Golar LNG GLNG,a Bermuda-based company, is set to enhance its floating LNG production capabilities. The company has signed an Engineering, Procurement and Construction (“EPC”) agreement worth $1.6 billion with CIMC Raffles for a new MK II Floating LNG Production (“FLNG”) vessel. The vessel will have an annual liquefaction capacity of 3.5 million tons of LNG per annum.This agreement represents a strategic investment in advanced technology and modular construction, which should enhance operational efficiency.
Under this agreement, GLNG’s partner, Black & Veatch, will employ its licensed PRICO technology to conduct detailed engineering and process design. It will specify and procure topside equipment and provide commissioning support for the FLNG’s topsides and liquefaction process. This collaboration leverages Black & Veatch's successful track record with Golar’s previous FLNG projects, ensuring a strong foundation for this new venture.
The Golar MK II design builds on the MK I design from the FLNG Hilli and FLNG Gimi and involves converting the existing LNG carrier Fuji LNG, which has a storage capacity of 148,500 m³. The design evolution from the MK I to the MK II, using the existing Fuji LNG carrier, demonstrates Golar's commitment to innovation while maximizing existing assets.
The total EPC price is $1.6 billion, with an overall budget for the MK II conversion at $2.2 billion, covering various costs, including yard supervision and initial bunker supply. Golar has already invested $0.3 billion to date, with 63% of the engineering and long lead items completed.
The MK II FLNG vessel is expected to be delivered in the fourth quarter of 2027. Moreover, Golar has secured an option for a second MK II FLNG conversion with CIMC, with a potential delivery in 2028. This EPC contract follows Golar's recent agreements with Pan American Energy, which include a 20-year FLNG vessel deployment in Argentina.
Golar LNG is the sole provider of FLNG as a service. GLNG ranks first in terms of FLNG capacity. The FLNG market is growing due to its economic viability and is expected to display significant capacity growth, particularly in Africa and North America. Given the bright prospects associated with FLNG, the company’s decision to enhance its FLNG capabilities is highly prudent.
Driven by the robust FLNG market, GLNG shares have rallied 48% over the past year, surpassing the industry’s 31.5% growth.
Image Source: Zacks Investment Research
Zacks Rank
GLNG currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include C.H. Robinson Worldwide CHRW and Westinghouse Air Brake Technologies WAB.
C.H. Robinson Worldwide currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. CHRW has an expected earnings growth rate of 25.2% for the current year.
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 18.3% in the past year.
WAB sports a Zacks Rank #1 at present and has an expected earnings growth rate of 26% for the current year.
The company has a discouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. The average beat is 11.8%. Shares of WAB have climbed 66.4% in the past year.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpC.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
Westinghouse Air Brake Technologies Corporation (WAB) : Free Stock Analysis Report
Golar LNG Limited (GLNG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
