Saturday, September 27, 2014

Golar LNG: It's All About The Long-Term Outlook

This article was originally published by Seeking Alpha on September 9, 2014

By Sarfaraz A. Khan

Summary: Golar LNG, along with its MLP Golar LNG Partners, is one of the leading shippers of LNG. Golar LNG has struggled due to the tough business environment, which will likely persist throughout the current year. Its long-term outlook, however, is really what this company is all about.

Previously, I talked about Cheniere Energy (NYSEMKT:LNG) which could turn into one of the earliest and biggest beneficiaries from the changing global LNG demand-supply landscape. This time, I will talk about another company which could also be one of the major beneficiaries of this trend.

The Norway-based Golar LNG (NASDAQ:GLNG), one of the world's leading independent owners and operators of LNG carrying vessels, has struggled with profitability and growth, partly due to the tough business environment and dropdown of assets to its master limited partnership, or MLP, Golar LNG Partners (NASDAQ:GMLP). Moreover, company is not seeing any meaningful uptake in demand in the near term. Its long-term outlook, however, looks way more interesting.

The C-corporation and the MLP own 17 LNG vessels. The partnership owns nine vessels, all of which are operating under long-term contracts that are responsible for 87% of the total revenues of the two entities. Golar LNG, on the other hand, owns the remaining eight vessels, most of which operate on spot or short-term availability.

Fleet Expansion

In addition to the ships currently under operation, the company also has nine vessels under construction of which eight will be delivered by early 2015, while the final vessel will be …. Read full article at Seeking Alpha.