Golar LNG Secures $1.2 Billion Facility for FLNG Gimi Project
Financing package fully funds remaining capital needs for the floating LNG vessel, significantly de-risking a key growth asset for the company.
Golar LNG Limited (NASDAQ: GLNG) announced Tuesday the successful closing of a $1.2 billion debt facility, a move that fully finances the remaining capital expenditure for its floating liquefied natural gas (FLNG) vessel, Gimi.
The financing marks a pivotal milestone for the Bermuda-based company, removing a major financial hurdle and de-risking the execution of a cornerstone growth project. The asset-backed facility, which was drawn upon closing, represents a significant capital injection for Golar, equivalent to approximately one-third of its current market capitalization of roughly $3.6 billion.
Shares of Golar LNG reacted to the news in early trading, as investors processed the implications of the secured funding. The successful financing ensures the company has the necessary capital to complete the conversion and commissioning of the FLNG Gimi, which is central to its long-term strategy.
"This transaction represents a landmark financing for Golar, and a material de-risking of the Gimi project financing," the company stated in its official announcement. The facility was arranged with a consortium of international banks, signaling strong institutional confidence in the project's viability and Golar's operational track record.
The FLNG Gimi is contracted under a 20-year lease and operating agreement with BP, slated for deployment at the Greater Tortue Ahmeyim gas field off the coasts of Mauritania and Senegal. This long-term charter is expected to provide a stable and significant revenue stream for Golar once the vessel becomes operational, transforming the company's earnings profile.
Floating LNG technology allows for the liquefaction of natural gas at sea, offering a more flexible and often more cost-effective solution compared to traditional onshore facilities. Golar has been a pioneer in this sector, and the Gimi project is a critical test of its ability to deliver complex, large-scale energy infrastructure.
The financing package is structured to cover the remaining $800 million in capital costs for the vessel's conversion, with an additional $400 million available to refinance a portion of Golar's existing debt related to the project. This structure not only funds the final stages of development but also strengthens the company's overall balance sheet.
Prior to this announcement, Golar's stock has navigated a volatile energy market, with its 52-week trading range spanning from a low of $29.03 to a high of $45.68. The successful financing could provide a new floor for the stock by removing execution risk and clarifying the path to future cash flow.
Analysts have maintained a generally positive outlook on Golar, with a consensus target price of $51.31, suggesting significant upside from its current trading levels. The completion of the Gimi financing is likely to reinforce this bullish sentiment, as it validates a key component of the investment thesis for the company.
The successful debt raise stands in contrast to a broader market environment where securing large-scale project financing has become more challenging due to rising interest rates and economic uncertainty. Golar's ability to secure favorable terms underscores the perceived quality of the FLNG Gimi asset and its long-term contract with a supermajor like BP.
With financing now in place, the market's focus will shift to the final conversion and delivery timeline for the FLNG Gimi. Any updates on its operational readiness and sail-away date will be closely watched by investors as Golar moves from a development phase to an operational one, poised to capitalize on the global demand for liquefied natural gas.