Golar LNG earns S&P upgrade to B+ on Argentina recovery and fleet expansion plan

S&P Global Ratings has upgraded Golar LNG Limited (NASDAQ:GLNG) to 'B+' from 'B', citing an improving macroeconomic environment in Argentina, where the floating liquefied natural gas (FLNG) operator is set to concentrate the vast majority of its core fleet over the coming years.

The credit action is directly anchored to the rating agency's previous easing of Argentina’s country risk assessment and its June sovereign upgrade to 'B-', driven by stabilizing liquidity and expanding access to market financing. Golar’s ongoing strategic pivot will leave it heavily exposed to the South American nation, with more than half of its total earnings expected to originate there starting in late 2027, a figure projected to climb to 75% once both the FLNG Hilli and FLNG Esperanza are fully operational off the Argentine coast.

The upgraded outlook comes despite an impending, transient spike in balance sheet leverage as Golar undertakes a heavy multi-year capital expenditure program, including the recent decision to convert a fourth FLNG vessel. Credit analysts estimate that FLNG 4 will require roughly $2.45 billion in total capital outlay through 2029, layering substantial obligations on top of active re-engineering costs for the Hilli and primary construction on the Esperanza.

Despite these heavy capital demands, S&P expects Golar to keep its adjusted debt relative to contracted EBITDA beneath 7.0x, a crucial threshold supporting the upgraded 'B+' rating profile. Contracted leverage is projected to settle at approximately 6.6x in 2028 and 6.9x in 2029, backed by an expanding earnings base that should reach approximately $850 million in annual contracted EBITDA once all committed vessels enter service.

Near-term credit metrics will nevertheless face temporary pressure over the next 12 months during the physical redeployment of the FLNG Hilli from Singapore to Argentina following the conclusion of its contract in Cameroon. With the Hilli sidelined for modifications through mid-2027, the FLNG Gimi, operating off Senegal and Mauritania, will serve as the sole active revenue engine, pushing net leverage to a projected peak of 16.6x in 2027 before rapid operational deleveraging takes hold.

This temporary leverage expansion is cushioned by a deep liquidity buffer, underpinned by $870 million in unrestricted cash balances as of mid-2026, a recent $500 million senior note issuance, and an undrawn $600 million revolving credit facility. Furthermore, Golar’s conservative operational framework, specifically its policy of limiting uncontracted vessel construction, and the inclusion of downside protection mechanisms within its charter agreements help mitigate execution and sovereign default risks, according to S&P Global.