Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Secured a firm order for a fourth FLNG unit (Mark II design) with CIMC Raffles, increasing controlled liquefaction capacity by 41% to over 12 million tonnes.
Performance attribution for the quarter was driven by Hilli's 100% economic uptime over its 8-year Cameroon contract and Gimi overproducing 15% against contractual volumes. Strategic positioning focuses on being the only 'FLNG as a service' provider, capturing demand for supply diversification following geopolitical disruptions in major export hubs like Qatar. Management attributes the decision to proceed with a Mark II design to strong charter engagement and superior economics regarding CapEx per tonne and OpEx per MMBtu.
The company is leveraging its proven operational track record to transition into a pure-play FLNG infrastructure firm, having exited legacy O&M contracts. Market dynamics show significant supply concentration in the US and Qatar, creating a strategic opening for FLNG to unlock stranded gas reserves in emerging regions. Projected annual run-rate EBITDA is expected to reach approximately $800 million by 2028, potentially rising to over $1.2 billion by 2030 if the fourth unit is contracted on terms similar to Esperanza.
The fourth FLNG unit is scheduled for delivery within 2029, representing the earliest available liquefaction capacity globally, which management expects will drive high charter interest. Guidance assumes a 5 to 6x CapEx to EBITDA return profile for new units, with a policy of maintaining only one 'open' or uncontracted vessel at any given time. Future growth is supported by an option for a third Mark II at CIMC and a Letter of Intent with Seatrium for additional units, creating a pathway to a fleet of over 7 units.
Commodity-linked earnings provide significant upside; every $1 per million BTU above $8 in LNG prices can generate approximately $100 million in incremental annual EBITDA. The total CapEx budget for the fourth FLNG unit is approximately $2.45 billion, a 10% increase over Esperanza due to global inflationary pressure on long-lead equipment. Hilli is currently in transit to Singapore for a $350 million modification program ahead of its 20-year contract in Argentina starting in the second half of 2027.
Management highlighted significant competition for critical equipment like turbines and cold boxes from AI data centers and the aircraft industry, which is extending lead times. An ongoing strategic review is exploring alternatives to accelerate growth and address the perceived value discrepancy between public market pricing and asset valuation. Nvidia-level potential. 30M+ investors trust Moby to find it first.
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