Chris.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Hi, Chris.

[Chris Robertson, Analyst at Deutsche Bank]

Just looking at the next opportunities here. Argentina was unique in the sense it had two FLNG units in one country. Are there any commercial opportunities here, as you've FID-ed the fourth one that a fifth vessel could go to the same locale in kind of a two-for-one deal or are the commercial opportunities you're looking at more geographically dispersed?

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Both. There are places where you can do both. There are people that only want one. But I think to give you an example, Argentina took two. But Argentina, if you look at the project with YPF, Eni, and XRG, they're also talking about adding two units there, both of them 6 million tonnes. So that's another 12 million tonnes. So obviously there's meaningful capacity to significantly boost Argentina. You have other countries like Mozambique, which are now taking two units from Eni. And there are several other countries like that where there's room to put multiple units. So the answer is, yes, we can definitely look at multiple deployments in certain geographies. But for us, it tends to be easiest to start with one and then build on that. But with the option package we now have, we can talk to both.

[Chris Robertson, Analyst at Deutsche Bank]

Great. Just as a follow-up, now that FID has been announced on the fourth unit and a clear pathway here for additional units, can you contextualize this around the strategic review that's still ongoing, and when do you expect that process to be concluded and any updates there?

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

As we stated in the announcement on the strategic review, the rationale for the strategic review was twofold. One, Board and Management believes there is a value discrepancy between public market pricing and potential other parties valuation of the existing business. The second, and at least equally important rationale, was to accelerate FLNG growth on the back of the market development that we see. I think today's announcements very clearly point out what we want to achieve in terms of FLNG market acceleration. When it comes to the strategic review, you are right that that is ongoing. As we have stated in the strategic review press release, we will not give any comments on the review itself, neither the outcome nor the timing, until we have material information to share or the Board has decided to call it off.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

We expect that to revert to the market with that in due course, but in the interim, we are not giving any specific comments to it.

[Chris Robertson, Analyst at Deutsche Bank]

Got it. If I could ask one follow-up question. Just to reiterate the current guidance around Hilli and it going to the yard, is it the same timeline, same budget, CapEx budget for the refurb and redeployment?

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

I am not sure if I understood it. The refurb budget is around $350 million from the day we depart Cameroon until the day we arrive in Argentina or, and well into commission in Argentina.

[Chris Robertson, Analyst at Deutsche Bank]

All right. That's clear. Thank you.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Thank you.

[Operator]

Now we're going to take our next question. The question comes from the line of [Jonas Aachmann from Clarksons]. Your line is open. Please ask your question.

[Analyst at Clarksons]

Hey, Karl. Thank you for taking my question. I was just wondering about the schedule for the CapEx on the new FLNG unit to aim to take delivery of the unit by 2029, then how should we think about the sequence and timing of the CapEx related to that unit?

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Sorry, the CapEx on number four?

[Analyst at Clarksons]

Yes.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Okay. The CapEx on number four is meaningfully improved from the Esperanza. That has been part of negotiating the yard contract. To be fair, it is quite offsetting on the 10% cost increase that we have meaningfully lower capital outlays, in particular, in the first two years of the construction period, which is the same period of time until the Esperanza is truly operational. The CapEx curve has been negotiated substantially lower than that of the Esperanza, but it is still a pay-as-you-go payment terms and not a shipyard fixed installment type or for traditional commercial ships.

[Analyst at Clarksons]

If I may, a follow-up on the optional units that you have secured or the options that you have secured. Will you start ordering long lead items for those and how far will you be willing to commit to, for example, long lead items on those units for the next couple of years?

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

The way it works is when we place the firm orders for unit number four, as part of that firm order, we then negotiated packages for a potential unit number five. For the majority of them at absolutely no incremental cost and some of them at a very low incremental cost. In total, for all of them, less than $1 million. That obviously has a time constraint. In many cases, that time constraint can be extended, but if you do go and extend the time constraint, you are likely to then get a later delivery slot because there is very significant pressure on these long lead items. But we are pleased to have obtained the options that we have obtained at very limited to no cost incremental to that of the order itself.

[Analyst at Clarksons]

Okay. Thank you very much. I hand it over.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Thank you, Jonas.

[Operator]

Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad. Now we are going to take our next question. The question comes from the line of Sunil Sibal from Seaport Global. Your line is open. Please ask your question.

[Sunil Sibal, Analyst at Seaport Global]

Yeah. Hi, good morning, and thanks for the time. I think you touched upon your potential counterparties for the fourth vessel. I was curious, how do you think about geographical as well as credit preferences for the fourth counterparty? Is there something specific we should be looking for as far as especially the credit quality of your fourth counterparty is concerned?

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

It's a good question, and to answer it is slightly different. Every time we have these calls, we get all of the same questions from investment banks and investors. This is an open call, so potential charters, shipyards, equipment suppliers, and many other people are listening to this call. So we weigh our words carefully. We are in advanced charter discussions in several different geographies. Some of them are to NOCs, some of them are to independents, and some of them are to IOCs. Subject to the credit quality of the counterpart, they are likely to demand slightly different contract structures. But that also then comes with at least different perceived risks, although I believe we have been very successful at structuring around such risks in the past. At the end of the day, an FLNG is paid by the client who buys the offtake gas.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

The good thing with LNG is that there are no bad credit buyers. There are typically countries, very big industrial groups or the world's largest traders that are offtakers there. So subject to where you operate, the contractual protections are the most important, but we do recognize that financeability increases if we charter to IOCs. But then again, as we've previously explained, they are less likely to share commodity upside and so forth. So at the end of the day, for us, it's a trade-off. What we look to are economic returns and of course, equity returns, and then leverage plays a part of that.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

But at the end of the day, we believe that the market position with the lowest CapEx per ton in the industry, the best operational performance, and the earliest delivery in a world with increasing geopolitical pressure for supply certainty puts us in a very unique position to drive value to Golar and its stakeholders.

[Sunil Sibal, Analyst at Seaport Global]

Okay, thanks for laying it out. Then one clarification. I know with your previous projections for the three vessel case, I think you are ultimately looking at the 3x-3.5x kind of a leverage once all the three units are up and running. Now that you're looking at a fourth one, should we be thinking about ultimate desired leverage in the same range, or do you think you could be a little bit more even aggressive in that range now that you're kind of diversifying the fleet and all that?

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

You are right that on a net debt-to-EBITDA ratio, that's where we are at the moment. As Eduardo explained, there's significant capacity to free up a few billion dollars of liquidity if we relever the Hilli and add asset level financing on the Esperanza. We've proven in the past with the financing of Gimi in November, December last year, that subject to contract counterpart and contract structure, we have done asset level financing at 5.5x. We don't want to overextend the balance sheet because we want capacity to continue to add attractive growth projects. But as we lock in more EBITDA backlog, we expect the ratio to not meaningfully change.

[Sunil Sibal, Analyst at Seaport Global]

Okay. Thank you.

[Operator]

Thank you. The speakers have no further questions for today. I would now like to hand the conference over to the management team for any closing remarks.

[Karl Fredrik Staubo, CEO at Golar LNG Limited]

Thank you all for dialing in today. We are very excited with today's announcement and development, and we look forward to speak to you again on the future development of the company as we continue to grow within the FLNG space. We wish you all a great day and hope to speak soon. Thank you.

[Operator]

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Participants

Executives

• Karl Fredrik Staubo, CEO
• Eduardo Maranhão, CFO

Analysts

• John Mackay, Analyst at Goldman Sachs
• Alexander Bidwell, Analyst at Webber Research & Advisory
• Sherif Elmaghrabi, Analyst at BTIG
• Chris Robertson, Analyst at Deutsche Bank
• Analyst at Clarksons
• Sunil Sibal, Analyst at Seaport Global