Good day, and welcome to the Q1 2012 results presentation. Today's conference is being recorded. At this time, I would like to turn the conference over to Brian Tienzo. Please go ahead, sir.

Thank you. Hello, everyone and apologies for the delay in this presentation. We unfortunately hit a technical glitch. Anyway, we're all here, and welcome to Golar Energy's First Quarter 2012 Earnings Presentation. As the announcer said, my name is Brian Tienzo, and I will be taking you through the Q1 highlights as well as our financial highlights. I am also joined by our CEO, Doug Arnell, and he will take you through business updates and outlook. So let's start by turning to Page 4 of the presentation. So Golar LNG reports a Q1 2012 consolidated operating income of $27.8 million and net income of $15.2 million for the quarter Q1 2012. We increased cash dividends to $0.35, which represents an increase of $0.025 from previous distribution and is in line as a result of improved income and a strong financial position. We saw Golar Arctic and Golar Grand commencing in their new charters during the quarter. The unrealized EBITDA for both charters are around $84 million. Nusantara Regas Satu, formerly the Khannur, completed its technical conversion in March. She then sailed from the yards in April, and she was presented ready to the charter on the 4th of May, and, hence, she starts on hire from then. We successfully raised $250 million through a convertible bond transaction that was concluded in March. We -- further on, we also ordered 4 newbuildings during the quarter, 2 of which are with Hyundai and 2 with Samsung. The reactivation of Hilli and Gandria are continuing and are nearing completion now. We expect the marketing for those 2 vessels to commence next month. We continue to see LNG shipping markets remaining structurally tight through to the middle of the decade. Let's now turn to Page 5 to go through our financial highlights. So our net operating revenues for the quarter is $82.3 million, which compares to $79.6 million during the fourth quarter. The increase there is partly due to a full quarter earnings of the Gimi. The Arctic and the Grand also commenced their charters in March. Arctic obviously, as we previously announced, is -- will be contributing approximately $45 million in annualized EBITDA whereas Grand will be contributing approximately $39 million in annualized EBITDA. Unfortunately, during the quarter, we had to take to our operating expenses certain expenses that are in relation to the reactivation costs of Hilli and Gandria. These expenses are repairs in nature, and so they couldn't be capitalized. The total reactivation costs for Hilli and Gandria are, nevertheless, on budget, and so we shouldn't expect anywhere near this operating expense during the second quarter. We booked a gain on acquisition of assets during Q1 of $4.1 million, and that was in respect of buying the remaining 50% of the company that owned the vessel Gandria, and as a result of that purchase, we also had to revalue the carrying value in our books, and the combination of those factors basically concludes our $4.1 million gain. Net financial expenses for the quarter is higher, $8.8 million versus $5.6 million in Q4. And the main reason for that is the convertible loans that we completed in March and also some mark-to-market losses on currency swaps and forward currency contracts. All of those taken together leads us to a net income during -- for the quarter of $15.2 million versus a Q4 net income of $17.2 million. Having said that, TCE for the quarter is higher at $90,464 a day versus Q4 of $86,521 a day, and again, that's mainly due to the full quarter revenue of Gimi and contribution -- higher contribution from Arctic and the Grand. Utilization for the quarter is also very good at 99.5% versus 100% during Q4. Of course, as we mention in our press release, we expect Q2 operating income to be much better than Q1. The factors we had to take into account, of course, is that Khannur will be on hire throughout for most -- sorry, for most of Q2. Arctic and Grand will be on hire throughout the quarter. We expect operating costs to come down because we won't be incurring as much on the reactivation costs as we saw in Q1. We also expect admin costs to be either stable or lower than Q1. That will be offset slightly by slightly higher depreciation as a result of Khannur becoming operational, and all of that essentially leads us to an operating income that will be much higher than Q1. Let's now turn to Page 6 to just quickly go through our net revenue and EBITDA graph. I mean, as you can see there, it has -- it was improving quite well to Q3. But because of higher administration costs and, to some extent, slightly higher operating costs in Q4, the EBITDA dropped. But again, that was exacerbated by high operating costs this quarter due to the reactivation costs that we had to take to the income statement in respect of Gandria and Hilli. Let's now turn to Page 7 to quickly go through highlights in our balance sheet assets. So we've highlighted there the newbuilding line. The main movement, of course, as we already mentioned, is we ordered 4 newbuildings during the quarter, and that's the gap between December '11 and March 2012 essentially gets to reflect these installments paid during that quarter. Over the page of highlights of the main movements in our liabilities. Long-term debt is where the big movement is, from $627 million in December to now $839 million in March. And the main reason for that is the convertible bond that we entered into and concluded in March. Just going over the page to Page 9, which is the summary of our cash flows. The first highlighted number there is additions to newbuildings and vessels and equipment. Again, the main movement there just reflects the 4 newbuilds that we entered into during the quarter and also an installment on one of our existing firm ordered carriers. Further down the page, we see 3 numbers that are highlighted. Proceeds from long-term debt, which is the convertible bond. And then you've got the proceeds from long-term debt from related parties and repayments, and that was in respect of sort of an interim extension of the World Shipholding loan that we had entered into but which we repaid as well in the same quarter once the convertible debt had been concluded. So in summary, we then -- we look at Q2, where earnings look to be promising. Certainly, the growth in earnings is going to be fairly significant from Q1, given the earnings of Khannur, Grand and Arctic. And of course, there are potentials also from Maria, Hilli and Gandria. And on top of that, the balance sheet position of Golar is strong with the potential acquisition by Golar LNG Partners of Nusantara Regas Satu, and that will contribute cash to satisfy some of our newbuilding commitments. And on that note, I'll now try -- I'll now turn the presentation to Doug to go through the group's structure and business update.

Thanks, Brian. Yes, just starting on Slide 10, then, with a review for those who aren't familiar with the Golar Group structure. The group consists of 2 principal entities, Golar LNG Limited and Golar LNG Partners LP, both separately listed entities with different approaches. Golar LNG, which holds 65% of the MLP, is our growth vehicle. It's where we do our project development, our efforts, our new projects, newbuildings, our spot and short-term charters of vessels. It's very much a growth-orientated stock. Golar LNG Partners is our MLP. It's a stable-cash-flow yield play. It currently has assets and will continue to have assets with long-term committed contracts with stable revenues. So these 2 entities we feel have -- a very good combination for Golar. Golar LNG Partners has an option to purchase any asset that Golar LNG Limited is able to achieve a long-term contract longer than 5 years with. With that sale from Golar LNG Limited down into Golar LNG Partners, that raises -- it's a very efficient vehicle for us to raise funds for Golar LNG Limited to continue its growth. And the key to the whole structure is that you have Golar LNG with a large upcoming fleet expansion which creates significant fleet stock potential for MLP. The next near-term dropdown, as Brian alluded to, will be the Khannur, or now known as Nusantara Regas Satu, which we are beginning discussions for that dropdown, but certainly you can expect it in the near term. Moving to Slide 11, just a little -- a couple of slides on the current market, which continues to be very strong. This graph is showing the progression of the spot and short-term charter rates. You can see, as we came through the winter, as you would normally expect in the LNG market, you have a lot of ships coming off of wintertime charters. You also have a bit of a lag in the demand in Asia. And certainly this year, we saw that Japan and Korea had well stocked themselves through the winter. So you definitely did see spot and short-term rates coming off as we came into the springtime. Both for the end of the first quarter and certainly presently, that trend has reversed. We're seeing spot rates strengthening. But I think the key through all that period is that winter 2012, 2013 certainly remained strong through that period. Anyone looking to charter vessels for that period, which there aren't many, were looking to pay above these rates, certainly in the $145,000- to $155,000-a-day range. Moving to Slide 12, just a graphic of how the progression of ship demand looks like against the fleet. I just want to point out that on this graphic, it's based on what were called number of normalized ships, being 160,000 cubic meters. So when you talk about fleet size, this isn't an actual vessel count. It's a normalized vessel count to standardize on the size of the ship, which is 160,000 cubic meters. Of course, a lot of the existing fleet is smaller than that. But a lot of the newbuild fleet, including our ships, are exactly that size. So you can see that the structural tightness in the market is looking to sustain all the way out through into 2015. We believe that an optimum time to be bringing new capacity on to the market is exactly where our newbuild orders lie, which we'll show you in a little bit of time. That gap in 2013 and even moving into 2014, we believe, is an optimum time to be looking at initiating new charters. Keep in mind also that much of that fleet and much of that stack will be older-generation vessels, including first-generation vessels which are much, much more inefficient than the new vessels, such as Golar's newbuildings, coming on to the market. There is upside potential to this graphic. There is potential for debottlenecking in Qatar, which is not included here. We have a little bit of U.S. export rolled into these numbers, but only Sabine Pass, whereas as I think people are starting to realize there is a much greater potential there if the stars align correctly in the U.S. for a much more capacity to come on. And then we've layered in some maybe longer-term things further out in Brazil and Mozambique later out in the decade. So I don't think we're over-egging on the production side of this graph, and so it's still a very optimistic picture in our minds. Moving on to the next slide. Slide 13, just to detail our -- the Golar Group's existing portfolio, of which there's been a fair amount of activity through this year. The top part of the graph is the Golar LNG Partners fleet, the new addition -- the newest addition being Golar Freeze, which was the fifth vessel that went into that entity. The others are 2 carriers, Methane Princess and Golar Mazo, and then the other 2 FSRUs that have been operational for some time, Golar Winter and Golar Spirit. Looking down at Golar LNG Limited's existing fleet. Nusantara Regas Satu, formerly the Khannur, is just in commissioning activities in Indonesia. I'll talk about that more later. Gimi is on charter successfully. We're very happy with Gimi's performance since her reactivation as a first-generation vessel. Virtually 100% uptime since we brought her on, and we expect to -- her to be the same through the rest of the year and into 2013. Gandria and Hilli, just completing their reactivations. In fact, the capital work is essentially done, and they're both kind of into testing and the gasification [ph] process. So we expect to be marketing those vessels through June and we expect the demand to be good, so we're quite optimistic there. Golar Viking just started a new charter on May 1. That should extend out into 2013 as well. Golar Grand and Golar Arctic starting new charters on -- in quarter -- Q1, and Golar Maria available for charter coming up. Moving to Slide 14. Again, we are expecting Q2 to be a very good quarter for us in terms of EBITDA growth, both from in terms of operating cost reductions and but principally in terms of our fleet really showing the strength of having prompt availability for the tight market that we also have coming in 2012. So Golar Grand and Golar Arctic will both be on hire through the whole quarter. Again, annualized EBITDA there of $8 million. Golar Viking commenced a new charter on the 1st of May. Certainly it as well has the higher rate that's much improved over the charter it was on previously. And then, of course, early May, we delivered the Khannur, or Nusantara Regas Satu. Way that charter works, as soon as the vessel is delivered to start testing, she goes on hire. So she's on hire from May 4. Gandria and Hilli, we hope to get on charter on June. Golar Maria, obviously a newer-generation vessel, comes off her existing charter no later than August, and we're very optimistic, actually, about the market value of Maria, especially chartering through this upcoming winter. Turning to Slide 15 in our newbuild order book, which we have continued to increase the size of that order book. During the first quarter, we added 4 newbuild vessels to our new fleet, 2 of them from Hyundai, 2 of them from Samsung. Very similar characteristics of all 4 vessels, the Hyundai vessel slightly larger. Both the -- 3 out of the 4 vessels in that order will be delivered in 2014, one of the Samsung vessels will be early 2015. All 4, again, cutting-edge technology, tri-fuel engines, very low boil-off rate and 19.5 knots charter speed. So again, our order book now stands at 15 vessels in total, 2 of them FSRUs. And we also have 4 total oxygens [ph] along with these new orders including the ability to convert some of the carriers into FSRUs. So I talked a little bit about the structural tightness in the market coming in from present day all the way into late 2014, and this is the open positions that we have carrying into that. We feel it's a very positive market. The vessels at the top, of course, part of our existing fleet, either starting charters this year or early next. And then we get into our fleet of new carriers starting delivery in August of 2013 and continuing all the way to late 2014, early 2015. Turning to Slide 17. I'm going to spend a little bit of time on our FSRUs. We do see the market -- FSRU market, of course, has been quite active over the past few years. There's always a long list of project developers out there looking to access the FSRU's technology in order to initiate new import projects into markets. I think that we tend to look more at the number of projects that have credible developers with sponsors who have an ability to get those projects going. We believe the list of 20 or 30 projects that everybody touts around the world as new FSRU projects, many of them have little or no ability to move forward. So we look more at the number of projects that have access to supply, have sponsors that have the financial capability to get it done, and that's where our optimism is coming in, in the rest of this year. We are recently shortlisted on 2 projects, and on the third project, we had been shortlisted earlier nearing a decision. We feel that these projects that we're looking at are very, very credible projects. Projects that we feel will likely go ahead, and, thus, we think the potential for a firm award for us for the rest of this 2012 is quite high. Again, West Java, the conversion is completed, vessel delivered. She's currently moored offshore Jakarta and going through commissioning. And we are looking, of course, at, once that contract is operational, dropping the asset down into the MLP, and we're also well advanced on bank financing supported by the Nusantara Regas Satu charter contract. Moving on to Slide 18, just to talk quickly about the existing FSRUs in Brazil and Dubai, Golar Spirit and Winter operating in Brazil, Golar Freeze operating in Dubai. I think one of the keys that we bring to the market and why we're always in with a good chance for new FSRU contracts is that operating FSRUs has a level of complexity and sophistication beyond that of operating LNG carriers. We gained that experience starting in 2008 in Brazil, and we've continued that up to date. We've been very successful with our operations. We believe our charterers are happy with the operations, and we're averaging less than 0.2% downtime across the operating fleet. So we are very happy with that performance. Turning to Slide 19, just a few pictures from Southeast Asia with our Nusantara Regas project, which we are actually, of course, very proud of. On the top left, you see the vessel sailing away from Jurong shipyard, where the conversion was done. Top right, the vessel moored offshore Jakarta. The letters on the side of the vessel are Indonesian, but it means West Java FSRU. The bottom 2 pictures are the LNG carrier Aquarius coming alongside for the site transfer of LNG onto the FSRU, and we transferred our first cargo just after May 4, 2012. Turning to Slide 20, our newbuild FSRUs, which we -- which we're very optimistic about. Again, they are larger in size than the conversion vessels. The conversion vessels are 125,000 cubic meters. These vessels are 160,000 to 170,000 cubic meters. They are large-capacity vessels with 750 million cubic feet a day, so that is a substantial LNG project that can be supported off the back of the FSRUs. Our newbuild FSRUs will be the most efficient in the market. Substantial savings through the use of gas engines versus steam-based production, which can translate into $30,000 a day in operating costs when operating at peak capacity. So that is a substantial savings, obviously, for the user of the FSRUs. Reinforced membrane tanks allow the vessels to operate in decent sea conditions. And one of the critical things about these FSRUs respect [ph], in all respect, if they're not being used FSRUs, they are able to be traded as carriers in the normal LNG trade. Turning to Slide 21 to wrap up. We still believe that the LNG industry fundamentals remain very strong. Our prompt tonnage availability in 2012 has continued to enable us to do some opportunistic chartering that's going to have immediate impact on Q2 EBITDA and forward. This will be much improved from Q1 levels. We believe our newbuilds delivery timings are very well placed to hit that structural gap late in 2013 and 2014. We do have a large fleet growth upcoming. We are going to double the size of our fleet by the time 2015 rolls around. So the organization is currently very focused on maintaining our quality operations as that fleet buildup goes along. Again, FSRU, an award in 2012 we're optimistic about. Of course, we are exposed to the project developers' needs to get over all their hurdles and get to their FID before we can get a commitment from them. But again, we see some credible developers with some good-looking projects, and we're -- we believe we've made some good offers into those projects, and so we're optimistic. Looking out, as I've said, we -- the next dropdown into [ph] the MLP will very likely be Nusantara Regas Satu. We're working on that right now with the expectation that, that will happen. That will quickly go on [ph] our excellent cash position and enable to take delivery of our full newbuild fleet, maintain a high dividend and fund expansion without any requirement to issue equity. And further strengthening our view on our balance sheet right now, the Board has approved a share buyback scheme of 10% of the float, and so further showing our confidence in our cash position, our balance sheet position currently. So that wraps it up for the presentation part of the call, and we'd like to turn it over for questions.

[Operator Instructions] And we will take our first question from Michael Webber of Wells Fargo.

A handful of questions for you. I wanted to start with the quarter. And Brian, you mentioned some of the incremental costs associated with the Hilli and the Gandria that you guys could not capitalize, and it obviously inflated that OpEx line item. Can you give a breakout of how much that was and what a normalized run rate will be going forward?

I think the normalized run rate should be along the lines of the sort of the Q4 -- slightly higher than Q4 number, so $17.6 million, $18 million. So I guess from that, you can deduce that sort of a $10 million as a result of the Hilli and Gandria reactivation costs, i.e., in this case, repair cost.

Okay. All right, that's helpful. And you mentioned that they're going to start getting marketed relatively soon. Can you give a little bit of commentary around, I guess, interest level? I'm assuming you probably already have people calling you or you probably have already. And maybe some color around rate expectations on those assets.

Yes, sure. I mean, I think interest for these carriers have obviously been around. We said that we would start heavily marketing them in June. They are now just completing their conversion. Obviously, we can't really say anything firm just yet, simply because we're not at that stage. But certainly, interest for these carriers are there and are quite numerous.

Okay, that's fair. I wanted to turn to the Satu, and then you've obviously been pretty transparent about that, the desire to drop that down. Can you give a little bit more color about where you are in that process and maybe a little color around potential timing?

Well, I think it's a 2-way process. We've obviously been talking with LNG partners, and that discussion is ongoing. I think both sets of entities see the benefit in this. But ultimately, we get to decide on the schedule that we would follow and the price that we would agree on. I think this is -- under pricing that is obviously governed by a fairness opinion, on the timing, given that the vessel is now just -- it's now on hire, on charter to Nusantara Regas, I think we expect the dropdown to come in the pretty near term.

All right. So it's fair to classify that as being an early Q3 event. [indiscernible].

Potentially.

Okay. And then you mentioned the pricing being set, obviously, by kind of a third-party arbiter. Can you talk a little bit about what Golar's expectations would be to the parent in terms of what you're taking back, stock versus equity versus the -- the breakdown there?

You mean how MLP would fund it?

Yes. How -- what would you be taking back from MLP, yes.

Well, I think, first and foremost, I think, as I said, it's something that is beneficial to both. I think in terms of pricing, that's an ongoing task. We have appointed a third-party arbiter to do that. And as far as the pricing is concerned, that is yet undecided. Obviously, from MLP's perspective, they have a variety of instruments that they can use to be able to satisfy whatever the price that is agreed. I mean, as you know, they filed the F-3 in May, and that gives them the option of potentially raising equity, public debt and so on and so forth. And of course, they've got third-party debt as well. And given the leverage level at the moment, they remain and they do have that flexibility to choose any of those options.

Okay. That's helpful. I wanted to change gears momentarily. And you guys, obviously, you talked a little bit at the end about the buyback program. Can you talk a little about timing? I mean, you put the price target -- the price ceiling out there. It's obviously above where you're trading now and actually above some of the Street price targets. Can you just talk about how you think about buying back that stock and how we should think about it from a modeling perspective?

Well, first and foremost, we haven't got -- we don't have a road map as far as timing is concerned. We haven't said, "Look, we're going to do this, that and the other in these months." I think ultimately, the Board has looked at the price of the -- our stock price and looked at the fundamentals of the business that we're in, where they're positive about it. And so we are very bullish about certainly the medium term in the business, and we -- and they just feel that there is an opportunity here to be able to reward those shareholders who are in it for the long term. We just -- I think as far as the valuation is concerned, we just feel that the opportunities are not priced in.

Okay. That's helpful. And one more for me and I'll turn it over. It's more just a modeling question. G&A was off during the quarter. Can we talk about our kind of a Q4, assuming a 2012 run rate?

2012 run -- I think we would probably -- I mean, with these things, there are always sort of one-off costs. But [indiscernible] one-off costs, and so on I think it would be -- the run rates would be somewhere around sort of 5-ish, yes, along those numbers. But as I said, it's dangerous to just say a number, simply because we do incur sort of one-off costs every so often.

And we will take our next question from Fotis Giannakoulis of Morgan Stanley.

Brian, I would like to follow up a little bit on Mike's question about operating expenses. Can you give us a number of what was the cost of the Hilli and Gandria that we can now back out from our earnings comparison?

I think you can back out $10 million. Basically, we budgeted a number for the reactivation of Gimi -- sorry, for Hilli and Gandria. They are both running to budget. But there are certain expenses -- I guess from a cash perspective, it doesn't matter, but there are certain expenses under accounting convention that you simply can't take to the balance sheet. And as we've gone through our technical analysis of these, our technical guys have gone through with our accountants, and having sat down and gone through it in detail, we have arrived in the conclusion that x, or in this case, $10 million of those expenses are all more of repair nature as opposed to a capital program.

Okay. And we should assume, I guess, that for the second quarter, these 2 vessels, they incur operating expenses for the entire quarter?

Well, they would incur some operating expenses. But as mentioned, they have -- their reactivation process isn't complete. Having said that, the majority of the repair-related cost hit Q1, so we wouldn't expect anywhere near the type of operating costs that we're seeing now in Q2. I think there will be a bit of expense -- of operating costs in Q2 as a result of the Khannur becoming operational. But ultimately, I think we're looking at sort of a level of around similar to Q4 number.

Okay. Can I ask you on the dropdown also, what has prevented you so far to drop down the vessel? Are there any issues, practical issues, that you have to resolve first? Any chartering agreements? Why this dropdown has not already happened?

Well, I mean, we've never really said to anyone that we're going to drop down Khannur -- or sorry, Nusantara Regas Satu on the next day. But I think simply, first and foremost, we had to complete their conversion. We completed that in March. We then had to go through a process of obviously, towing her to where she is now in Jakarta, and that wasn't just couple of days. It took a few weeks. And then just prepare for the sort of the notice of readiness to the charter. We've done that now. And as soon as that was done, the discussion on a potential dropdown to LNG Partners commenced.

Okay. And I would like to -- if you can clarify to everyone what was the situation regarding the registration statement of the GMLP shares? It created some confusion in the market when it was -- when the shelf was filed. Can you please give us some explanation on that, just to have everything clear?

Sure. I mean, the shelf filing that we did for LNG partners essentially opens the option to LNG partners to be able to bring out [ph] rates financing for its growth. I appreciate that people probably mistook LNG Partners as being LNG Limited and, obviously, within that was an option to raise equity and an option to raise public debt. And to some extent also, there was a notion that LNG Limited could potentially sell down some of the shareholding in LNG Partners. I mean, we included all of those simply because it allows LNG Partners the option to do it. It doesn't cost us any more than if we didn't include them. We don't have a road map that says we're going sell down x number of shares at x date in order to fund projects. It's just something that allows us further options for being able to finance our growth. As I said, as one example, I mean, we put in there the potential to raise public debt. But potentially, we might not be able -- we might not use that instrument to raise debt. It's just another option.

Okay, I understand. This is a pure housekeeping. Yes, Doug, a couple of questions for you. I'm looking your market outlook on Page 12. It looks very bullish for the next couple of years and -- but I see that on 2015, there is some excess capacity. Of course, this is for a short period of time, it doesn't include any benefits from debottleneck and spot trading activity. How do you view your chartering strategy? You have a number of vessels that they are open including the newbuildings. You recently chartered one vessel. If our information is correct, the rate is at around $150,000, but this is only for around 1 year. How do you view your short-term versus long-term chartering strategy?

Well, I mean, short term, we've executed a strategy where I think we've really maximized the value of our -- a lot of our vessels already. Short term, we have Hilli, Gandria and Maria, I guess are the key vessels, short term. I can tell you that the demand through the winter of '12 and '13 is what we're going to leverage with those vessels. The tightness of the upcoming winter market, I think, will be unprecedented, much more than we've seen even in the last 12 months. So we'll be leveraging that tightness into both higher rates but also getting some -- possibly getting some more term on the charters. Looking long term, yes, it'd be nice if every year looking out that the shipping sector was going to be tight, but that's probably unlikely to happen. What you can see, though, is that -- a couple things. Our vessels are coming out at a time, '13 and '14, when there will be good demand for those vessels, and you can turn that into a chartering strategy that can take you through what may be a slightly overbalanced situation in 2015, but certainly not extreme. I think something you have to remember on that stack you're looking at on Page 12 are the vast majority of those vessels are significantly less efficient than our newbuild fleet. So for example, you have a large chunk of first-generation vessels which are -- will be the first to come out of the market, and of course, we're not worried at all about finding homes for our newbuild fleet and our modern vessels. So long term, again, leverage that tightness in '13 and '14 and take advantage of the fact that we'll have our -- one of the most efficient fleets in the market, very attractive to charterers.

But just to insist a little bit more, I understand that you're thinking of only to fix your vessels that they are becoming available for a short period of time, because the rate for -- it seems that the rate for long-term contracts beyond the 7 years is quite lower than the short-term rates that we see for 1 to 3 years. And also what kind of impact will have for your potential dropdown strategy to GMLP?

Well again, you're right. There is a large gap between the short-term market right now and the longer-term contracts. Our feeling actually is that the longer-term charters, anyone looking at them now, there's a gap between charterer expectations and owner expectations right now. We feel like maybe that long-term market hasn't matured enough. We're in no panic and no rush to get our newbuilding fleet all chartered out as soon as possible. That's not the idea. We will make pragmatic chartering decisions that benefit the group, and that will, I assure you, will eventually benefit MLP in terms of its dropdown strategy. What we'd like to see is the incremental volumes that are coming on through 2012 and 2013, some of it's been a little bit delayed for a couple months, and we just think that as that volume starts hitting the market, more and people are seeing impact of that volume, that the longer-term charter rates will be properly valued at that time. So we're not rushing out and chasing it in an overaggressive way. We think the market's going to play out fine, and we'll capitalize on it at the right time.

I read also in your press release about other potential investments related to the LNG infrastructure. Can you clarify what these potential investors will be? There was a discussion about gas to electricity in the past. Could it be also some liquification (sic) [liquefaction], floating liquification (sic) [liquefaction] project? And what would be the economics that would make attractive certain [ph] potential investment?

Yes, I mean, we have conceptual designs for both floating power and floating liquefaction. Our floating liquefaction concept is not your prelude-style, offshore, full gas-fueled development type concept. It will be more of a pipeline quality-gas simple liquefaction type project. So both of those ideas are there. Both of them should have quite strong economics. But again, they're ideas that take a lot more focus on actual project development, permitting, regulatory processes that we aren't, to be honest, highly focused on now. We're pretty focused on the existing fleet and operating that fleet properly and efficiently. But as and when some extra projects or power projects start to become more real, we'll certainly return to investors with some news on that. We don't really have anything short-term or near-term pressing on those right now.

And we will take our next question from Martin Korsvold of Pareto Securities.

Can you give us some guidance from how many FSRU contracts you think we'll see on the overall level in 2012? And also, a bit more in general terms, obviously, the activity level on FSRU developing? I think previously, you said that you see something like 30 viable projects out there at the moment.

Martin, I'm pretty sure we've never said that there's 30 viable projects out there. A lot of people say that, but we don't really believe that. I think there is -- that's not bad number for the number of projects that maybe are at some place in the development funnel. We tend to look at projects in a lot more detail in terms of who the sponsor is, what are the underlying economics of the project, what kind of financial capability the sponsors have to develop, what kind of regulatory environment they're in, do they have access to supply these kind of things? I would say that in 2012, FSRU awards, at least 1, maximum 3. No more than that. But again, we are quite optimistic about those. I mean, the competitive pool is still very small. The projects that we are shortlisted on, there's 3 projects we're currently shortlisted on. One of those short lists has 3 companies on it, and the other 2 have only 2 companies on it. So we like that kind of competitive pool. And that's why we're quite optimistic of the list of awards that will happen in 2012 that we have a great chance to be -- to get at least one of those.

Okay. And can you also talk a little bit about the Indonesia contract, the third Indonesia contract that was temporarily pulled from the market? Do you think that's coming back? If you have any comments on that.

Yes, it's actually, we're still in discussions on that project. It does -- it has had some mixed press in terms of public statements being made about the project. Our contract, of course, is with Pertamina, and we are still getting increase in questions and follow-up on that project. I wouldn't want to say that there's no uncertainty there. There is. But it is certainly one of the list of projects that we would call viable.

Okay. Lastly, on conversions versus newbuilds, I mean, I guess this sort of second Indonesian contract, they initially were looking at the conversion, and then they went for a newbuild. Do you feel that the new FSRUs we'll see going forward are going to be newbuilds and that conversions are -- kind of the first stage of the FSRU play? Or are conversions still a viable option for some of the players?

I think conversions are a good idea for specific projects. Projects that may be smaller in size and unit economics more critical. I would say that newbuild FSRUs have a lot of advantages, it's true. Brand-new vessel, larger size, greater efficiency, et cetera, et cetera. And now with Golar having committed to these newbuild FSRUs, one of the advantages of conversion, which was quick delivery, was kind of taken away. So we have 2 newbuild FSRUs that can basically be delivered ahead, now, of any conversion project that could be done. I think the other impact you see is that almost all of the first-generation vessels that would be conversion candidates are now viable LNG carriers. So the economic gap between doing a conversion and a newbuild FSRU squeeze together. So there's no real benefit because the rates on first-generation vessels with carriers have gone up significantly. So the driver for the owner of those vessels to turn them into conversion projects has lessened. I think when you get out into that 2015 time frame, the conversion market will probably start to emerge again as those vessels start to get priced out of the market in terms of carriers. Golar being the only company that's ever done a conversion to an FSRU, we're still confident and optimistic that in that time frame, our vessels will be good conversion candidates. So we're kind of expecting to see a couple years of trade on Gimi, Hilli and Gandria. And then as the first-generation vessels start to get priced out of the market and when the newbuild fleet comes in, I think they are excellent candidates for FSRU projects, and we'll be pursuing those at that time.

And we will take our next question from Oyvind Berle from DNB Markets.

There's been some talk in the market about some unscheduled yard time for the Viking. Do you have any comments on that before it came on in new contracts?

We did conduct a short repair on Viking. That's what caused our 0.5% utilization number that you saw -- Brian supplied earlier. It wasn't an expected repair, but it was a routine repair and taken care of with no problem.

Could you give some light on what sort of the problem this was and how long the off-hire was on it?

Oh, I don't know. I think it was 2 days, something like that.

I think we can't really sort of make specific noise on the problem. But yes, the off-hire days was about 2 days, 1.8 days.

And we will take our next question from Erik Stavseth of Arctic Securities.

My question relates to, I mean, we're all sort of confident on demand coming on and a lot of new projects coming on, although it might be delayed. But my focus is turning to the yard capacity. Right now, there is roughly 30 vessels on order for 2014, and there's, say, 25-ish for 2015, but there's a lot of options. Do you have any feel for what the yards will be able to output, then, in sort of, say, 3 years' time, 4 years' time? Because if it's very high, if it skew the graph you have on Page 12, right, there could be an increase significantly on the ordered vessels.

Well, I mean, I think I characterized the yard position right now as it's not very active. There are a lot of options out there. But I would say that in terms of people considering or pursuing new LNG ship orders, it's very quiet right now. And that, I think, has a lot to do with maybe people looking out at this picture and saying, "Okay, it's starting to get kind of in balance," and we, normally are the guys that tip it out of balance. But also I mean, just the sort of ship sector in general being fairly depressed across the board and debt markets being quite challenging, I think that in order to get out and make $200 million commitments to vessels, you need to be very liquid and very strong to do so. And there's only a small set of people that are able to do that right now. I think that what you've seen is some of the shipowners that have gone out and committed to newbuilds have ended up possibly signing up charters that they wouldn't normally have because they needed a long-term charter in order to access financing to pay for the vessel. So I think it's quite challenging from a sector point of view in terms of owners that have the ability to go and make major commitments to LNG carriers on spec. So yes, there's some yard capacity there that, but we don't feel the competitive environment for new owners coming in to make new commitments is very challenging at the moment.

That's good. That's good to hear. Second and last question is actually on the order book. I mean, right now, you have approximately 1/3 of the unfixed tonnage, at least to my knowledge. Are you seeing any ability to leverage that? Or I guess you're not, since you're not having problem with the high rates. But do you see sort of that as the leveraging point coming down the road as you close in on those open positions?

Yes, we certainly feel good about it. And if you look at the 2013 percentage of the open positions, we have a -- I think it's quite a bit higher than that. It's in the 33% or the number you're quoting, which I think is quite accurate in terms of the overall order book. And yes, we do feel that -- I don't know if I'd call it leverage. I think that we, with our open positions, we are a player that can't be ignored in terms of supplying the market with shipping capacity that it needs. And we have the most efficient, latest technology in our vessels, which can save charterers money. So I just think we're bringing a very good proposition to the market, and we'll be creating value from that for shareholders.

And we will take our next question from Rajav Pury [ph] of Linden [ph].

Could you -- going back to an earlier question on long-term charters, could you please tell us what is the going rate right now for a 7-year charter?

We haven't done any 7-years charters, so I don't have any direct experience from our own charters. And we don't really like to disclose rates. Especially, I mean, you can read in the press, there's been some talk of sort of high-70s type rates for 7-year charters, which we feel is awfully low. But I mean, there just haven't been a lot of deals done lately, so I wouldn't want to speculate as to where that rate is going to end up.

So and what, I mean, still I'm guessing you're rolling back on just getting a higher rate. But what sort of improvement are you expecting and what is going to be acceptable? Is it -- I see that there's one that was done in your fleet which is at 100. Is that the right number? Or what's the right number for you there?

I mean, we don't really discuss rates on calls like this. I mean, we have to -- and it's to the benefit of our shareholders to maintain our competitive position in the market and what messages we've got out there. We don't like to send signals via these kind of calls out to potential charterers. So we just don't like to predict rates.

Let me move on, then. On financing, just on this unrated party financing between one entity and another. Is there a goal as to when that is going to go away on the revolver and also on the GMLP loan from GLNG? I mean, any...

I guess you're referring to the vendor financing that was affected as a result of the freeze [ph] dropdown?

Well, I thought there's a loan -- isn't there like a loan from GLNG to GMLP?

Yes, so that's the one. So I mean, the term of the vendor line is a 3-year fixed rate. We did -- we would look at refinancing, obviously, as long as it's efficient. But as far as the message goes and what we said in our press release, with the -- sorry, with the Nusantara Regas Satu dropdown, that actually allows us to further sort of satisfy the equity requirements as far as the newbuilds are concerned and maintain high dividend levels. So in that respect, LNG Partners, we can't force them to refinance. I think there is a deadline, a maturity date for that loan, and it's really up to them to find where the sort of the equilibrium for when the time is right.

Understood. Just generally, I mean, and I'm switching back to the earlier question, on the long-term charterers rate, with going even by your numbers like on Slide 12, like in 2014, seems like that's when you expect equilibrium, and then just 2015 is a short surplus. So if I'm just looking at 2013 and you have 1/3 of the fleet -- on contracted fleet out there, would -- I mean, why, as a charterer's perspective, why would I pay -- agree to pay much higher than -- why will I just pay forth one $450 [ph] than pay much higher rate off for the 7-year period? I mean, what -- I guess what I'm trying to get at is what are you expecting that people are not pricing in?

I'm sorry. I'm missing the -- I guess I didn't understand the question.

Well, the question, and this is on the long-term charters, I was saying that in2013, you'll have about 1/3 of your uncontracted fleet out there. So, and on your slide where you show in 2014, you expect some sort of equilibrium in the market, and 2015, there's going to be excess supply. So from a charterer's perspective, I guess what I'm trying to get is why -- how -- what are we missing and what is generally -- what are charterers missing in general? And why would they agree to pay a much -- like a higher rate on a long-term charter versus them just paying -- pay out for 2013 or for the short-term in 2012 and 2013? And then, instead of paying a much -- locking in 100,000 rate for the 7-year period?

I guess I'm still unsure of the point. But what -- our priorities are, obviously, to create the best value we can for the shareholders. It's no secret I think that in our chartering strategy, we intend to have a large portion of our fleet eventually on long-term charterers to leverage our group structure at best we can. So there's always that interplay between charterers and owners. If charterers are, which they currently are right now, wanting shorter-term agreements, because they're looking out at 2015 and saying, "Well, I might want to wait and see what happens then, so I don't want to charter through that period. " Where you have owners saying, "I'd like to charter through that period because I've got some leverage now." So we just think in 2013, '14, the structural tightness will still be there. We'll have a lot of the new production coming along. We'll be crystallizing. And that new production is for gas fields that have 20-year life. The projects, new projects, some of them requiring financing, will need long-term charterers. So we just think the market will be there at that time to charter out long term at rates that are attractive to us.

Then will take our next question from Herman Hildan of RS Platou.

I just have a quick question on newbuild deliveries, so you have obviously are a lot more efficient relative to even deliveries in 2005, 2006. How do you think about this in terms of, first of all, residual value for your older vessels? And obviously also, is it correct to say that the way that you're thinking about the long-term chart carts [ph] just so you'd like to pay down the asset to, call it the 10-year historical average during the first contract period?

I'd say on the first point, this is an efficiency gap between our newbuild fleet and our modern carriers in early 2000s. So we do expect that there will be a premium or a discount, rather, for chartering out those modern vessels later on. But still, very, very well above and profitable over our cash breakeven level for those kind of vessels. So we aren't concerned about those 4 modern vessels as they compete in a market where you have higher-efficiency newbuilds coming on. And then the first exploration [ph] vessel was, I'd say, I think once you get into that 2015, '16 time frame, unless you see a real upswing on the U.S. export side, for example, those first-generation vessels will start coming out of the market. I think you'll see some mothballing. But what we intend to do with those vessels is we will be looking for conversion projects for those vessels in that time period. And I, sorry, I missed the second half of your question.

The second half of the question was, obviously, if you look at the 10-year average rate, it's about $65,000 a day. And that's obviously not a very attractive rate, given the newbuild prices, et cetera. So I mean, would you say it's fair to assume that the shipowners in the current market should at least be allowed by the charterers to get a premium rate relative to the 10-year historical rates?

Yes, I think that -- you're talking about 10 years up to present?

Yes.

Yes, I mean, I think you've got 3 or 4 pretty ugly years built in to that 10-year prediction. And you had a situation during that 10 years which I wouldn't expect to happen again with the Qatari production being very, very late and all of Qatari vessels coming in on time, which -- a huge overhang, combined with the financial worldwide meltdown created a real perfect storm for LNG carriers. So I think that 10-year average is a little bit skewed. I think $65,000 a day is well below the indifference point for a charterer who might be making a charter-versus-build decision. So I -- we're not worried about rates being down at that level long term.

Okay, and also I was wondering, given what's happening on the ship design side, you see that yards are really developing fuel-efficient designs rather quickly, and that, again, if I'm not mistaken, it's about 50 tonnes or so on a laden basis through consumption saving on the tri-fuel versus steam engine from mid-2000. Is it -- do you still -- what's your expected lifetime, economical lifetime of the assets?

Well, I mean, the carrier life is 30 to 40 years in terms of design life. If you're asking about what we'd expect in terms of new technology, yes, there's always the potential for the next new thing to come along. But when you need to have a new technology to come along is you still need to have a big driver for a new wave of fleet expansion in a significant kind of way, kind of like the one we're going through right now for the tri-fuel diesel engine. And I don't think there's any concern that through this decade, when we have this big rope cycle for LNG production out to the middle of the decade, and then it could be even bigger on the back end of the decade, that these tri-fuel diesel ships will be the ship of choice for that wave of production.

Yes. I guess my point just for you, it goes down to obviously, you've kept about 1/3 of the fuel consumption over the last 5 to 7 years. Obviously, when you price in your internal rate of return on, call it longer-term contracts, if you, I guess, extrapolate any developments on the technology side, that surely is a residual value risk, right, that we have to take into account?

Yes.

And we will take our next question from Michael Webber of Wells Fargo.

I just wanted to -- I had a follow-up question. I know it's been a long call, but related to the Slide 20 and we were just talking about in terms of the cost savings associated with the tri-fuel diesel. At $30,000 a day, on a relative basis, you're using $13 LNG, can you give -- when you guys are out there marketing your assets, what sort of real premium are people pricing in there in terms of, I guess, that fuel savings? I mean, are they using a $13 -- is there $13 LNG and a $30,000-per-day fuel savings? Or is there something a touch lower? Just a little bit of, I guess, color on that.

Okay, just be careful with that $30,000 a day. That's on an FSRU which is discharging 4.5 million tonnes per year of LNG. So it's got a high fuel usage relative to a carrier. Yes, it's not so simple. The premium for these tri-fuel engines on a carrier versus a steam vessel, I think we really haven't -- there is not enough of them out in the market to see how it's really going to play out. The efficiencies come in, obviously, the lower boil-off and the engine efficiency, it actually has a bigger effect from a charterer point of view. Interestingly, if your utilization -- the charterers' utilization is expected to be lower. So if they're running the ships more frequent, the savings actually, interestingly, are less, because that boil-off rate, the low boil-off is more relevant to when you're idle than anything else. But I think that it's very fair as an average, I would say, actual day rate discount modern 2000s carrier steam trip [ph] into a tri-fuel is like $20,000 a day, $15,000 to $20,000 per day.

As there are no further questions in the queue, that will conclude today's questions-and-answer session. I would now like to hand the call back to Mr. Brian Tienzo. Please go ahead, sir.

Thank you, and thanks, everyone, for your contribution. And as always, we look forward to speaking to you again in our next quarter results. Thank you and goodbye.

That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.