U.S. Markets closed

Golar LNG (GLNG) Inks Deal With BP for FLNG Gimi Construction

Zacks Equity Research
Ulta Beauty (ULTA) boasts a spectacular surprise history. The company is gaining from impressive loyalty program and omnichannel efforts, while escalated costs raise concerns.

Golar LNG Limited’s GLNG newly incorporated subsidiary — Gimi MS Corporation — has signed a 20-year Lease and Operate Agreement (LOA) with BP for the charter of an FLNG vessel, Gimi. The agreement is aimed at servicing the Greater Tortue Ahmeyim project.

The FLNG Unit, Gimi, is likely to begin production in 2022. It will be able to produce approximately 2.5 million tonnes of LNG per annum in the first phase of the Greater Tortue Ahmeyim project.

The FLNG Gimi has an estimated cost of nearly $1.3 billion, excluding financing costs. On acceptance under the contract, Golar LNG anticipates annual EBITDA (earnings before interest, tax, depreciation and amortization) of around $215 million or more.

Markedly, the recently announced LOA is Golar LNG’s second such FLNG tolling agreement. Earlier in May, FLNG Hilli Episeyo — the world’s first FLNG vessel developed as a conversion project from an LNG carrier — began production. With the onset of the Hilli Episeyo operation, Golar LNG has been witnessing a significant increase in free cash flow. Earnings from Hilli are expected to boost the company’s overall results in the fourth quarter, set to be released on Feb 27.

Zacks Rank & Stocks to Consider

Golar LNG has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Transportation sector are Frontline Ltd. FRO, Trinity Industries TRN and Expeditors International of Washington EXPD. While Frontline and Trinity sport a Zacks Rank #1 (Strong Buy), Expeditors carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Each of the companies has an impressive earnings history. While Frontline and Expeditors have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, Trinity has trumped estimates in three of the preceding four quarters.

Is Your Investment Advisor Fumbling Your Financial Future?

See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.”

Click to get it free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Trinity Industries, Inc. (TRN) : Free Stock Analysis Report
 
Golar LNG Limited (GLNG) : Free Stock Analysis Report
 
Frontline Ltd. (FRO) : Free Stock Analysis Report
 
Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research