Shares of Golar LNG climbed nearly 8% in the first hours of trading on Friday in New York after the Tor Olav Troim-backed company announced it had cut a deal to charter one of its floating LNG units for 20 years in Argentina.
The stock reached a 52-week high of $33.89 per share as trading volume in the first 90 minutes exceeded the average turnover for a full day, and this on a slow summer holiday weekend in New York.
Major catalyst
Deutsche Bank analyst Chris Robertson called the announcement a “major catalyst event”.
The FLNG Hilli will begin work at the Vaca Muerta shale formation in 2027 after wrapping up its current employment offshore Cameroon in the summer of 2026.
“We don’t believe this is a ‘sell the news’ type of announcement based on just how significant securing a 20-year contract is for this asset,” Robertson told clients.
“The news has positive implications outside of just Ebitda generation for the company which include: one, shows market demand for long-duration 20-year contracts for FLNG assets; two, shows that Golar’s assets can have operational life over 20 years; three, the contract leaves open the possibility for using a Mk II FLNG asset.”
In the last point, Robertson refers to new assets that potentially could be ordered this summer and be ready for work in 2028 by his estimate.
“Today’s news is a years-in-the-making positive catalyst event for the company. For several years, investors have been concerned with what would happen to the Hilli once it rolled off its current contract in mid-2026 and today’s news answers that question in a big — 20-year — way,” he wrote.
Deutsche Bank maintained a “buy” rating on the stock with a $43 price target.
Stifel analyst Ben Nolan also has a “buy” rating and said the development supports his sum-of-the-parts share valuation of $55 for the stock.
Nolan projects Golar shares will trade near $50 by the end of this year. Valuation could move closer to $75 per share by 2027 as cash flows begin to be realised, he wrote.
Like Robertson, Nolan projects the development will clinch the order of a Mk II FLNG unit.
“Big win for Golar shares,” he told clients.
The agreement also provides Golar with a 10% stake in Southern Energy, a joint venture with Pan American Energy for the purchase of natural gas, operations and sale and marketing of Argentinian LNG.
“We are excited to enter a partnership with Pan American Energy, one of the leading energy companies in Latin America,” chief executive Karl Staubo said.
“The project will provide an international outlet for Argentina’s vast and attractive natural gas reserves, creating value for Argentina and its gas stakeholders.
“The project expands Golar’s global footprint, with further growth potential.”
