Golar LNG cut at B. Riley on valuation, but LNG vessels seen critical in global LNG buildout

[Towing liquefied gas tanker. Transportation of hydrocarbons by sea.]
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Golar LNG (NASDAQ:GLNG [https://seekingalpha.com/symbol/GLNG]) -0.8% in Monday's trading as B. Riley downgraded the marine liquefied natural gas infrastructure company to Neutral from Buy with a $44.50 price target, citing valuation after the stock has jumped 8% in the past week and 34% in the past year.

B. Riley analyst Liam Burke said he believes floating LNG vessels will play a critical role in the buildout of global LNG product, and the FLNG value proposition is "compelling," noting that by facilitating natural gas production from undersea fields, FLNGs monetize what would normally be stranded assets.

Golar LNG (NASDAQ:GLNG [https://seekingalpha.com/symbol/GLNG]) is an "excellent operator and the only provider of FLNG as a service," Burke wrote, adding that in a very challenging operating environment, FLNG _Hilli_ has registered 100% up-time for its entire operating history, and Golar's second FLNG reached its commercial operations date in late Q2 - the COD triggered the start of a 20-year lease, generating $151M in annual adjusted EBITDA - and the company signed two attractive long-term agreements in Argentina.

The company's adjusted EBITDA backlog of $16.8B before commodity upside and inflationary adjustments includes $13.8B in Argentina for FLNG _Hilli_ and _MKII_ - both contracts are for 20-year durations - and anticipated capacity of the two FLNGs totals 5.95M metric tons/year and estimated utilization of 90%, Burke said, adding that _Hilli_ has historically run at a 100% utilization rate.

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