Golar chairman says FLNG industry set for ‘massive’ growth

Trøim revealed this during Golar’s first-quarter earnings call on Tuesday. He has not been on Golar’s earnings calls for ten years.

Golar currently has two operational floating LNG units, which were converted from LNG carriers, including the 2.7 mtpa FLNG Gimi, which is located at the GTA hub offshore Mauritania and Senegal, and the 2.4 mtpa FLNG Hilli, which is currently located offshore Cameroon.

Pan American Energy, Golar LNG, YPF, Pampa Energia, and Harbour Energy recently took a final investment decision for the Southern Energy floating LNG export project in Argentina.

Under a 20-year charter deal, the FLNG Hilli will work for Southern Energy (SESA) offshore Argentina.

In addition, Golar and SESA have signed definitive agreements for a 20-year charter for the 3.5 mtpa MKII FLNG, currently under conversion at CIMC Raffles shipyard in Yantai, China. This charter remains subject to FID.

As part of the $1.6 billion EPC agreement signed with CIMC Raffles last year, Golar has also secured an option for a second MK II FLNG conversion slot at CIMC for delivery within 2028.

This expected delivery is subject to the unit being ordered in 2025.

Golar has three different FLNG designs: the MK I, MK II, and MK III, which is a newbuild design.

These range in LNG liquefaction capacity from around 2 mtpa up to a maximum of 5.4 mtpa for MK III.

Seatrium built the MK I units, while Golar worked with Samsung Heavy on the MK III design.

Growth

Trøim said during the call that Golar’s board “wants to continue to build this company.”

He said that Golar has confirmation of the MKII FLNG, which is set for final approval “later this year.”

“We also have the possibility of concluding a commitment for vessel four and also maybe vessel five within this year. We’ll see what. We’re certainly going to build more,” he said.

“We are undoubtedly having the (leadership position) in a business set for massive growth,” he said.

“And I think if you look into what happened in the FPSO industry, it grew effectively from two units to 250 units in 40 years. I think we will see a very similar track here. And the reason is the same. It is a lower-cost option to build floating units than land-based LNG terminals,” he said.

New orders

Golar is working with shipyards and topside equipment providers to firm-up prices and schedules for potential ordering of additional unit(s) within 2025.

During the call, Golar’s CEO Karl Fredrik-Staubo also provided further color regarding the potential orders of future units and the construction period.

“For the MK I and II, which are both based on conversions, the conversion time is approximately three years,” Staubo said.

“For the MK III, because you start from scratch, you need to add another year. So approximately four years,” he said.

“The reason why we’re ramping up the shipyard activity at the moment is to safeguard that three-year construction time, and at some point, you should expect to see long leads also being included in such preparations,” he said.

Answering a question about the demand for vessel capacities, he said there are “more commercial opportunities for the smaller sizes and then somewhat fewer for the larger.”

“However, for some of these larger opportunities, you may also need this level of size to make development economics. So what you should expect to see is that we are right now progressing conversations or negotiations for all three different designs, and you could see us progressing with more than one ship this year,” he said.

“I think it’s also fair to say that there are several people that we have advanced stages of commercial negotiations with that are now left without a liquefier as the Argentinian contracts took both the Hilli and the MK II and as such, there’s no available FLNG. And those are obviously the counterparts that we are concentrating on from the commercial side right now,” he said.