Golar LNG Ltd (GLNG) 2015 Q2 法說會逐字稿

Good day and welcome to the second-quarter 2015 Golar LNG Limited earnings conference call.

Today's conference is being recorded.

At this time I would like to turn the conference over to Mr. Gary Smith, CEO of Golar LNG.

Please go ahead, sir.

Thank you very much and welcome to this afternoon's second-quarter results call.

The agenda for the call today is as per our usual format, so I will kick off with the highlights.

I will throw it to Brian who will take us through the financials and then I will come back and talk a little bit more in detail about the business outlook and the update.

So for the highlights for Q2 and top of the list and I think most importantly now, we are a matter of weeks from hopefully signing all final documents that underpin the FID for the Perenco Cameroon GoFLNG project, I will come back and talk more about that.

In association with that, we're also pleased to report that the construction and conversion work on the Hilli taking place in Keppel continues to be on track and within budget.

As reported in the last quarter call we have signed the term sheet with Ophir for the Equatorial Guinea GoFLNG project and is pleasing to report that project is also continuing to make good progress.

The LNG shipping market or the LNG carrier market continues to be troubled with low utilization and low rates.

We are taking action there and I will come back and talk a little bit more about that.

But really it's a poor shipping market that underlies the financial performance for the quarter, which is EBITDA of negative $25.3 million as compared to our loss of $4.3 million in the previous quarter.

Notwithstanding, the Board maintains a dividend of $0.45 per share.

It's also been pleasing to report during the quarter what we have in place now the financing for the GoFLNG vessel Hilli, and Brian will talk more to that.

And indeed we have now entered also into agreements to commence our third GoFLNG conversion and are currently in discussion with both Keppel and Black & Veatch about a fourth conversion.

During the quarter we placed an order for an additional FSRU, the Golar Tundra with Samsung, and more recently we just entered into an agreement to establish the Cool Pool with our new Gaslog and Dynagas, and I will talk a little bit more about that as well.

But let me hand it over to Brian now who will take us through the financial highlights.

Thank you, Gary, and good afternoon to everyone.

As Gary already alluded to in the highlights of this quarter, the EBITDA for the quarter is substantially down from Q1.

And if we break that down and look at page 5 we can see that the total operating revenues has decreased from $32.2 million in Q1 to $20.1 million in Q2 2015, and the main factors behind that is really, you can point to four reasons.

One, obviously the Arctic was still in charter in the first quarter and of course the charter rate at the time reflected the 2012 market rates which were abundantly much better than where we are today.

We also had the Seal in charter for all of Q1 and that charter ended during the early part of the second quarter.

At the same time both Glacier and Celsius were averaging 50% utilization in Q1, and unfortunately they incurred a much lower utilization in the second quarter.

Against the lower utilization and lower rates that we saw in the second quarter our operating voyage expenses in the second quarter is slightly lower, with the Grand and the fair value expenses that we saw in the first quarter not appearing in the second quarter.

And then on the Eskimo charter of course has ended in respect to the end charter from the MLP.

And so whilst we incurred an expense of $6.5 million in the second quarter, we don't expect to see that in the quarters to come.

Nevertheless, because of the utilization being quite low during the second quarter, we saw an increase in other voyage expenses from $4.7 million in Q1 to $8.2 million in the second quarter.

Against that we also saw an increase in administration expenses, from $7 million in the first quarter to $9.2 million in the second quarter, predominantly as a result of project related expenditure as we look to develop opportunities in regards to floating liquefaction business.

As a result, our EBITDA for the first quarter from $13 million dropped even further to a $25.3 million loss in the second quarter.

You will see there that further down the table you see the net financial expenses and income is a positive $35.1 million against a negative of $47 million in Q1, and that's mostly as a result of a positive mark-to-market movement in the total return swaps of Golar LNG Limited shares that we entered into during Q1 and Q4 2014.

But unfortunately given the share price today of the Company, that of course may reverse again and may impact negatively our third-quarter results.

As a result of those factors, particularly on the operating side, our utilization suffered and such decreased from 46% in Q1 to 33% in the second quarter.

Going over to page 6 and obviously during the quiet period in LNG shipping, of course the dividend contribution by LNG Partners continues to be of great importance to Golar.

As you can see there the contribution from Golar LNG Partners has been growing ever since IPO of Golar LNG Partners, such that contribution today is close to an aggregate of $50 million, despite Golar LNG Limited's shareholding in Golar LNG Partners now at 30% versus higher than 60% when MLP was initially IPO'd.

And of course, with the growth, we expected growth brought about by Golar's employment of FSRUs and floating liquefaction and of course potential on shipping as well, we would expect the IDRs to potentially play a very important role in the growing increase in dividend contribution by Partners into Golar LNG Limited.

Going over to page 7 to look at the main items in the balance sheet, as you can see the cash and cash equivalents from March to June haven't moved dramatically.

And that's because in Q2 we saw the repayment of some of Golar Eskimo's vendor financing loan that was afforded to Golar LNG Partners, and also the revolver that was agreed between the Golar LNG Partners and Golar LNG Limited at the time of IPO.

So whilst we have seen expenditures in respect to the Golar Hilli, and of course the cash leakage brought about by utilization and low rates on shipping, the dividends contribution by Golar LNG Partners has maintained a good solid liquidity for Golar LNG Limited level.

We highlighted in the first quarter [adamaline] the respect of the ICBC financing on the four vessels that was entered into in 2014.

As you can see from March to June 2013 the amount of short-term debt incurred and current portion of long-term debt has decreased substantially from March to June 2013.

And this is because it's a result of those vessels being refinanced by ICBC themselves during the second quarter.

As you know, the accounting under these facilities is such that we actually have to reflect the numbers of the lenders in our books.

So what you are seeing there isn't necessarily the cash payments that Golar is expected to make but is the cash payments that the subsidiaries of the lenders are expected to make under those books.

It's an accounting treatment that we have to follow given the nature of the financing.

Going over to page 8, and again just looking at the main impacts to Golar's cash flow during the quarter.

Of course, the biggest impact there is in respect of the assets under development of which is mostly on the Hilli, so while additions to new buildings and vessels and equipment has decreased materially from $390 million in Q1 to only $2.7 million in the second quarter as a result of non-deliveries taking place in the second quarter, the expenditure on the Hilli of course went up a little bit as well and as a result that will have depleted the cash by Golar LNG Limited.

Having said that, we also saw amounts coming in from Golar LNG Partners of $120 million in respect of the Eskimo loan that was part of the vendor financing put in place at the time of the Eskimo dropdown in the first quarter.

And then just looking at the Company's overall liquidity position and looking at page 9, of course the Company is very much aware of the ongoing softness in the LNG shipping market.

However, given where the Company is today it retains a good liquidity position and looking at the majority of this year and well into next year the capital expenditures ahead of us, we're also in a good position to meet those obligations.

So the Company currently has $375 million cash in hand and a balance sheet and actually that number hasn't materially changed to date.

On top of that we are expecting another $100 million in respect of the Eskimo sale that happened during Q1 and we expect that that could be substantially repaid within the year or so from Golar LNG Partners.

Again, highlighting the importance of annual distributions from Golar LNG Partners at $50 million, of course that is maintaining a loss of the operational cash outflow that we are seeing on the current shipping operations.

I think the one thing that is, of course, puts us in a very good position is that the financing for the GoFLNG Hilli is now in place.

We entered into a commitment with China shipping leasing company of Hong Kong during the third quarter that will allow us to finance up to 80% of the project cost of GoFLNG Hilli.

We will be able to draw down from that facility once a couple of milestones have been achieved, and of course one of those milestones is making effective of the Perenco SNH and Golar tolling agreements, which we expect to happen during the last part of this quarter and where Golar LNG Limited has been invested $400 million in the project, which is now achieved.

So going forward, once those have been reached then the Hilli expenditure will no longer pose a cash leakage to Golar and going forward the Hilli conversion is then fully funded.

At the point of the delivery of the vessel, the value of the debts in respect to the Hilli reaches approximately $960 million, and at that point not only is that amount sufficient to take delivery of the vessel but also potentially release some equity back to Golar LNG Limited for further business developments.

Furthermore, whilst we have announced capital expenditures on both Gimi and Gandria, actually looking at the agreements themselves there is a very limited capital expenditure requirements going forward.

We made public that we have paid $50 million in respect of making the Gimi contract effective, that was in December 2014, and a further $50 million is expected to be made to be paid over the next 12 months in making the Gandria contract effective.

Having said that, in the event Golar LNG Limited is not successful in firming of contractual employment for those two vessels, there is an option for Golar LNG Limited to terminate those two conversion contracts and $30 million of the $65 million will come back to Golar and to be spent on the Hilli conversion.

So really there is no big material capital expenditures ahead of us which isn't taken care of in respect to the cash availability of the Company.

That's the highlights in respect to the finance and accounting side.

I'll now hand over the presentation to Gary to go through the business development of the company.

Thank you, Brian, and I'll start on page 10 of the presentation.

Which is the familiar Golar portfolio slide and there have been two amendments to this slide since the last quarter.

Firstly we have at the bottom of the page the newbuild FSRU which is the order from Samsung, and I'll come back and talk a little bit about that in a moment.

And then also you will see about halfway down the page where Gandria is now the nominated vessel for the Ophir Equatorial Guinea project and she is scheduled to go into conversion around the middle of next year when the project takes FID.

If I move then to page 11 and starting with the LNG carrier part of the business, and I think as I said previously this has been a pretty tough market for anyone operating in the LNG carrier business.

The utilization as Brian mentioned has been, I think an all-time low with 33% and the rates in the mid-30%s for tri-fuel diesel and electric ships and in the low to mid 20%s for the steam turbine vessels and anything that attractive.

I guess to the extent there's any good news in this market the one thing we can point to is that the spot market is growing, and noticeably growing.

We have already year to date seen within the industry, and certainly within Golar, as many cargoes traded year to date as there was for the whole of last year.

And I think this has been really due to the impact made by some of the trading companies who are being very effective in securing cargoes and trading them, which is a sign that this market is disaggregating and firming up continuously.

The challenge for the ship owner in a market like this is always to be in the right place at the right time.

The cost of repositioning these vessels to secure employment can be very expensive.

And it's a bit of a lottery as whether you're in the right place at the right time when the cargoes become available.

And really the large part of the rationale for the formation of the Cool Pool, we announced a couple of weeks ago now the formation of the Cool Pool which is three, I would argue first year owners: ourselves, Gaslog and Dynagas, pooling our vessels for the purpose of securing short-term business and for the purpose of the Cool Pool, short-term business is defined as charters of 12 months or less.

The expectation is that this will certainly reduce any costly repositioning of vessels.

It will improve the marketing of the vessels.

It will certainly see better scheduling and utilization of the vessels and it gives us a chance for the first time in this business to introduce some more innovative charter forms in other segments, such as contracts [and deployment], so we're quite excited about the opportunity.

Clearly I think it's fair to say that the circumstance of the market has capitalized the formation of the pool.

But having done so we're quite optimistic as to what this pool might deliver, certainly in this market but also as the market firms it certainly puts us in a strong position.

If I move on then to slide 12 which talks to the FSRU side of our business, we now have with the start up of the Eskimo in Jordan, six operating FSRUs.

And now with the recent order on the July 17, two FSRUs on order.

The newly ordered vessel is indeed a sister ship to the Tundra, so 170,000 cubic meters storage with a peak regas capacity of 750 million scfd a day.

As part of that order we have the option, but not the obligation, to secure two more delivery slots into 2018.

The two newbuilds, the two FSRU newbuilds that are on our books represent 50% of the available uncontracted FSRUs in the market.

There is a further FSRU contracted to [Hogan] and then to BW.

It's really pleasing to report that during the quarter we delivered and started up the Eskimo in Jordan.

That whole exercise went without a hiccup.

It was seamless, it was flawless and it really does validate our strong operational performance and positioning within that market, and that's extremely important to the people we do business with.

We've talked previously on these calls about possible employment for the Golar Tundra in Ghana and it's fair to say we are not making the required progress in those discussions.

Whilst we still go forward, we are now more aggressively pursuing other opportunities because we're conscious of the fact that vessel will deliver towards the end of the year.

Our new piece of business which we have not previously mentioned but was included in the results announcement that went out earlier today, was our participation in a FSRU opportunity in Brazil.

And negotiations which are currently underway to secure an option to Golar to participate actually in the power station that accompanies that FSRU.

The FSRU is in Brazil, North of Brazil in the state of Sergipe.

Our option to participate is up to a level of 25% in the power project itself.

So let me hasten to say, before I go on and talk a little bit more, that the investment in the power station would not be held in Golar, but actually in a standalone long recourse subsidiary which we would set up if we go forward with this opportunity.

This is a sort of development of our thinking, so clearly it's attractive for us to secure employment opportunities for FSRUs.

Interestingly in this project there is the possibility to contemplate the capacity in the FSRU and also the possibility to contemplate the delivery of LNG to the FSRU.

So it's not lost on us that FSRUs are all potential markets which could support the GoFLNG, FLNG side of our business as well.

And whilst I'm not saying necessarily that this project will be linked to any one of our FLNG projects, it's clear that if we are able to bring market to the FLNG projects it helps accelerate that side of our business materially.

And this is where the whole Golar midstream services concept starts to become I think very evident.

If I move on then to slide 13, which talks to the Hilli conversion, it's really pleasing to say that that project is continuing to track on schedule and on budget.

We are at the point now where the design and the procurement effort, all the 3-D modeling is essentially behind us.

We are into the 90% complete in that part of the project.

And it shouldn't be lost on people on the call that this has really been a significant challenge of these projects.

The challenge with floating LNG is indeed to achieve a layout within a confined space that fulfills all the requirements of the vessel and satisfies all the safety and regulatory concerns.

That's a significant challenge that sits behind us.

I am pleased to report that.

Activity during the quarter has been around construction of the sponson assembly blasting painting, it's been around prefabrication of piping and work to do with the life extension and repair of the base vessel.

We've also started to turn our attention in more detail towards the Perenco Cameroon project, and taking into account the specifics of that project, the mooring arrangements, the operational aspects of operating the Hilli in Cameroon.

On a weighted basis, the project is now 60% complete, and just to be clear that doesn't mean if you were to go to the capital and look at the ship it would look to be 60% complete.

That 60% also includes the considerable effort that's gone into the engineering and the procurement.

Going forward, the focus now very much clearly moves towards Keppel in Singapore, within the next couple of months the ship will go in dock, the sponsons will be added and then we will start fitting out the topsides.

If I move on to slide 14 which talks to the first two GoFLNG projects and really pleased to announce we have made, as expected, very good progress in the Cameroon Perenco project.

We're now really sitting and waiting for SNH and government to ratify the documents agreed between ourselves and Perenco.

With a clear expectation that those projects will take FID within the quarter.

Perenco finalizing, if not already finalized, the LNG marketing and we remain on schedule for the project to start up as advertised Q2 2017.

So we are very proud and we're excited about the opportunity with that project presents to us.

Meanwhile, good progress continues to be made in Equatorial Guinea with Ophir.

This of course is a bigger project in terms of its turn, its quantity and its engineering challenges.

We've already announced and mentioned previously on this call, the decision we have taken to switch Gandria into this opportunity to free up Gimi to pursue other opportunities.

And pleasingly the Equatorial Guinea project also stays on track for startup mid-2019 or first-half 2019 I should say, with FID on track for first half next year.

I will then switch to page 15 and talk about the business development activities which is becoming a big part of what we're doing right at the moment, having now made the decision to allocate the Gandria to the Equatorial Guinea Ophir project and free up Gimi for a potential 2018 startup.

We have been working hard to identify the potential projects that might employ Gimi, and we believe now we have four potential projects which are all under active consideration and all under active discussion.

Interestingly, each one of those projects is quite geographically separate, so we're not now just looking West Africa.

We are also looking Middle East, Far East and Central America.

And I think it's also worth to note that each one of those projects, notwithstanding the different geographies in which they operate, are all extremely attractive [with terms] to both Golar and to the resource holder.

And it's important to note that's true, notwithstanding the very low oil price and low LNG price environment we currently operate in.

I think the base toll of our projects is compelling, but the ability to reflect that toll index of oil as you have seen in the Cameroon Perenco project means that even in slow oil prices, $30 a barrel, our projects can be solid double-digit return investments for both Golar and for the upstream resource holder.

I think that's unique to our proposition and really puts us in a strong position to move aggressively in this low oil price regime.

We have now firmed up the conversion contracts, as Brian mentioned in his comments, for the Gimi which now preserves the option for us to turn one of these four option projects into a firm project and we need to do that within the first quarter of next year.

With the growing level of momentum that we have with the range of customers now, we're actively discussing with both Black & Veatch and Keppel the possibility of doing a fourth conversion.

So let me finalize and summarize as on page 16, and just to recap a little the current spot market clearly is causing us concern.

We do see improvement.

We do see projects starting up on the east coast of Australia.

We see projects starting up in the Gulf of Mexico within the next few months.

And hopefully that will bring increased demand for the carriers that we have in the spot market.

The Cool Pool is now launched.

It's been launched to generally favorable reaction from the market and we believe this will help both the participants, ourselves, Gaslog and Dynagas, but also the charters to do more interesting and challenging contracts.

But importantly, will relieve us of the repositioning of ships and help us on the scheduling side.

As I mentioned earlier, the Eskimo is now on hire and working pretty much at capacity, full capacity in Jordan.

It seamlessly and flawlessly started up and it does really elevate our leadership position in that market.

Tundra, well we continue discussions in Ghana.

We're now actively seeking alternative employment opportunities for this vessel.

And just to recap on GoFLNG where we continue to gain and increase momentum with the whole GoFLNG story.

With Cameroon, with SNH and Perenco, we do believe we are within weeks of taking FID on this project.

Although we should be careful to say that the final say is with the government and it's really not for Golar to preempt their decision-making, but everything we hear and everything we see suggests we are on track.

Equatorial Guinea is now heavily into the design, engineering FEED studies, commercial studies, LNG marketing which will hopefully bring that project to an FID decision the middle of next year.

The Gimi conversion now is confirmed and we work aggressively toward finding employment for her and I believe we have made very good progress on that front.

Moreover, looking a little bit further out, the final of project opportunities we see for GoFLNG in the period after 2019, including and after 2019, is firming up and many of those projects look more substantial and more real as each day goes by.

I will stop the commentary there and be happy to take questions on the call.

(Operator Instructions)

Michael Webber, Wells Fargo.

Good morning guys how are you?

Hello, Michael.

I wanted to start off by asking what is directly in front of us around Perenco and Cameroon?

Gary, you mentioned we were probably weeks away from FID at it seems like you are at the one yard line.

You also mentioned the update process, like it was the marketing processes were winding down and were completed.

I know that's not your call to make necessarily, but just curious what color can you give us around offtake for that project?

Because it would be so meaningful.

And then around the time line and I guess the three weeks FID, is it fair to assume that, that encapsulates everything at that point?

Every contract or meaningful contract would be signed including, offtake?

Thanks Michael.

Let me just repeat what you said in the question, which is that there are elements of this project which we are not party to and all aspects of this project ultimately need to be sanctioned by the government.

And anything I say on this call I don't want to preempt or in any way undermine their decision-making process.

Having said that, there are four documents which essentially underpin the process of FID.

There is the PFC between Perenco and the government, there's the tolling agreement which is between ourselves and Perenco, there is a gas convention which deals with the fiscal and regulatory issue in Cameroon, which is a tripod agreement between ourselves, Perenco and the government of Cameroon.

And then there is the LNG silent purchase agreement which will be between Perenco and their offtake.

My understanding and my expectation is that all of those documents are in a position now where they are under review, and should that review go as planned and we're on track as previously mentioned, to sign all of those documents by the end of the quarter.

Okay.

Let me again, say I don't have carriage of all of those documents, I am not party to all those documents and so we are a little bit dependant on other parties progressing as advertised.

I don't want to preempt the decision-making of other parties.

Right.

No, that's fair and I appreciate that.

And just to follow up, Gary you've been all been around the space for a long time and even when it comes to completion, and again it seems like we are pretty close, this would be the first completed third-party FLNG project; at least the first offtake from a third-party FLNG project, if and when it does get done.

Can you maybe talk a little bit about that importance and how that could translate to other projects?

Do you need to see one before the dam breaks or does this give credibility to the idea and concepts, within the context of having been around the space for a long time, this potentially being the first one, can you talk about how this will resonate throughout the space?

The other FLNG projects out there are basically progressed by OICs or NICs, so this does represent I think a milestone in the FLNG business space.

I think it's incredibly important milestone that we are about to hit, assuming we get there.

Again, careful not to preempt the decisions of others.

It does validate many aspects of the project.

It validates the project from a technical perspective.

The proper regime in which to take FID in terms of validating the economics of what we're doing, the fact that we can progress a FLNG project through FID in this current oil price market speaks volumes to the competitivity of what we are trying to do here.

And then finally to the extent that there is a buyer for this project and that will be revealed I guess, it validates there is a market for the LNG that we are producing and that there are credit-worthy substantial buyers prepared to step up and contract LNG from the project.

So should we get to that point within the next few weeks, I think it's a big point of validation.

I think people are starting -- in the industry -- at least are starting to appreciate that, and many reserve holders are starting to realize that to the extent they want to monetize their gas in the ground that in this current low oil price regime, and really we are the only avenue left to do that in the immediate future.

I think in addition to Gary's comment there, Michael, again if we almost look back 10 years from today when we started the FSRU in a segment of the business, and again Gary was here when that all sort of kicked off; initially there was a lot of hesitation whether or not that kind of model was going to work.

Certainly, we were aggressive and believed that, that was going to work, given what we were seeing coming ahead of us, and I think today the proposition seems to be that, okay why are you building land-based terminals?

Why aren't you just doing re-gas FSRUs?

We would hope that what we are achieving here in the FLNG space is going to replicate what we have received in the FSRU space.

And of course if that were to happen, again it's a leading and tentative part of Golar that has created that.

Fair enough.

That's very helpful.

Just a couple more and I'll turn it over.

But Gary you mentioned a couple of times in your last comment around the lower commodity price environment and given that we're in a different environment now than we were six months ago, I'm curious for the new projects you are talking to.

Are you seeing any reluctance or I guess, slippage in decision-making from your counter-parties?

And if so, or if not, can you characterize, or how would you characterize the return profiles you are negotiating right now relative to say what we have seen from Perenco and Ophir?

I would argue Michael that in fact what we're seeing is exactly the reverse of that.

I think our proposition becomes more compelling the lower the oil price gets.

Clearly that's not forever, but certainly in the realms where we are currently operating, when really we represent the only feasible fast-track solution to monetizing stranded gas.

And I think people, it will be helped by the announcements in Cameroon when they are made, the validation of that project will make it clear, I think to the industry as a whole, that there's an alternative to high CapEx high-cost projects, which will certainly not be economic in this current market.

Given that there is no alternative out there, that I am aware of, that offer better economics, we are on pretty sound ground to protect our economics.

But really it allows the upstream resource holder to also pursue projects.

So we should assume pretty similar tolling structures around those projects is pretty fair?

That's right.

We are not seeing any pressure on that at the moment.

Great.

I will just add, I think the pressure will come when we get competition and at the moment we don't see that happening.

Okay.

I will save that for somebody else.

One more, and then Gary you mentioned the fact you were starting to negotiate a fourth conversion.

Obviously, it's generally kind of a bullish indicator and I'm just curious around whether that project, that geography is related to the third project you are negotiating?

Is it just something scalable or would this be something completely new?

We have seen Venezuela come out and talk about making a decision by the end of the year.

Cameroon is releasing more reserves come out of that region.

So I'm just curious as to how we should think about that fourth and whether or not what your ability would be like, or your willingness to move forward with a fourth before a third is finalized?

Let me say Venezuela is not on the short list of four.

I think it's an either/or answer.

There are opportunities we're looking at which are scalable, but it's also realistic to contemplate that we might get two of the four out of the line, in which case we may choose to do both.

So what we are trying to do is preserve that optionality at the moment.

Explore the possibility of doing a fourth project which would then put us in a strong position, should it be a project where more than one vessel is required or should we choose to pursue two independent projects.

Got you.

Okay.

Thanks for the time.

I will turn it over.

Fotis Giannakoulis, Morgan Stanley.

Hello guys and thank you.

As you mentioned earlier, the only subject for the tolling agreement with Perenco is SNH.

I just want to clarify, is this just a decision that has already been made, just the bureaucracy here or they are expecting to see progress with the sale process of LNG, and if you can comment about how this process is going?

There was this comment from the CEO that they have already sold the volume.

Can you comment on that?

Okay.

Thank you Fotis.

So dealing with Cameroon and it's again important to point out that we are one step removed from the government in many of these processes.

The detailed discussions that have been taking place in Cameroon have been with the national oil company, SNH, but of course there are many other aspects of government which need to sign off on this project, not least the Treasury.

So my understanding of what takes place at the moment is that there is a border review within the total government of this project and that, that is expected to take place within a reasonable time.

As I mentioned in my earlier remarks, my understanding is that there will be, in fact, four documents that will be reviewed and agreed within the same timeframe and one of those four documents indeed deals with the sale of the LNG from the project.

So, notwithstanding the fact that we will pay to progress this project without the formal sale of LNG, I think it's reasonable to expect, although not -- certainly I can't confirm it, but it's certainly reasonable to expect that the LNG will be sold at the time all these documents are signed.

In relation to the comments from Ophir which of course is the Equatorial Guinea project, I think the comments of Nick, the CEO, if he were to say that he is progressing now with the marketing process, but he certainly is not at the same point in that process that I understand, Perenco to have reached.

Okay, that's clear.

How do you view the expansion of the Perenco projects developing?

There is a, if I understand well, a process from Gaz de France whether to complete the FEED study before its land-based terminal.

How was this process going and have you started any discussions about potentially expanding the scope of the Perenco contract to the remaining two trains?

So our focus here is very clear.

What we want to do is conclude the contracts that we have in front of us.

And then should in the fullness of time more gas be allocated to our projects, for sure there is more gas in the ground, but at the moment our contract is based on an allocation of gas.

Should we be allocated more gas and we think we're in a very strong position to turn that gas into LNG.

But at this moment in time we are not looking to push up that discussion.

Our focus is very much in front of us to get the deal that we have in front of us signed and executed.

Thank you Gary.

You mentioned in your press release that you are looking -- the project that you are looking at trying to develop a standard gas associated flare gas in different parts of the world.

Can you tell us what are the differences in the economics of different regions?

Do you see pretty uniform cost of developing the gas across the different projects that you are exploring?

And also if you can comment, what do you think is the major obstacle in order to have all this project successful?

Is it a matter of financing over this project, is it a matter of being able to sell the gas and the signing of the agreements?

Or this is something that can happen without long-term sale and purchase agreements through the sale of gas to the spot market?

So just thinking through the structure of the projects which we're progressing.

I think what is unique to our [offering] is the toll arrangement which we offer is constant, no matter what geography we operate within.

And I'm excluding taxes from this discussion, but we go in with if you like, something that looks like a floating shinier and we can do that in every geography in the world.

So the things that then determine the economics of the project as a whole is, at what price can you make gas available to the vessel?

And in some locations such as in Equatorial Guinea that's about upstream development, drilling and producing the gas.

In other locations it could be about just taking pipeline gas and liquefying it.

So the variables are, at what price can you get gas to inlet flange of the FLNG vessel?

Our toll is constant.

Them the third and fourth dimensions are, what market are you looking to serve and what is the cost of freight to service that market?

So it really is as simple as that.

So if you think about it, if we can produce or access gas in say West Africa, let's say $1 or $1.50, our liquefaction toll is comparable to the most attractive toll that you will find anywhere else in the world, so that's let's say $3.50.

So long as we are within reasonable proximity of a market such as Europe, then typically we are $2 to $3 for mmbtu cheaper than anyone else.

Okay, that's very helpful.

Brian, I would like to ask you about the form of the contracts with Keppel.

You've already spent $420 million for the first FLNG and you have two more going.

Are there any set payment dates for the conversion contracts order?

Is this something you can adjust the payments and manage your liquidity at your preference and according to how the projects are developing?

Our apologies ladies and gentlemen.

We seem to have a slight interruption in today's conference.

You'll be listening to music and we will recommence the conference shortly.

We were cut off.

I'm sorry about that.

Would you repeat the last question please?

I would just like to understand the nature of the contracts with Keppel since you have three vessels for quite a large amount.

Are the payments flexible?

How are order set milestone payments, installment payments that they have to be paid due to the progress?

Do you have any flexibility to move around the payments on the progress of the conversion?

Okay, since we've tackled the three contracts we have today, as you rightly alluded to, we spent $420 million on the Hilli already.

So as far as that is concerned, once the tolling agreement and all those agreement that Gary has been talking about that we expect hopefully to have been ratified by the end of September, then really the Hilli is fully funded and we can draw on the facility that is already in place.

So as far as that is concerned, the Hilli would be funded at that time.

The constructs of the conversion agreements in respect to the Gimi and Gandria is such that the maximum exposure that we have today, until such time as we make fully the notes to proceed on those, is $65 million of which $50 million has already been paid in respect to the Gimi.

There is an additional $15 million that we have to pay with respect to the Gandria between now and Q2 2016, unless of course we have firmed up agreements, employment on those two, then we really don't need to spend anything else.

The exposure is very limited and in fact it's looking very unlikely that we're going to be able to get employment contracts on those.

We would terminate ahead of that and at least $30 million of the $65 million spent at that time would come back for the Hilli conversion.

And of course there is a certain amount of alignment between ourselves and Keppel and BV to the extent that, that relationship grows stronger and we would expect that in the event we needed to extend the time we needed to be able to firm up some employment, I think there would be some flexibility there also.

Thank you, Brian.

One last question for me that has to do about Golar Partners.

It seems that it's been trading right now at a very high yield, and even below the liquidation value.

Are there any thoughts here about how you can enhance the value of GMLP and potentially even changing the IDF splits?

I don't know, even rolling into the GLNG at some point if it continues to trade at such a steep valuation discount?

I think, certainly, we are aware of the yield that the MLP is producing at the moment which is why the Board of Directors approved a potential purchase of up to $125 million worth of buyback of MLP units.

And we have done some of that already.

I think it's obviously, important for Golar LNG Partners to do two things.

One is to continue paying dividends, at the very least, in the current level that it is able to do at the moment.

And I think just even looking at the previous presentation by Golar LNG Partners, it is more than capable of doing that.

The coverage ratio job that company has been very healthy and very strong over the past couple of years, and of course there is a question of growth of the MLP.

I think it's fair to say that the MLP when it's looking at the growth perspective is always pointing towards the fleet of Golar LNG Limited.

While there is no immediate candidate for dropdown at Golar LNG Limited, as Gary said the FSRU world is very positive.

And not least, from 2017 onwards a big chunk of growth is going to be brought over by the FLNG projects of Golar LNG Limited.

We haven't looked at -- we've thought about it, but haven't looked at completely whether we needed to change the structure of Golar LNG Partners.

We don't think there's an immediate need for that, but certainly it's something that we would continue to consider as that yield develops also.

Thank you Brian.

Thank you Gary.

Thank you Fotis.

Erik Stavseth, Arctic.

Hi guys, first one for me relating to the CapEx of Hilli.

You've spent $420 million, that's fair enough, but could you tell us how much you have spent on the contingency part of your conversion CapEx?

I can't quite remember exactly off the top of my head, but it's less than 10% of the available.

It's vastly intact Erik.

Okay.

Second question relates to the financing of the Hilli.

You do have at least some decent cash flow attached to that even at this point, but how much do you think you can finance without the contract, i.e.

financing just against the asset itself?

You mean with the Perenco contract?

Assuming you just had a units on order and you didn't have a contract against it, would you be able to finance at 50% at that point or would you have to have some kind of contract against it?

One thing to remember of course is that ultimately, right now the vessel is financed, and we're very much reliant on the contract because the contract for Perenco doesn't really kick in until 2017.

That is to say that the cash from operations under that, so really the banks are relying on two things.

One, is the asset that is being built and two, to some extent Golar is credit standing.

During this periods, the leverage takes us to around $700 million.

It's more than 50% of the project cost.

I'm not necessarily saying that we will continue to achieve that.

Of course we will try and even push that further, but if you want a precedent, that's already been set the marker.

My point is that it's quite unique to see that kind of high contracting or high debts with such low, call it, coverage for the unit.

Generally in LNG it's contract first and then financing, whereas here it's more contract units and then financing.

We like to do things differently, as you have already seen.

On the Cool Pool how has the reception in the market been?

Are your clients generally happy about the Cool Pool or are they concerned about having to pay more for transportation?

Erik let me deal with the latter part of your question first.

There's no sense here that necessarily anyone will pay more for the vessel.

That's clearly not what we're seeking to achieve.

What we're trying to be here is be more efficient and not having to position vessels for particular voyages.

The market reaction I would say has been neutral to very positive, and maybe confused to very positive.

So I think some people are still digesting how this will play out.

But certainly if you look at the people who regularly charter in that business, so the traders for example, they have all been very positive to this development.

It does open up to them alternative models and I mentioned previously the possibility of CLAs, we're able to build much more promptly, much more efficiently to requirements.

And you've got now a fleet of 14 modern, state-of-the-art LNG carriers I would argue managed by the three best governors in the business.

So generally, well we'll see.

Of course, we haven't done our first picture yet so we will see how we go.

Thanks and last question for me relates to the Golar power.

You mentioned the [gen]-power project in Brazil and also 15% return.

I realize it was early days and then a small investment from you guys, but could you just walk us through some top-level math on how that project would work out in terms of returns?

Let me give a little bit of context.

Our partner Gen-Power, earlier this year won what was essentially an uncontested auction to provide a 1.5 gigawatt power station and was able to secure that opportunity at record high power prices in Brazil.

Our initial involvement in that project really was as the FSRU provider, but as we work with the project more closely and started to identify a number of aspects of that project, we realized that there is more to this project than what initially we thought.

In particular, there is the opportunity to secure the capacity in the FSRU and that FSRU is connected to the Brazilian gas grid.

So there is the option to provide LNG to the gas market in Brazil, in addition to servicing the requirements of the power session.

The power station, because of the outcome of the auction, is of itself an attractive investment.

And then, if you happen to look east from where that power station is being built, you will see maybe one or two of our FLNG vessels.

Really what our thinking is, the investment [as a] standalone is interesting.

It employs an FSRU, but if we can use this as maybe not this example but this concept, as a way of pulling through more FLNG projects then it becomes hugely beneficial.

And we are seeing as we develop the FLNG projects that we are currently discussing, if you can remove the complexity and the project risk that typically you encounter on these projects, you speed the process of investment decisions quite materially.

That's all for me.

Thanks.

Thanks, Erik

Ben Nolan, Stifel

Thanks and I will try to be quick here.

Firstly on the Tundra, clearly as you said, you are more aggressively marketing that to other locations.

Any sense of the timing, stepping back and assuming that it does not go to Ghana.

Any sense of how soon something else could be put together and maybe any sense of the geography?

So our discussions really are again in a number of different geographies.

It's difficult to predict exactly where the Tundra will go.

Indeed there are other opportunities within Africa, but also in Asia, also in the Middle East, also in South America, so we remain hopeful that we will secure employment for that vessel within the first half of next year.

Really, given the maturity of those discussions it's difficult for me to be more definitive than that at this moment in time.

Okay, so probably not an announcement by the end of this year?

Is that a fair assumption?

I'd like to think there could be.

But I don't want to create false expectation either.

We are working hard.

There are a number of discussions ongoing.

There is certainly one of those opportunities that could well take a decision by year end, but I don't want to sound overly optimistic.

Clearly we're casting our net a little broader.

For a time we were quite focused on Ghana.

We are appreciating now we that may have to look broader.

It's not impossible that Ghana could happen in the timeframe as well.

Okay, and then with respect to the other FSRU that you ordered -- two things, first of all you didn't put the pricing there, I'm curious as to why that might be and what the CapEx schedule may look.

Obviously, it's nice to only have 5% of it initially.

But curious what the subsequent CapEx schedule of that would be?

And then also, with respect to the two options, what is the timeframe in which you need to exercise those?

Ben, I will talk about the CapEx and the price of the FSRUs and actually there isn't very dissimilar to the FSRUs that we had previously ordered, so it's along with those pricing.

As far as the CapEx is concerned it's a fairly flat CapEx.

We have tried to put as much as possible at the very backend.

The 5% is a good measure of that, I'm not suggesting that, we don't now pay anything until the delivery of 95%.

There is some payment milestones ahead of it, but it is also pretty much in line with that number.

Okay.

And the timing on the options?

Late 2018.

Okay, and then my last question relates to something you said earlier about Venezuela not being on the list of the potential for the third FLNG vessel, assuming that's the Rosneft deal.

Is that still on the table for longer-term or is that no longer something that you are looking at?

No.

Rosneft suite of opportunity still sits within our development funnel.

Really, what we are focused on right now is, as quickly as we can progressing and maturing an opportunity for 2018 startup, and our sense of that opportunity in Venezuela with Rosneft is it's going to take more time.

Okay.

All right.

Very good.

I will turn it to someone else.

Thanks.

John Chappell, Evercore ISI

Thank you, good afternoon.

Three quick follow-ups for you guys.

First of on the 2018 GoFLNG with the four short list of projects, I want to ask you for timing on that, because, obviously, it's probably still up in the air.

But realistically when would something have to be set in stone to actually start producing gas by 2018 when that asset would be delivered?

We have somewhat arbitrarily set ourselves the objective of maturing one of those opportunities to a similar level of maturity as we have today with Ophir within the first quarter of next year.

I think if we're not at that level of maturity within that timeframe, the chances of us actually getting to a 2018 startup is remote.

Having said that, the date of 2018 is somewhat arbitrary as well, so it's not impossible we could be starting up early 2019.

These things move around a little bit, but if we truly want to have a mid-2018 startup then we've got a window of maybe six months to mature that opportunity to the same level of maturity that we had with Ophir in Equatorial Guinea.

And I would just say, we progressed that discussion with Ophir within a much shorter time frame than what we're contemplating here.

We have proven it can be done and again, importantly, the economics of our proposition don't require you to have an advanced security buyer because we're pretty confident under almost any oil price or LNG price regime our project will be economic.

Right.

It looks like the FID for the Ophir project was about 12 months after you signed.

Would we assume the same type of window there as well, or would it need to be by the end of 2016?

Not necessarily.

In Ophir the time between when we signed the term sheet to when we expect to take FID has been governed by the time Ophir needs to do their upstream FEED and cost estimation.

So they've got a significant amount of work to do to sign off on their upstream development.

In some of the opportunities that we're currently contemplating, basically we're hooking into pipeline gas and so it's essentially a plug-and-play job opportunity which could get you to FID in a much, much shorter timeframe that we're contemplating in Ophir.

It's the upstream dimension of Ophir that dictates the longer timeframe between now and FID.

Got it.

Understood.

Brian, given the new potential timeframe on the Tundra contract, you did mention the financing sounds like it's pretty close.

How much do you need from a debt financing perspective on Tundra and how should we think about the terms relative to maybe what we thought about three months ago where we thought there be a contract in place at delivery?

Actually the way we've been approaching this of course, given there is a potential for the contract to be delayed a little bit, is that we have been discussing two fronts.

One is where the vessel will have a contract and one where the vessel doesn't have a contract.

And both of those are very similar in terms.

Obviously, one is slightly lower in loan to value, but otherwise pretty close to the terms we signed with respect to the latter four delivered vessels, four delivered ships earlier this year.

And from an absolute total perspective, is it like 60% of the asset value?

Much higher than that.

Much higher.

Like 80%?

Got it.

One last thing, the only pushback we seem to get on the FLNG so far is still on new technology concerns.

You are at 60% completion of the construction.

As it relates to things like size or weight of the top sides or potential sloshing issues, at this stage of construction completion are you pretty confident that none of the issues that may be out there that you were thinking about, before you move forward, are feasible?

So let me just deal with one aspect of your question first.

We're 60% of the project completion, which doesn't necessarily equate to 60% of the construction activity.

That 60% includes a very significant effort on the design and the procurement front, as well as the actual physical building of the vessel.

As I think I said in some of my earlier comments, the key challenge here has really been around the physical design of what we're building.

All the elements of the concept, so the liquefaction trains, the top side, the vessel, the storage, the sloshing, all the things that you mentioned are well proven on land.

The vessel has trained as a vessel for many, many years, the concept of LNG ship to ship transfer, we have been doing since the Golar Spirit, our first FSRU project, which has been operating in Brazil now for getting close to 19 years.

So all those components of the project or the concept are well proven.

All the elements that go into the vessel, the gas turbine, the compressors, the pumps, the columns, are all operating somewhere in the world on a floating structure, whether it's an (inaudible) or something similar.

So at the component level, the concept level, and indeed each of the elements of our design, all of that is well proven.

The challenge to us has been, how do you put all this together with the limited space you have available within the vessel?

If you look at our vessel compared to a conventional land-based LNG plant, the obvious and stark difference is that we don't have the real estate that a land-based project has.

So the challenge has been to fit it all together, [while] that is compliant with those codes and regulations.

That is behind us, essentially now, and so the challenge still remains to build it and then to start it up; but I feel that we have really come a long way and I don't want to understate the importance of what remains in front of us.

Really, what we have in front of us is a bigger version of what we have done with the other FSRU projects in terms of building it, delivering it and starting it up.

Great.

That's very helpful.

Thanks Gary.

Thanks Brian.

Sunil Sibal, Global Hunter Securities

Hi guys.

Quick question from me on FLNG.

I was kind of curious, as you have gone through the first FLNG and subsequent FLNG that you go through, is there an expectation of loading of the FLNG building cause you perfect this whole process?

I think two things, two comments I would make.

Typically the service industry that is servicing our projects don't have a lot of other activity at the moment.

So where I think it's easier than it might have been for us to scale up, so when we talk about a potential fourth project we're generally well received by all our suppliers.

I think that's a sign of the level of activity in all the various markets that feed into the FLNG.

So somewhat counter-intuitively this is a good time for us to be doing what we're doing.

Clearly, as we have concluded our first unit we learned; and indeed the second, third and fourth units, should the fourth be built, are for the large part carbon copies of the first unit.

It's really just replicating with perhaps some learning from the earlier vessels as we do the subsequent vessels.

So there is an expectation that we will finesse the CapEx, both as a result of the market which we're currently working in and also as we learn.

But in terms of the overall project economics, is it going to be material?

I'm not sure I'm going to predict that.

We are confident though that the cost will head down rather than up with the subsequent units.

That very helpful.

And then when you think of your competitive position in the FLNG market, especially with regard to the first (inaudible) advantage I was wondering if you could handicap where you think the rest of the competition is in terms of the timeframe?

Are any of the aspects, cost aspects of the business of FLNG?

So I think there are two FLNG markets.

I think the shale prelude, big end market is not, clearly not where we are playing, so at our end of the market so relatively simple liquefiers, sort of 2 million to 2.5 million per annum, 1 to 2 cf of gas, that's sort of our sweet spot.

We are not conscious of any real competition now and I guess we kind of hope it stays that way for a while.

Our experience with FSRUs was a little bit constructive here.

As Brian mentioned earlier when we went into FSRUs, some people were skeptical, others didn't want to be first mover, eventually the concept got accepted and today the question is more why aren't you doing an FSRU, rather than why are you doing in FSRU project?

It's not seen as that risky at all and by that time other people come into the space.

It's hard to predict how quickly this market will mature.

And how quickly others will come in.

We're not so arrogant as to assume we will have the space to ourselves forever.

We do know we have a good understanding of the effort it has taken us to get to this point in time, and we know that from anyone else who follows in our footsteps is a considerable amount of work for them to do.

And I would say also, a considerable amount of courage to take on what we're doing.

That's all I have.

Thanks.

Chris Wetherbee, Citi

Hi, great, thanks for taking the question.

I guess I just wanted to come back to that question about competition, but more from an FLNG perspective.

Just wanted to get a sense, assuming everything gets signed by the end of September and we have the Cameroon project moving forward as expected, how do you think about competitive investment in this technology with Keppel, other potential opportunities at other shipyards?

I just wanted to get a sense of maybe how you see the competitive market or dynamic developing in the next year or so, assuming success in these first ventures?

It's hard for us to predict what's happening with our competitors.

We draw comfort from the fact that we're working with the best in partners in what we're doing.

We think there is no doubt that Keppel, certainly the premier shipyard when it comes to taking on this sort of projects they're doing their positionings conversions, second to none.

And similarly we in no doubt that we have the best partner with Black & Veatch in terms of the topside.

We're in a very strong position and we're confident that we will continue to secure their support as we take this business forward.

And I guess it's for others to develop their own business model.

And no doubt they will, but I guess as I said in my previous answer it's going to be a challenge for them.

As it has been for us.

This is a journey that started for us many years ago and we're seeing a lot of hard work by a lot of people come to fruition.

And hopefully, when we sign the contract with Perenco in the next several weeks it will be a validation of a lot of hard work by a lot of very talented people over a long period of time.

How others actually replicate that, and no doubt they will, but I think it will take some time.

Okay, that's sort of my view you have at least a multi-year head start on competitors, and I guess we see where it goes from there.

The other angle of my question was sort of around how you think about valuation of some of these investments in the competitive dynamic, just curious if you have thoughts on that?

I'm assuming the conversion opportunity that you are in discussion are all relatively or at least the last two are relatively similar from a price perspective, just want to get a sense of maybe how those conversations evolve over the course of the next several months?

The way we have positioned our proposition as we talk to potential clients, is really to benchmark ourselves on the US Gulf of Mexico alternative.

So really that's our benchmark.

We feel that we can be competitive against the US Gulf Coast [grandfill] conversion projects, of course the advantage we have is that we can do that in any geography and we build in Singapore and so our CapEx is in fact lower than typically the US Gulf Coast projects.

That puts us in a very strong footing when we actually sit across the table with potential clients, and at the moment at least, there is no better alternative for them (inaudible).

Okay, that makes sense.

One final question, just want to make sure I understood your comments particularly around the Tundra, as far as the way we should be thinking about this, you hope to get something done by the end of the year, but maybe sometime in 2016.

Is it more likely with delivery expected it is still the fourth quarter of 2015.

Is that right?

That's a reasonable summation

Okay, that's helpful, thanks for the time guys.

I appreciate it.

Thanks Chris

Shawn Collins Bank of America/Merrill Lynch

Great, thanks, hi Gary, Brian and Stuart, good morning and good afternoon.

Good morning.

Thank you.

I just wanted to turn to the changes in the Board of Directors.

I wanted to inquire into why Sir Frank Chapman is stepping down so soon after only joining the Board a year ago last September?

I know it's largely a personal decision, I know you cannot speak for him, nor would you want to, but can you just talk about that impact on Golar LNG?

Sure.

We've had two board changes announced.

So Kate, after a very long time and service to Golar will be stepping down at the AGM next month, and indeed Frank, similarly has elected not to seek reelection from the Board.

I think from the Company's perspective, from the Board's perspective and from my personal perspective we're very grateful to the contribution that both Frank and Kate have made.

Particularly it's been helpful to have Frank around as we have matured the FLNG projects particularly strategic and risk management perspective.

He's been extremely important to us there.

We wish him well.

As you rightly say, I can't speak for Frank.

I think it's been well covered in the press release, he for his own good reasons has chosen to devote his time elsewhere, and will not continue with Golar.

I think we have been very fortunate to have him on the Board for the period that we had.

We are grateful for his contribution and we will march on.

This story started well before Frank joined us.

He, for sure, has shaped it and he's been with us at a very important time in the evolution of the strategy, but we have a lot of talented people in Golar.

We've got a very, very high-class board.

We've got Dan Rabun coming in as the new Chairman and the story will continue.

There won't be, I'm very confident to say, there won't be any change in direction, strategy, intent, as a result of these Board changes.

Great.

Thanks Gary.

And my last question, turning to the LNG carrier market, understand that the market was soft and under pressure in the quarter.

I know you cited that you expect some solid improvement in third quarter.

Can you just provide some context what solid improvement means?

Utilization was at 33% and rates were in 25,000 to 30,000 per day level, how much improvement might we possibly expect in the third quarter?

Let me, in answer to your question give you a snapshot of where we are today.

So if you look at the 10 year builds which we've taken delivery of over last 12 to 18 months, right now 8 of those 10 vessels are in employment and 1 of the 3 steamships, so that's a big step up in the 33% employment that we saw across the last quarter.

I think it's fair to stay, notwithstanding, the utilization has stepped up, the rates have not yet followed, but generally we need to see the utilization of the fleet tick up before we start to see rates turn.

We're hopeful that the projects LNG, Asia-Pacific LNG, Curtis Sabine Pass, all get going as advertised, and there's a bit of a dynamic in the market which we also see, which is that the Far East buyers are not buying at quite the volume they have historically been buying.

And to the extent that this new production comes on stream, it may be looking for markets further afield, which of course is good for shipping.

Ultimately, I think we're going to see Cardoza diverted into Europe which is really the only liquid market open to LNG with the US now no longer a [payer] of LNG.

So the signs are all there for it to improve.

If we look today, as I say, 80% of our new builds are on hire, the rates are pretty much as per we've have indicated in the press release, but the utilization has to tighten first before the rates follow.

Also as it relates to Q3 operating results, one thing that disappears from expenditures of course is the Golar Eskimo charter endcosts from LNG Partners.

As long as that necessarily improves performances of the vessels it certainly should improve the operating results for third quarter.

Great.

That's very helpful.

Thanks Gary and Brian, I appreciate the time and insight

Thank you.

Could the administrator please take the last question for the call?

Magnus Fyhr, JMP Securities

Thank you and hi Gary, hi Brian.

A quick question on the CapEx going forward.

You have the Hilli project fully funded, I think you are only going to spend $15 million on the Gandria over the next 12 months and the other FLNG projects remain on hold until you get an FID, what's left to spend on the Tundra?

Can we assume that this [full] will be debt financed the remaining CapEx?

The answer is yes.

The old the remaining installment in the Tundra is really the delivery installment which is going to be either the end of November or beginning of December and that will be fully debt financed.

Okay and what is that amount, can you disclose that?

I'm afraid I can't, but it's similar to the previous FSA installments you've seen in the past.

Okay, so basically over the next, in 2015 and 2016, you don't have any CapEx unless you go ahead with these FLNG projects correct?

Correct there is small CapEx in respect of the FSRU that we ordered in July, but as I mentioned earlier, again they're pretty small simply because we have negotiated small installments until you get to the delivery points.

Okay, great that's all I had.

Thanks.

Okay, I think we need to draw it to a close there because we've got Partners coming along very soon.

So, my thanks to everyone and we look forward to joining you again at the next quarterly results in November.

Thanks all.

Thank you.

That will conclude today's conference call.

Thank you for your participation ladies and gentlemen.

You may now disconnect.