On October 23, Golar LNG Limited announced that all conditions precedent and customary closing conditions in connection with the 20-year charter of Golar’s 3.5MTPA MKII FLNG to Southern Energy S.A. (“SESA”) in Argentina have been satisfied. This milestone follows the execution of definitive agreements announced on May 2nd, 2025, and the Final Investment Decision announced on August 6th, 2025.
The 20-year charter of the MKII FLNG solidifies $8 billion of net earnings backlog over 20 years, equivalent to $400 million in annual EBITDA to Golar, before commodity exposure and inflationary adjustments. In addition, the charter agreement includes attractive commodity exposure both in the FLNG commodity tariff component and through Golar’s 10% shareholding in SESA. The MKII FLNG will be deployed in the Gulf of San Matías, offshore Argentina, where it will operate in proximity to the FLNG Hilli.
The MKII FLNG, with a nameplate capacity of 3.5 MTPA, is currently undergoing conversion at CIMC Raffles Shipyard in Yantai, China. The unit is on schedule for delivery by year end 2027, with operations expected to commence in 2028. The total conversion budget is approximately $2.2 billion of which $1.0 billion has been spent to date, all capital expenditures funded through equity.
The project has received all key governmental approvals, including an unrestricted 30-year LNG export authorization in Argentina, and qualification as Strategic Investment under the Large Investments Incentive Regime (“RIGI”).
Golar’s CEO, Karl Fredrik Staubo commented: “Following today’s confirmation of the 20-year charter for the MKII FLNG in Argentina, each of Golar’s three existing FLNGs now holds 20 years of earnings visibility, representing a combined EBITDA backlog of $17 billion before attractive commodity exposure. We look forward to starting operations in Argentina and to continue the strong partnership with SESA and its shareholders.
Now that our existing fleet is fully contracted for the next 20+ years, we will increase our focus on new FLNG growth opportunities. Golar’s position as the only proven provider of FLNG as a service enables us to drive value for all stakeholders through attractive gas monetization solutions.”
It is understood that the MK II FLNG unit was converted from the 148,500-cubic-meter Moss-type LNG carrier Fuji LNG. With an overall length of approximately 390 meters and a width of 70 meters, it has a rated annual production capacity of 3.5 million tons. The total conversion budget for the project is approximately US$2.2 billion, of which US$1 billion has been spent. All capital expenditures were financed through equity financing.
In September 2024, CIMC Raffles and Golar LNG signed a $1.6 billion FLNG EPC conversion contract for the Fuji LNG. The vessel is currently undergoing conversion at the shipyard and is scheduled for delivery in the fourth quarter of 2027. It is expected to commence operations in 2028 and will be deployed in San Matías Bay, adjacent to the Hilli FLNG, which is also leased by Southern Energy for 20 years. The combined designed capacity of the two FLNG units is 5.95 million tons per year.
With all existing FLNG units under long-term charter agreements, Golar LNG recently announced it is securing shipyard slots and long-lead equipment for its planned fourth FLNG unit. The company is currently negotiating potential design and construction schedules with CIMC Raffles, Samsung Heavy Industries and Seatrium. Golar LNG’s current design portfolio includes MK I, MK II, and MK III FLNG units with production capacities ranging from 2 million to 5.4 million tons/year.
Currently, Golar LNG has not disclosed further details regarding the shipyard for its fourth FLNG unit. However, it is worth noting that Golar LNG holds an option order with CIMC Raffles.