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Golar LNG (GLNG) Expands Globally With Argentina FLNG Project
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Golar LNG Limited (GLNG - Free Report) has signed definitive agreements with Pan American Energy or PAE,a leading integrated energy company in Latin America that holds interests across the whole hydrocarbon value chain,to station a Floating Liquefied Natural Gas (“FLNG”) vessel in Argentina for 20 years. This FLNG project will monetize Argentine gas by utilizing the vast resources of the Vaca Muerta shale formation in the Neuquina Basin, the world's second-largest shale gas resource.
GLNG aims to start LNG exports by 2027, establishing Argentina as an LNG exporter. This strategic venture is underpinned by a solid commercial framework, including a Gas Sales Agreement from PAE for the supply of gas and an FLNG charter agreement with GLNG, which includes a base tariff and commodity exposure to LNG sales prices.
The project will utilize Golar’s FLNG Hilli, which has a nameplate capacity of 2.45 million tons per annum (mtpa). Nameplate capacity refers to the intended full-load sustained output of a facility. Thissetup will provide an equivalent net tariff of $2.6/mmBtu (based on 90% capacity utilization) with an additional commodity-linked pricing element. GLNG retains the flexibility to consider swapping for another suitable Golar FLNG unit.
The company will hold a 10% stake in Southern Energy S.A. (a joint venture with Pan American Energy) as part of the agreements. The JV focuseson the purchase of domestic natural gas, operations, and sale and marketing of LNG from Argentina.
GLNG envisions this initiative as the first phase of a potential multi-vessel project and anticipates that other major natural gas producers in Argentina will collaborate.
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 ink the long-term FLNG deal in Argentina is highly prudent.
Driven by the robust FLNG market, GLNG shares have rallied 46.2% year to date, easily surpassing its industry’s 18.9% growth.
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 128%. Shares of SkyWest have jumped 94.2% in the past year.
KEX holds a Zacks Rank #2 (Buy) at present andhas an expected earnings growth rate of 42.5% for the current year.
The company has an encouraging track record concerning the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 10.3%. Shares of Kirby have climbed 59.3% in the past year.
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Golar LNG (GLNG) Expands Globally With Argentina FLNG Project
Golar LNG Limited (GLNG - Free Report) has signed definitive agreements with Pan American Energy or PAE,a leading integrated energy company in Latin America that holds interests across the whole hydrocarbon value chain,to station a Floating Liquefied Natural Gas (“FLNG”) vessel in Argentina for 20 years. This FLNG project will monetize Argentine gas by utilizing the vast resources of the Vaca Muerta shale formation in the Neuquina Basin, the world's second-largest shale gas resource.
GLNG aims to start LNG exports by 2027, establishing Argentina as an LNG exporter. This strategic venture is underpinned by a solid commercial framework, including a Gas Sales Agreement from PAE for the supply of gas and an FLNG charter agreement with GLNG, which includes a base tariff and commodity exposure to LNG sales prices.
The project will utilize Golar’s FLNG Hilli, which has a nameplate capacity of 2.45 million tons per annum (mtpa). Nameplate capacity refers to the intended full-load sustained output of a facility. Thissetup will provide an equivalent net tariff of $2.6/mmBtu (based on 90% capacity utilization) with an additional commodity-linked pricing element. GLNG retains the flexibility to consider swapping for another suitable Golar FLNG unit.
The company will hold a 10% stake in Southern Energy S.A. (a joint venture with Pan American Energy) as part of the agreements. The JV focuseson the purchase of domestic natural gas, operations, and sale and marketing of LNG from Argentina.
GLNG envisions this initiative as the first phase of a potential multi-vessel project and anticipates that other major natural gas producers in Argentina will collaborate.
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 ink the long-term FLNG deal in Argentina is highly prudent.
Driven by the robust FLNG market, GLNG shares have rallied 46.2% year to date, easily surpassing its industry’s 18.9% 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 SkyWest (SKYW - Free Report) and Kirby Corporation (KEX - Free Report) .
SkyWest currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. SKYW has an expected earnings growth rate of 787% for the current year.
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 128%. Shares of SkyWest have jumped 94.2% in the past year.
KEX holds a Zacks Rank #2 (Buy) at present andhas an expected earnings growth rate of 42.5% for the current year.
The company has an encouraging track record concerning the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 10.3%. Shares of Kirby have climbed 59.3% in the past year.