Stock Analysis & Valuation Golar LNG Limited (0HDY.L)

• Previous Close: £40.16
• Sector Valuation Confidence Level: Low

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	10.90	-73
Intrinsic value (DCF)	17.56	-56
Graham-Dodd Method	5.20	-87
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Golar LNG Limited (LSE: 0HDY.L) is a leading player in the marine infrastructure sector for liquefied natural gas (LNG), specializing in the design, ownership, and operation of LNG carriers, Floating Liquefaction Natural Gas Vessels (FLNGs), and Floating Storage Regasification Units (FSRUs). Headquartered in Hamilton, Bermuda, the company operates a diversified fleet, including nine LNG carriers, one FSRU, and three FLNGs as of December 2021. Golar LNG plays a pivotal role in the global energy supply chain by enabling efficient LNG transportation and regasification, catering to the growing demand for cleaner energy solutions. With a strong presence in the Oil & Gas Energy sector, Golar LNG leverages its expertise in floating LNG infrastructure to capitalize on the transition toward natural gas as a bridge fuel in the decarbonization journey. The company’s strategic focus on FLNG and FSRU projects positions it as a key enabler of LNG market expansion, particularly in emerging markets lacking traditional onshore infrastructure.

Investment Summary

Golar LNG presents a compelling investment opportunity due to its niche focus on floating LNG infrastructure, which is increasingly vital in the global shift toward natural gas. The company’s diversified fleet and strategic projects in FLNG and FSRUs provide stable cash flows and growth potential. However, risks include exposure to volatile LNG prices, high capital expenditures, and geopolitical uncertainties in key operational regions. With a market cap of $3.93 billion, a beta of 0.611 indicating lower volatility relative to the market, and a dividend yield supported by a $1 per share payout, Golar LNG appeals to investors seeking exposure to the LNG sector with moderate risk. The company’s strong operating cash flow of $318.2 million (FY 2021) and manageable debt levels ($1.46 billion) further underscore its financial resilience.

Competitive Analysis

Golar LNG’s competitive advantage lies in its specialized focus on floating LNG infrastructure, a segment with high barriers to entry due to technical complexity and capital intensity. The company’s FLNG and FSRU assets are strategically positioned to serve regions with limited onshore LNG infrastructure, providing a first-mover advantage. Golar’s partnership with energy majors and its ability to repurpose existing vessels into FLNGs enhance cost efficiency and operational flexibility. However, competition is intensifying as global LNG demand grows. Larger players like Shell and TotalEnergies dominate the integrated LNG value chain, while niche competitors such as Flex LNG and Hoegh LNG focus on specific segments like LNG carriers and FSRUs. Golar’s differentiation stems from its hybrid model, combining shipping with infrastructure development, but it faces challenges in scaling up FLNG projects amid regulatory and environmental scrutiny. The company’s ability to secure long-term charters and maintain asset utilization rates will be critical in sustaining its competitive edge.

Major Competitors

• Flex LNG Ltd. (FLNG): Flex LNG specializes in modern LNG carriers with a focus on fuel efficiency and emissions reduction. Its fleet of 13 vessels is younger and more technologically advanced than Golar’s, giving it an edge in charter rates. However, Flex lacks Golar’s diversification into FLNG and FSRUs, limiting its exposure to infrastructure-driven growth.
• Hoegh LNG Partners LP (HMLP): Hoegh LNG operates FSRUs and LNG carriers, competing directly with Golar in the regasification segment. Its strength lies in long-term contracts with national oil companies, ensuring stable revenue. However, Hoegh’s smaller scale and lack of FLNG capabilities put it at a disadvantage compared to Golar’s integrated model.
• Shell plc (SHEL): Shell is a global LNG leader with an extensive portfolio spanning production, shipping, and regasification. Its scale and vertical integration dwarf Golar’s operations, but Shell’s focus on mega-projects limits its agility in niche floating infrastructure. Golar’s asset-light FLNG approach offers a complementary alternative to Shell’s capital-intensive projects.
• TotalEnergies SE (TTE): TotalEnergies is a major LNG player with investments across the value chain, including FLNG. Its financial strength and global footprint pose a competitive threat, but Golar’s independent status allows it to partner flexibly with multiple energy firms, including TotalEnergies, on infrastructure projects.