Golar Lng Ltd Q4 FY2025 Earnings Call

Welcome to the Golar LNG Limited 2025 Q4 Results Presentation. After the slide presentation by CEO Karl Fredrik Staubo and CFO Eduardo Maranhao, Tor Olav Troim will share some closing comments before we open the floor to questions. I will now turn it over to Karl Fredrik Staubo. Karl, please proceed.

Thank you, operator, and welcome to Golar's Q4 2025 Earnings Results Presentation. My name is Karl Fredrik Staubo, the CEO of Golar, and I am joined today by our CFO, Eduardo Maranhao, to present this quarter's results, and our Chairman, Tor Olav Troim, who will give some closing remarks. Before we begin, please refer to the forward-looking statements on Slide 2. On Slide 3, I will provide an overview of Golar today. Golar operates 3 FLNG vessels, all backed by a 20-year charter backlog. The Hilli is the top-performing FLNG in the world and achieved 100% economic uptime again this quarter. The FLNG Gimi commenced its 20-year contract with BP offshore Mauritania and Senegal in June 2025 and is currently exceeding contracted production volumes. The Mark II FLNG is under construction and on track for delivery by year-end 2027, after which it will start a 20-year charter in Argentina alongside the Hilli. We have three design growth options ranging from 2 million to 5 million tonnes per annum, with secured yard availability and pricing for all designs during Q4. Golar is listed on NASDAQ with a market cap of around $4.5 billion. Before year-end, our cash balance was $1.2 billion with net debt of $1.5 billion. Our EBITDA backlog is $17 billion, not including commodity-linked earnings and inflation adjustments. Our adjusted EBITDA for 2025 was $232 million, and we anticipate this growing to about $800 million as the fleet is fully delivered and under long-term contracts. On Slide 4, you can see an illustration of the long-term cash flow visibility related to our 20-year charters. The Hilli will conclude its current contract with Perenco in Cameroon in July this year and will undergo upgrades at Seatrium shipyard in Singapore before commencing its 20-year charter in Argentina in the latter half of 2027. The Gimi is currently under a 20-year charter for BP in Mauritania and Senegal, and the Mark II is slated to begin its 20-year contract in the first half of 2028. Slide 5 illustrates the adjusted EBITDA contribution from our current fleet. Golar's 70% ownership of the Gimi contributes $150 million annually based on the contracted volume. The Hilli is expected to deliver $285 million once contracted in Argentina, while the Mark II is projected to contribute $400 million once operational. After accounting for our G&A of around $35 million, we project long-term EBITDA generation of $800 million per year before considering commodity upside, inflation adjustments, and potential additional FLNG units. The embedded commodity upside consists of a profit-sharing mechanism within the FLNG contract and our 10% stake in Southern Energy. This commodity upside potentially adds about $100 million for every dollar above $8 in the offtake price in Argentina, with a downside of approximately $28 million for every dollar below SESA cash breakeven. We believe that this risk-reward profile will lead to substantial earnings over the 20-year lifespan of our contracts in Argentina. For example, if LNG prices revert to 2022 levels, the incremental earnings from the commodity upside could reach an annual increase of $2.7 billion; at current levels, we anticipate an additional $200 million annually. Slide 6 highlights key characteristics of our FLNG charter agreements. We strive to structure our LNG contracts to ensure solid infrastructure cash flow with robust contractual protections. A few key features of these protections include all contracts being settled in U.S. dollars, cash flows being paid offshore net of local taxes, and contracts being governed under English law. Our operating costs and maintenance CapEx are generally passed through or reimbursable by our counterparties for long-term contracts. Moving on to business updates starting at Slide 8. Q4 was another productive quarter for Golar, marking '25 as a year of outstanding execution. We successfully met all conditions for the 20-year contract for the Mark II in Argentina. During the quarter, we executed two financing transactions totaling $1.7 billion, including a new $1.2 billion bank refinancing that improved upon Gimi's initial financing. This new facility validates the bankability of our FLNG assets under long-term contracts. We also entered the rated U.S. unsecured bond market with a $500 million bond offering at a 7.5% coupon. During Q4, SESA signed a letter of agreement for an 8-year offtake deal for the first 2 million tonnes of production in Argentina, in collaboration with SEFE, which is a subsidiary of the German government and also the current offtaker for the Hilli in Cameroon. The offtake agreement consists of one million tonnes linked to Brent prices and another million linked to Henry Hub plus a premium. We expect these LOIs to be finalized into a formal agreement within Q1 of this year, at which point further commercial details will be disclosed. In Q4, we repurchased and canceled 1.1 million shares at an average price of $37.76. We are also pleased with the commercial advancements made this quarter regarding a potential fourth FLNG project, which we will discuss in greater detail later in the presentation. Regarding our full development for the year, '25 was a record year with $14 billion in EBITDA backlog from the two 20-year contracts in Argentina. We secured financing facilities worth $2.275 billion with the Gimi refinancing, the U.S. rated bond, and a $575 million convertible bond issued in June '25. We achieved the commercial operations date for Gimi and doubled our operational fleet of FLNGs. We continue to maintain market-leading operational uptime, with both the Gimi and Hilli exceeding contracted production levels, adding extra value for our stakeholders. Over the year, we repurchased 3.6 million shares, reflecting our confidence in the attractiveness of our own stock. We completely exited LNG shipping after 50 years with the sale of the Golar Arctic and our stake in Avenir Shipping. Overall, we are very satisfied with the past year and aim to continue this momentum moving forward. Slide 9 offers a snapshot of the Hilli. Hilli has maintained its leading market position, generating slight overproduction with $2.5 million in excess earnings over the 1.4 million tonnes contracted capacity. In December, we reached a significant milestone by producing our 10 millionth tonne of LNG since the contract began in 2018. Following the conclusion of its current charter in July, the vessel will transition from Cameroon to Seatrium Shipyard in Singapore for upgrades. Necessary long lead items have been ordered, and some work has already begun at the shipyard. In the first half of next year, Hilli will make its way from Singapore to Argentina to kick off a 20-year contract expected to commence during the summer, contributing $285 million in annual EBITDA, translating to $5.7 billion of adjusted EBITDA backlog over the contract's duration. On Slide 10, I highlight the Gimi. The Gimi achieved its COD in June 2025 and is currently optimizing operations with the upstream partners of the GTA project. Production is ahead of schedule, and we have made solid progress in optimization. In Q4, we billed a day rate that was 3% above the contractual rate and are frequently producing at volumes that exceed even nameplate capacity on an annualized basis. It’s important to note that the throughput capacity of any liquefaction plant can vary with gas quality and ambient temperatures, thus fluctuations between winter and summer months are to be expected. Colder temperatures in winter tend to boost production levels, but our contracted rate is based on 90% of nameplate, meaning any production beyond that increases our earnings pro rata. Given current operations, we expect Gimi to average production above contracted volumes, and we will continue to enhance these results in the upcoming months. In Slide 11, I cover the Mark II FLNG. Construction of the unit remains on budget and is on track for delivery by year-end 2027. We are currently nearing 50% completion, having spent around $1.1 billion of the total $2.2 billion conversion cost, entirely financed through equity. Notable construction developments can be seen in the images on the right, with the midship manufacturing for the liquefaction plant currently in progress. The new midsection will measure approximately 63 meters wide and 80 meters long, and we have surpassed 6 million man hours without any lost time incidents. On Slide 12, SESA is advancing on the infrastructure needed for the gas grid connection of the FLNG Hilli and the land-based support infrastructure for operations in Argentina. To date, SESA has committed around $500 million to investments, which include pipeline connections to the existing grid and support vessels, as well as constructing a land-based warehouse to facilitate spare parts and operational support for our activities in Argentina. On Slide 13, SESA is also progressing with a pipeline project from Vaca Muerta to the Gulf of San Matias. The pipeline involves three key elements: turbo compressors, for which a contract was awarded in December 2025; line pipes to transport gas over roughly 500 kilometers from Vaca Muerta to San Matias, which were also awarded in December; and the EPC contract for the construction of line pipes and the compressor, for which we have received eight proposals and aim to award within the first half of this year to ramp up construction. Slide 14 indicates that we have confirmed yard availability and pricing for the three growth designs being considered, including Mark I at Seatrium in Singapore, Mark II at CIMC Raffles in China, and a 5 million-tonne unit at Samsung in Korea. We are pleased to have competitive CapEx per tonne and approximately three-year construction timelines for the conversion candidates, and over four years for the Mark III. This information will be useful in developing our commercial pipeline. On Slide 15, we are engaged in numerous discussions regarding FLNG deployments. There is a growing demand for FLNG tonnage, which is generating positive developments in our commercial pipeline. We are currently negotiating projects in Africa, the Middle East, and South America. The pace of these commercial developments, along with the specific vessel design requirements of the projects, will ultimately dictate the design we will proceed with. We do not expect significant CapEx expenditures until the commercial terms for our next project are finalized. We will update the market once we have substantial information regarding our fourth unit. Finally, on Slide 16, I would like to discuss some overarching developments in the LNG market. Last year, the LNG market was approximately 434 million tonnes, and it is anticipated to grow by about 50% over the next five years, largely driven by increased supply from the U.S. Notably, the U.S., being the largest global producer, will capture most of the incremental growth. This is significant since the U.S. is already the low-cost producer of LNG. We are experiencing strong demand trends, especially from the Far East, with China being the most active buyer in the market. Moving forward, we need to see additional LNG FIDs to meet the rising demand, aligning well with the delivery timelines confirmed by shipyards and the current commercial negotiations. I will now hand the call over to Eduardo to discuss the group results for the quarter.

Thank you, Karl, and good morning, everyone. I'm happy to share an overview of Golar's financial performance for the fourth quarter of 2025. If we move to Slide 18, let's review some of the key highlights of the quarter. Total operating revenues significantly increased in 2025, reaching $133 million for the quarter and $394 million during the full year, an increase of over 52% when compared to 2024. This quarter, we report a net income of $23 million and a total of $113 million for the full year of 2025, an increase of 40% compared to 2024. Our Q4 adjusted EBITDA came in at $91 million, reaching a total of $265 million for the year. Some key drivers of this performance were Hilli, as Karl mentioned before, has maintained its commercial uptime level of 100% and recognized an additional $2.5 million of production in Q4 '25, while Gimi also saw increased earnings in Q4, largely driven by higher production volumes resulting from technical improvements and also improved ambient conditions on site. This quarter, we declared a dividend of $0.25 per share with a record date of March 9 and the payment scheduled for March 18. In November, we approved a new $150 million buyback program, of which approximately $41 million was spent during Q4 at an average price of $37.76 per share. Across the full 2025, we have been consistently active on buybacks and repurchased and canceled a total of 3.6 million shares. I'll provide some further information on this in the next slide. Moving to Slide 19. We continue to improve our balance sheet flexibility, and Q4 was a very active quarter in terms of transactions. In October, we issued $500 million under our first U.S. rated 5-year senior unsecured notes with a coupon of 7.5%. And at that time, we repaid $190 million of our previous outstanding 2021 bonds. In November, we closed a new $1.2 billion commercial bank facility for Guinea, equivalent to just over 5.6x its annual contracted EBITDA. This allowed us to release approximately $400 million in liquidity net to Golar. Our cash position remains strong with $1.2 billion of cash in hand at year-end. Our total gross debt stood at $2.7 billion, leaving us with a net debt position of $1.5 billion. On a fully delivered basis in 2028, once all FLNGs are in operation in Argentina, our net debt-to-EBITDA ratio is set to reduce significantly to just over 3.4x. When it comes to the Mark II, we continue to fund its CapEx commitments. So far, we have spent just over $1.1 billion to date. All of that amount has been funded with equity. So we continue to evaluate further debt optimization alternatives, which may include the refinancing of Hilli's current facility and a new long-term debt facility backed by the Mark II. This will allow us to continue to release significant liquidity to continue to support our growth projects. Now moving to Slide 20. We continue to focus on accretive growth while maintaining a sustainable quality of shareholder returns. Our plan is to allocate most of our operating cash flow after debt service to shareholders, while continuing to recycle capital through asset level financing and existing debt optimization to fund growth. In 2025, we returned approximately $250 million in the form of dividends and buybacks, of which $103 million were paid in dividends over the course of the year and $144 million in buybacks as explained before. During that same period, we continued to grow, and we've invested over $750 million on CapEx for our FLNG units. Moving to Slide 21. We can see that our share count has been significantly reduced over time with a total of just over 101 million shares outstanding as of today. Over the course of last year, we bought back and subsequently canceled 3.6 million shares, as explained before. We currently have a remaining allowance of up to $190 million under our buyback program, and we plan to continue our active approach to accretive buybacks from time to time. Moving to Slide 22. When our 3 FLNGs are in full operations in Argentina, we expect our EBITDA to grow to over $800 million before further commodity upside. This can grow even more, subject to further upside from LNG prices under the contract for Hilli and Mark II. Based on that, our free cash flow generation could reach around $500 million per year or approximately $5 a share before commodity upside. This could represent a total increase of over 5x our current dividend level of $1 per share, which we are currently paying. Incremental free cash flow could also be resulting under the SESA contracts and can be estimated at approximately $100 million per year for every dollar per million Btu increase in FOB prices above $8. Moving to Slide 23. I just wanted to recap that there are many ways that investors can get exposure to Golar. We are listed in NASDAQ, and our market cap was just over $4.5 billion with an average daily volume of over $50 million per day. We currently have $800 million on the 2 unsecured bonds issued in '24 and '25 and also an existing convertible bond of $575 million, which was issued last year. So there are many different ways that investors can gain exposure to Golar, and this is a summary of how you can play that. I'll hand now the call back to you, Karl.

Thank you, Eduardo. And turning to Slide 25 and a look ahead at what's our focus on continued value creation. Near term, we see increasing commodity prices that will boost the commodity-linked earnings for Hilli until end of contract in July this year. Based on the strong performance of Gimi, we also expect to see increased capacity utilization payments that will somewhat improve the adjusted EBITDA from Gimi. We believe one of the least understood parts of Golar is the commodity upside of our Argentina contracts. Within this quarter, we expect the commercial terms for the SESA offtake to be announced, and hopefully, that can ease the market's understanding of that potential offset. We have proven to do accretive buyback and cancellation of Golar shares, and we have more capacity under the existing buyback program. Through last year, and we'll continue to look for asset-level debt optimization, and there are plenty of opportunities to do so across Hilli and the Mark II that could release significant liquidity to fund a fourth FLNG unit and enhance equity returns. The start-up of the Hilli and the Mark II contract in Argentina are obvious step changes in earnings growth as well. The commercial pipeline of new projects remains under strong development, and we see the terms in which we believe we can obtain to be highly accretive to our platform value. The commodity exposure on the SESA contract will come into fruition as the two units become operational. As Eduardo just explained, the dividend capacity and the capacity to multiply increase that is evident once we're fully operational. We continue to see structural strong LNG demand beyond 2030 onwards. Our focused FLNG strategy with proven FLNG conversion expertise and the recently reconfirmed price and delivery schedule from the conversion shipyards is further testimony to our business model. Another interesting thing to note is that the net present value of Golar is increasing daily until both FLNGs are operational in Argentina as a function of time. Turning to Slide 26. Golar remains the only proven service provider of FLNG globally. We have an adjusted EBITDA backlog of $17 billion before commodity upside and inflationary adjustments. We remain with strong balance sheet flexibility of around 3.4x net debt to EBITDA once fully delivered. This enables growth while still increasing shareholder returns. I'll now hand the call over to our Chairman, Tor Olav Troim, for some closing remarks before we open up for Q&A.

Thank you, Karl. First, I want to thank management for their solid execution in the past year, successfully securing $14 billion in EBITDA backlog and raising over $2 billion in financing, as well as paying down more than $1 billion in debt for the Mark II and ending the year with over $1 billion in cash. This positions us strongly to pursue an aggressive growth strategy as the leading FLNG player globally. We see significantly more demand for our products than ever before, and our focus is on projects that can deliver the highest returns. One of the Board's key missions is to maximize shareholder value in both the short and long term. Effectively pricing equity is essential for our growth. The current value of Golar, as Karl mentioned, is tied to three factors: the value of our existing contracts, the value of our options agreement—which gives us a favorable position on gas for the next 20 years—and the value of the Golar franchise itself. While many understand the value of the existing contracts, the options are often overlooked. I want to emphasize the value of the Golar franchise. It's been 26 years since Fredriksen took control of Golar and began building a substantial LNG company, and 16 years since we started our FLNG activities in 2010. We ordered our first vessel in 2014, which began operations in 2018, and we have had eight years of highly successful operation since then. I believe many undervalue the franchise we have created. To illustrate this, one of the largest oil companies in the world approached us, saying they couldn't undertake certain projects and asked if we could provide our services for FLNG activities. While that opportunity might offer limited returns compared to other possibilities, it underscores the significant value of our franchise that I feel is often underestimated. When it comes to how we and the Board perceive the company's value, it is evident from our stock buybacks that we believe it is more advantageous to repurchase our own shares at a low valuation rather than pursuing other options. We have also decided to delay investments #4 and possibly #5 not due to a lack of projects, but because we are approaching 2026 and 2027 with limited cash flow, as the Mark II has not yet started and is currently undergoing repairs. We aim to time our investment phase to align with when we expect to generate an $800 million EBITDA and have sufficient capital for growth. During the Q1 earnings call, I mentioned that if we observe an undervaluation over time, the Board will initiate actions to address that disparity. Although the share price has shown some recovery recently, the Board believes the company's true value, including the key drivers I mentioned earlier, suggests that the share price should be higher than its current level. Historically, we have seen valuations in our industry rise when cash flows materialize, as was the case with companies like Cheniere, where share prices increased once cash started coming in. To enhance value until cash flows improve in 2028, we are seeking external advice on various strategies. This includes engaging with shareholders and potential partners, both industrial and financial, to boost short-term value for our shareholders. The market should note that we previously received unsolicited offers for the company, all significantly exceeding the share price at that time. The Board chose not to sell, a decision we believe was correct as we have since successfully built the company. The current Board of Golar includes members who have substantial capital invested in the company, and we are committed to acting in the best interests of all shareholders without any hidden agendas. While it is premature to anticipate outcomes from the strategic process we are initiating, we will keep the market informed if these efforts result in significant changes to Golar's operations or structure. I hope this reassures shareholders of our commitment, as I stated in last year's Q1 report. We still see potential for improvement given our $17 billion EBITDA backlog and industry-leading position. I ask for your patience as we navigate this process. While no outcome is assured, I can promise that exploring value-extraction alternatives remains a priority for the Board. We will keep shareholders updated on our progress. In the meantime, as Karl mentioned, the company's value is expected to increase as we move closer to the 2028 timeline. I want to emphasize that our 16-year endeavor to become a dominant FLNG player is yielding results. I am proud of the Hilli contract's performance and our timely, budget-compliant delivery to BP, which highlights our capability in delivering projects successfully. Thank you, and I hope this affirms what we've stated in earlier calls.

Thank you, Tor. So operator, we are now ready for Q&A.

Our first question comes from John Mackay from Goldman Sachs and Co.

I appreciate all the thoughts around the strategic review. I just want to drill into the details a little bit. I understand it's kind of a multifaceted process. But can you walk us through what the specific process you're focused on right now looks like? What could timing be? What are you watching to decide how to move forward? And maybe to put a bow on it, you mentioned you were approached. Is one of the options on the table here a potential sale of the company?

I think in view of the discussion we have had in the Board, how we want to orientate the market around this, I don't want to give any further comments than what I've effectively already said. I think hopefully, the shareholders have some respect for the fact that these kinds of processes need to be kept a little bit close to the Board and not effectively be a public process.

Okay. Maybe I'm asking it differently. You highlighted the current value of the company, your desire to push maybe some of the next vessels to the right a little bit to reallocate capital. Is the message here that the focus right now should be on further buybacks specifically? And I guess, at what point do you decide to switch from maybe investing in the base business to buying effectively the base business to commercializing the next vessel?

I can answer that one. So there's no change in our committed focus to develop attractive FLNG projects, and none of the actions taken today will pause the pace of the commercial evolvement of the contracts in discussion. That said, an FLNG project, if it's just to agree commercial terms with the counterpart, that would be fairly easy. These are very large infrastructure projects that require significant regulatory, governmental, tax, and environmental approvals, including LNG export laws. Most of the countries we are in discussions with didn't export LNG before we started it. That's true for Cameroon, that's true for Mauritania, that's true for Senegal, and it's true for Argentina. So there is absolutely no change whatsoever in Golar's committed focus for accretive FLNG growth. What we're saying is some of the projects in discussion have different vessel design requirements. Hence, instead of going on speculation, number one, because of the different requirements from the various commercial discussions; and number two, for the cash flow profile reasons mentioned by Tor, we've decided to not go on speculation as speculatively as we have previously done and then continue to mature the commercial pipeline before we commit significant capital, both because we believe that's right from a vessel design selection point of view and also for the cash flow profile that Tor alluded to.

Let me add a bit to that, Karl. It's important to remember that the process we're discussing, where we're seeking external advice on the future options for Golar, does not affect our daily operations. The Board has clearly instructed management to run the business in its best interests without letting any strategic discussions sway our short-term activities. I believe that any strategic discussions will support our efforts to continue building the company. This is business as usual, and nothing else is happening, though we are exploring other alternatives if there are more cost-effective ways to access capital than we currently have. Regarding the comments about 2026 and 2027, if we can delay cash flow by about six months to a year, we will find ourselves in a much stronger position. At the end of the period, when we face significant installments for ship 4 and potentially ship 5, we will also see substantial cash flow coming in from the business. This is a well-considered decision, which I know is backed by some of our major shareholders who have provided similar input. Our company has a history of undertaking projects worth over $3 billion or more than $1 billion with a relatively small balance sheet, which has sometimes put us under financial stress. We want to maintain a robust balance sheet to handle the multibillion-dollar projects we are discussing.

Our next question comes from the line of Chris Robertson from Deutsche Bank Securities, Inc.

Just given the strong operational performance of the Gimi over the last several months, it's producing slightly above nameplate, as you say here. How are the counterparties now thinking about the future of expansion at GTA? What other data points do they need to see or evaluate to make a decision around that? And what's the current thinking potentially around if an expansion would include a floating asset?

That question is probably better placed to BP and Kosmos, but BP has consistently stated that they want 12 to 18 months of well data before deciding on expansion, which depends on the performance of the wells. Since we are currently producing above the contracted amount, it indicates that not only the FLNG but also the upstream flow and other infrastructure are performing at least as expected, if not better, which should support a decision on expansion. Additionally, since the incremental cost of expansion is likely to be significantly lower than the initial phase, any growth should positively impact the project economics.

My follow-up question here is, Karl, you mentioned getting quotes at the yards recently. This is kind of a 2-part question. One, what's the current thinking around the cost for Hilli upgrade and redeployment work? Has that range narrowed at all as we get kind of closer here to the summer months? And then two, could you clarify kind of where things are shaking out in terms of where you're getting quotes at in terms of a dollar per metric ton? Have we seen any cost inflation since the Fuji project? Any commentary around that would be helpful.

Sure. So on Hilli, the conversion budget, when we say conversion budget, that includes everything from disconnecting in Cameroon, towing and bunkering the vessel from Cameroon to Singapore, the yard stay and sailing back to Argentina and connecting and commissioning, OpEx, training, spares and upgrade work, all in, we estimate $350 million, including a certain level of contingencies. As we continue to execute on the Hilli redeployment, most of the equipment is now ordered. We feel comfortable with that budget, and we'll try not to eat into all of the contingencies built into the $350 million, but that's the budget. But it's important to highlight that this includes everything, not just the upgrades to the ship. And then the second part of the question, do we see price inflation? Yes. The price inflation is not so much on the yard scope. It's more on the top side, and in particular, the long lead equipment on the top side. The primary driver of that cost inflation is competition for the equipment, mainly from AI data centers. We're using the same gas turbines and some of the other critical components. The massive surge in such developments has caused lead times to go out and prices for that equipment to go meaningfully up. If we then look across an FLNG, we see very limited cost inflation of the Mark II compared to where we ordered last time. We do see a higher cost inflation on the Mark I compared to where we ordered, but that's obviously a function of it's a longer time since we ordered the Mark I. The biggest cost inflation is without a doubt on the Mark III, and that for the Mark III is also driven by competition at the shipyard, namely Samsung. So that's how we see it, but we still see that we can obtain a cost advantage compared to land-based of up to 40% lower CapEx per ton for Mark I and II, not so much for Mark III.

Our next question comes from the line of Alexander Bidwell from Webber Research & Advisory.

With the performance thus far on Gimi, how should we think about production above contractual base going forward? You had mentioned ambient temperature and gas composition are both key drivers. Are there any other factors such as maintenance, which would impact production quarter-over-quarter?

Sure. Maintenance is already considered in the difference between the nameplate of 2.7 and the contractual amount of 2.4, which includes scheduled maintenance. Regarding the effects of ambient temperature, we anticipate some seasonal variation beyond the 2.4. We don't foresee dropping below that figure during the summer months, and we expect to be considerably higher in the winter months. Overall, we anticipate being well above the contracted amount; for Q4, that was an increase of 3%, but we are still optimizing and believe that more than 3% is a reasonable expectation throughout the year. We are not ready to commit to specific percentages at this time due to ongoing optimizations. Achieving this level of production early in the project has exceeded the expectations of both Golar and the charter.

All right. Great color there. Turning over to Argentina. Could you walk us through the start-up and commissioning cadence for Hilli and the Mark II once the assets are actually onsite? And are there any lessons learned from Cameroon and GTA that you plan to apply for the deployments?

Yes. The commissioning process for Hilli is expected to be quicker than for the Mark II because Hilli has been operational for 8 years while the Mark II has not yet operated. We anticipate the commissioning of Hilli will take about 3 to 4 months, whereas we expect up to 6 months for the Mark II since its equipment has not been running in December. The process involves arriving on site, connecting to the mooring system, and starting the commissioning with gas in production. We are likely to adopt a key learning effect by arriving with some LNG in the tanks, allowing us to begin commissioning before we depend on gas flowing through the pipeline, which will save time connecting to the grid. Although there is a slight cost associated with the cooldown process, it is minor compared to the overall FLNG capital expenditure, and this approach can save significant time, similar to what we did for Hilli and Gimi during commissioning.

Our next question comes from the line of Sherif Elmaghrabi from BTIG.

To begin with the Gimi, considering that production has exceeded expectations, are project partners still interested in addressing any bottlenecks? What steps need to be taken to resolve bottlenecks given that Gimi is already performing above its nameplate capacity?

Again, it's a question for the upstream partners more than us, but it's in everybody's interest to debottleneck provided you can do so at, call it, CapEx accretive to the unit economics of the project. We do expect that such debottlenecking will be at a very meaningful accretion to unit economics, and as such is in the interest of all stakeholders, including Golar.

Okay. And then turning to a fourth or fifth unit. Can you elaborate on these Middle Eastern opportunities? That's not something that was on my radar, but it's interesting. I'm wondering if that's linked to ramping unconventional gas production in the region.

You are correct that this region has been actively pursuing FLNG and has made significant progress in project development for a potential FLNG project. Although we haven't discussed it much before, we are optimistic about continuing to advance at a good pace.

Our next question comes from the line of Spiro Dounis from Citi.

I wanted to go back to demand. I think I heard you guys say several times that you're seeing more demand than ever before for this LNG infrastructure. I was just wondering if you could expand on that. Is that macro related? Or is that specific to more of an FLNG solution or maybe both?

I think it's twofold. One of it is the increasing industry recognition of the efficiency of FLNG versus alternative liquefaction solutions. The fact that you can construct this unit at up to a 40% discount to land-based and the flexibility a movable FLNG provides versus land-based is one key driver. The other key driver is that the vast majority of incremental production of LNG will come out of the U.S., and all U.S. projects or the vast majority of U.S. projects source at Henry Hub. So the attraction is when you can find reserves that you can source in addition to the CapEx saving, but significantly cheaper gas sourcing than Henry Hub. That's the other component that drives the interest. So for us, it's increasing industry recognition and the attraction of sourcing cheaper gas.

Got you. That's helpful color. Second one, maybe for you, Eduardo. Just you mentioned on this latest refinancing or financing that it sort of proves out the bankability of these structures. Could you maybe expand on that as we think about the go forward here? You obviously have a lot more financings to do. Does this latest one prove as a blueprint? What lessons did you learn during this last go around?

Yes, that's a great point, Spiro. So you're absolutely right when it comes to the data point that we had on the latest financing. So when we look at the Gimi deal that we closed in November, we raised $1.2 billion, which is just over 5.6x Gimi's annual EBITDA. So if we try to apply, and we are in discussions of potential similar transactions to that one, if we were to apply the same multiple to both Hilli and/or the Mark II, we could be looking to raise in excess of $1.5 billion for Hilli and over $2 billion for the Mark II. So that really shows the whole potential of financing capacity that we have under these contracts. These are long-term 20-year agreements, and we really believe in the bankability of these contracts that we have signed up to.

Our next question comes from the line of Liam Burke from B. Riley Securities.

Karl, you mentioned a lot of interest in potential negotiations for future FLNG projects. Does shipyard capacity play a role in those negotiations? Chris talked about cost, but does shipyard capacity come up in future discussions?

Absolutely, yes. That is why it's been critical as part of this commercial pipeline development to have confirmed yard availability and updated yard pricing in continuing such discussions because delivery is obviously a key part of this. What we see is that for the conversions Mark I and II, we are still able to maintain a very, very competitive conversion period of somewhere between 36 and 40 months, whether or not we go Mark II or Mark I. What we see is that if you go bigger on the Mark III, it's meaningfully pushed out even since we had the update with the shipyard 6 to 9 months ago. So on that one, we see the yard availability as a negative. On the first two, we still see it as attractive.

Great. And then other FLNGs out there mostly operated by the major energy companies. Has there been any potential competition on the FLNG as a service only from any other providers?

Nobody else in the world has done vessel conversions, FLNG vessel conversions. We think that the CapEx and delivery time is better obtained in the current yard and long lead situations for vessel conversion than it is for new builds. As part of the update we've had with the shipyards, we have also explored new builds on the smaller sizes that reconfirm that conversion is the cheapest and most efficient way to do, but obviously comes with significant engineering complications that Golar has built up over time. So we do see that there are more and more majors going for this type of technology, but there are significant advantages to doing it with us as a service provider as opposed to replicating this through a new build because you cannot obtain the same benefit.

There are no further questions at this time, so I'll hand the call back to Karl for closing remarks.

Thank you all for dialing in and listening to the Q4 presentation. Have a great day.

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