20-F: Golar LNG Reports Full Year 2024 Results, Highlights FLNG Expansion and Developments

Sentiment:

Annual Results 27 March 2025 4:06 PM

Golar LNG's 20-F filing summarizes the company's strategic shift towards floating liquefaction operations, highlighting key developments, financial performance, and risk factors for the fiscal year ended December 31, 2024.

Delay expectedSignificant delays to floating liquefaction natural gas vessel (FLNG) commissioning works and the start of operations for our FLNG Gimi (FLNG Gimi ) could result in incremental costs to both parties to the LOA.

Capital raiseWe may be required to use cash from operations, incur additional borrowings or raise capital through the sale of debt or additional equity securities to fund the conversion.Our failure to obtain funds for future capital expenditures could impact our results of operations, cash flow, financial condition and growth prospects.

Summary

Golar LNG's 20-F filing details the company's focus on floating liquefaction operations and its strategic transformation since 2021.
Key developments include asset divestments, full ownership of FLNG Hilli, and execution of the MKII FLNG conversion EPC agreement.
The company divested LNG carriers, FSRUs, and listed equity holdings, generating significant net proceeds.
Golar acquired the remaining non-controlling interests in FLNG Hilli for $59.9 million and entered into definitive agreements with SESA for a 20-year deployment of FLNG Hilli in Argentina.
FLNG Gimi is undergoing commissioning, with commercial operations expected in the second quarter of 2025, unlocking approximately $4.3 billion Adjusted EBITDA backlog.
The company executed an EPC agreement with CIMC for the MKII FLNG, with a budgeted project cost of $2.2 billion and expected delivery in the fourth quarter of 2027.
As of December 31, 2024, the registrant had 104,534,703 outstanding common shares.
As of March 17, 2025, Golar has fully exited from its legacy shipping business.
In March 2025, we entered into finance lease agreements with a consortium of leading Chinese leasing companies for the refinancing of the existing FLNG Gimi debt facility.
In February 2025, we declared a dividend of $0.25 per share in respect of the three months ended December 31, 2024 to shareholders of record on March 11, 2025, which was paid on March 18, 2025.

Sentiment

Score: 7

Explanation: The document presents a mixed sentiment. While it highlights positive developments like FLNG expansion and strategic partnerships, it also acknowledges significant risks and challenges, including potential delays, market volatility, and financial obligations. The overall tone is cautiously optimistic.

Positives

Strategic shift towards FLNG operations is expected to drive future growth.
Divestment of non-core assets has strengthened the balance sheet.
Securing long-term contracts for FLNG Hilli and FLNG Gimi provides stable revenue streams.
Advancement of the MKII FLNG project positions the company for future opportunities.
The company is actively working to develop FLNG projects around the globe.
The company has a strong commitment to environmental innovation through its development of the land-based small-scale pilot flare to LNG (or F2X) technology.

Negatives

The company is exposed to volatility in SOFR and the derivative contracts we have entered into to hedge our exposures to fluctuations in interest rates could result in charges against our results of operations, being higher than market interest rates.
The company will have to make additional contributions to our pension scheme because it is underfunded.
The company is subject to the risks related to Macaw Energies' business which may not achieve anticipated profitability as expected or at all.
The company's equity method investments may not result in sufficient profitability to justify our investment, and could lead to future impairment.

Risks

Delays in FLNG Gimi commissioning could impact future cash flows.
Failure to meet conditions precedent for FLNG Hilli redeployment could result in increased downtime.
Geopolitical tensions, sanctions, and economic downturns could affect MKII FLNG conversion timelines and customer decisions.
The company is exposed to volatility in SOFR and the derivative contracts we have entered into to hedge our exposures to fluctuations in interest rates could result in charges against our results of operations, being higher than market interest rates.
The company is subject to the economic, political, social and other conditions in the jurisdictions in which we operate.
Failure to comply with the FCPA, the UK Bribery Act and other anti-bribery legislation in other jurisdictions could result in fines, criminal penalties, and contract terminations.
ESG and sustainability considerations may adversely impact our operations and markets.

Future Outlook

Golar LNG is well-positioned to pursue further FLNG opportunities, with a focus on stranded gas reserves and competitive cost of production.

Management Comments

The expected COD of FLNG Gimi within the second quarter of 2025, which triggers the commencement of the 20-year LOA with bp, the announced definitive agreements on the redeployment of FLNG Hilli post July 2026 to Argentina for 20 years; and the execution of the EPC agreement for our third FLNG conversion, the MKII FLNG, demonstrate our continued advancement in the FLNG sector.
These developments strengthen our growth strategy, and we are well-positioned to pursue further FLNG opportunities moving forward.

Industry Context

The FLNG industry is in the early stages of development, with Golar LNG being a pioneering company in this sector. The company faces increasing competition from other providers of FLNG services.

Comparison to Industry Standards

Golar LNG is currently the only company with a proven track-record to deliver FLNG as a service to gas resource owners.
There are currently eight FLNGs on the water, including our two that provide liquefaction as a service (FLNG Hilli and FLNG Gimi ), five FLNGs being used to liquefy the resource holders own gas and one being used to liquefy gas to service its downstream portfolio.
Further, there are currently five FLNGs under conversion or construction, including our MKII FLNG.

Stakeholder Impact

Shareholders: Potential for increased returns through dividends and share repurchases, but also risk of share price volatility and dilution.
Employees: Potential for career growth and development in the expanding FLNG sector, but also risk of job losses due to asset divestments.
Customers: Access to reliable and cost-effective LNG liquefaction services.
Suppliers: Opportunities to provide goods and services to Golar LNG's projects, but also risk of contract terminations and payment delays.
Creditors: Risk of default on debt obligations, but also potential for increased returns through interest payments.

Next Steps

Complete commissioning activities for FLNG Gimi within the second quarter of 2025.
Meet conditions precedent for the redeployment of FLNG Hilli to Argentina.
Secure a suitable contract for the MKII FLNG.
Continue to develop FLNG projects around the globe.

Key Dates

Date	Description
May 10, 2001	Golar LNG Limited incorporated in Bermuda
December 12, 2002	Common shares began trading on the Nasdaq
July 2005	Audit Committee established
December 5, 2017	Council of the European Union approved and published Council conclusions containing a list of non-cooperative jurisdictions for tax purposes
December 17, 2018	House of Assembly of Bermuda passed the Economic Substance Act 2018 of Bermuda
December 31, 2018	Economic Substance Act became operative
January 2019	Economic Substance Regulations 2018 came into force in the Marshall Islands
February 26, 2019	Gimi MS Corporation entered into a LOA with bp
March 12, 2019	Council adopted a revised list of non-cooperative jurisdictions
October 24, 2019	$700 million facility agreement by and between Gimi MS Corporation, ABN Amro Bank N.V., Clifford Capital Pte. Ltd., ING Bank N.V. and Natixis
April 15, 2021	Entry into Omnibus Agreement with NFE
March 11, 2022	$300 million unsecured Norwegian Bond
March 2022	Listed 2021 Unsecured Bonds on the Oslo Brs
June 30, 2022	Share purchase agreement by and between Golar Management (Bermuda) Limited and Cool Company Ltd
January 2023	The European Unions CSRD, implemented in January 2023, significantly expands mandatory sustainability reporting for U.S. companies with operations in the EU.
May 25, 2023	Amendment to $300 million unsecured Norwegian Bond
March 6, 2024	The Commission released its final rule on climate-related disclosures on March 6, 2024, requiring the disclosure of certain climate-related risks and financial impacts, as well as GHG emissions.
September 17, 2024	MK II EPC Conversion Contract by and between Golar MK II Corporation and Yantai CIMC Raffles Offshore Ltd
December 27, 2023	Bermuda enacted the Corporate Income Tax Act (the CIT Act), which became effective on January 1, 2025.
January 1, 2025	Bermuda will impose a 15% corporate income tax on Bermuda organized entities and businesses that are constituent parts of multinational groups with annual revenue of at least 750 million
January 20, 2025	President Trump issued an Executive Order re-withdrawing from the Paris Agreement and from any other commitments made under the United Nations Convention on Climate Change.
February 11, 2025	The Commission Chairman released a public statement and notified the U.S. court hearing the challenges to the rule to delay scheduling argument in the case to allow the Commission to further deliberate the final rule and determine next steps.
February 2025	Sale of remaining Avenir shares
February 2025	Sale of Golar Arctic
February 2025	Declared dividend of $0.25 per share
March 2025	FLNG Gimi refinancing
March 18, 2025	Dividend paid

Keywords

FLNG, liquefaction, Golar LNG, Gimi, Hilli, MKII, LNG, vessel, EBITDA, conversion, project, contract, Argentina, SESA, BP

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