Brian Tienzo - Chief Financial Officer Oscar Spieler - Former Chief Executive Officer of Golar Energy Management

Fotis Giannakoulis - Morgan Stanley, Research Division Jonathan B. Chappell - Evercore Partners Inc., Research Division Michael Webber - Wells Fargo Securities, LLC, Research Division Urs M. Dür - Clarkson Capital Markets, Research Division Omar M. Nokta - Global Hunter Securities, LLC, Research Division

Good day, and welcome to the Golar LNG Limited Q3 2013 Results Presentation. Today's conference is being recorded. And at this time, I'd like to turn the conference over to Mr. Brian Tienzo. Please go ahead, sir.

Thank you for that, and hello, everyone, and welcome to Golar LNG's third quarter results presentation 2013. As the administrator said, my name is Brian Tienzo. And as per usual, I'll be taking you through the third quarter results highlights, as well as the financial highlights in respect to the cash flow and balance sheet. And for this quarter, I'll also be taking you through both the FSRU and shipping business updates. We will not unfortunately be joined today by our CEO, Doug Arnell, because as of yesterday, he became a new dad. So I think he probably is at home praying that he was here. But in any event, we are joined by a senior board advisor, Oscar Spieler, as some of you probably feel familiar with that name, who has been integral to the development of Golar LNG's FLNG project. Without further ado, let's now turn to Page 4 to look at the Q3 highlights. Disappointingly, Golar reports a third quarter net loss of $13.1 million. Within this, it was a cash, noncash loss of $8.2 million on interest rate swaps. Furthermore, EBITDA generated in the quarter was also lower than Q2 and amounted to loss of $3.3 million. But more importantly, cash from operating activities improved from Q2 level to $23 million in Q3. Of course, the main reason for the negative numbers coming out of this third quarter net loss and EBITDA is as a result of the Viking and Gimi being idle for a lot of times during the third quarter. On to other activities during the third quarter. We concluded 1.125 billion aged vessel facility with the Korean ECA. That was done at the end of July, and what this allows us to do is to actually start new highly valued banking relationships, as well as start a good relationship with the Korean ECAs. Subsequent to that, we signed a 10-year time charter for the Golar Eskimo with the Hashemite Kingdom of Jordan. That was signed in August 2000 and -- in August this year, and that FSI is due to commence to the latter part of Q4 2014 or early 2015. Furthermore, we also signed a 5-year FSRU time charter for the Golar Igloo with KNPC, the Kuwait National Petroleum Company, again in July of this year, and that is due to commence during Q1 2014 with the vessel looking to be delivered to us in December, in next month. Given the very buoyant FSRU market, we opted to have Golar Tundra changed to have an FSRU capability also, but as a result of that, the delivery of Golar Tundra has now pushed back to November 2015. Spot charter rates as we mentioned earlier did hold firm during the quarter, but unfortunately, market remains volatile and inefficient. And this resulted to idle time and unfortunately, high bunks consumption for both Gimi and Viking and impacted negatively the results for the quarter. Nevertheless, the board is very buoyant in respect to the opportunities of the company with the vessel financing that we're about to put in place, as well as the opportunities that we see in the FLNG, they have decided to maintain the dividend at $0.45 for the quarter. Subsequent events to Q3. So the company has now taken delivery of both Golar Seal and Golar Celsius in October. Whilst there -- we see improving cargo availability, Viking has been able to secure voyage charter, but unfortunately Gimi, because of the vessel size and the age of the vessel, is now being prepared for layup. Golar Arctic commences its drydock in November, in the beginning of November, and it's just actually recently just completed that. And finally, we've now have received a new financing commitment in respect of 4 new buildings that are delivering in 2014. Turning over now to Page 6. We have highlighted certain numbers there on the de-consolidated and consolidated basis. So just going through the consolidated numbers. These are the numbers that -- these are what the numbers would have looked like had we continued to consolidate both Golar LNG Limited and LNG Partners. And as you can see, the EBITDA numbers there are very consistent. Obviously, there is a drop in revenue from Q2 2013 to Q3 2013 mainly as a result of the bunks consumption and idle time for the Gimi and the Viking. Compensating against that is a decrease in operating expenses for the quarter, particularly in respect of the underlying operating expenses on the vessels. On the de-consolidated numbers, there is a market drop from net operating revenues in Q2 to Q3 to $12 million level, albeit there is a just positive variance in respect of the operating expenses from Q2 level to Q3. The difference in revenue could not be bridged, and as a result, the EBITDA for the quarter has decreased monthly from $8.2 million in Q2 to negative $3.3 million in Q3. We also saw quite a big movement in respect of mark-to-market valuation for the interest rate swaps that we had entered into. So we were looking at positive mark-to-market value of 40 -- close to $49 million in Q2. That's now reversed to close to $11 million negative in Q3. That'll mean quite a big impact to the time charter equivalent, the TCE from Q2 level of $86,900 a day to now $37,963 a day. Again the big -- the biggest factor here is the number of idle days for both Gimi and Viking, as well as the bunks consumed while those 2 vessels were idling. And as a measure of that, the bunks consumed for Gimi -- sorry for Viking is close to $30,000 a day. Utilization again as a result of the idling has come down quite markedly from 80% to 40% but despite that, the board has felt confident to maintain the current dividend at $0.45 per share. Turning over to Slide 7. We just marked the main movements there, one obviously the change in operating assets and liabilities where the main movements as a result of the mark-to-market movements in interest rate swaps and the dividends from Golar Partners. It might seem -- on a cash basis, it might seem the dividends received by Golar LNG Limited from Golar LNG Partners have decreased but, in fact, the April to June numbers are slightly misrepresented in that there was a catch-up payment in April to June in respect of previous quarter's dividends. But in any event, had that been removed from this equation then you would -- we would be looking at an increase in dividends from Golar Partners. We also see there again quite an active quarter in respect of additions to newbuilds and equipment with $88 million added to the newbuilding program. Going over to Page 8. Again this is a graph that we showed to you last quarter, and it just highlights really that the ever-increasing and more important dividend contribution by Golar LNG Partners. Golar LNG dividends has been maintained at $0.45 per quarter. But in contrast to that, Golar LNG Partners distribution have been increasing. And of course, as a result of that, the shares in dividends received by Golar LNG Limited have also -- have been also been going up. Turning over to Page 9. Again some highlights there. Cash and cash equivalents have come down quite massively from Q2 level to Q3 as a result of heavy, huge amounts of pre-delivery payments in respect to the newbuilding program. We've also got a new item in there in restricted cash and short-term investments, which is $23 million and represents the LC deposit that we had to put in place to secure the Kuwaiti charter. And then going down the page, the newbuilding program has increased from $734 million to now $822 million in Q3. Going over to Page 10. One market change there in respect to the other current liabilities from $35 million to $69 million in respect of certain amounts of creditors that were yet to be settled at the quarter end. And again it has an impact in respect of mark-to-market movements during the quarter. Turning over to Page 11 and to go through the financing of the newbuild program for the company. So as a result of the Tundra, which is now an FSRU, Golar CapEx now stands at $2.74 billion. To date, we have paid $862 million out of dropdown monies operating cash flows. And, of course, we now -- we have now put into place 2 facilities to meet the remaining installments. 8 vessels will be funded by the 1.125 billion ECA facility, which we signed in July. And more recently, we have received a credit approved commitment from ICBCL on the sale and leaseback basis to fund 4 of the vessels that are delivering next year, which translates to approximately $750 million. Of course, we're very happy to have ICBCL starting a relationship with Golar and hopefully obviously, amongst the Fadason group as well. And to that extent, we were able to agree with them a 10-year fixed bareboat in respect of this sale and leaseback transaction. But I think more importantly, they have been very aggressive in terms of their financing and the structure that they believe in to the extent that we -- they're looking to fund 90% of the vessel value. Of course, if any other holds in respect to the newbuild financing will be essentially plugged by 2 potential dropdowns to Golar LNG Partners of Golar Igloo and Golar Eskimo. And I think it's fair to say that we should expect at least anywhere between $150 million to $200 million of free cash coming out of those transactions. And although it's not quite evident yet operating cash flows are, of course, still a source of income for the company. The shipping market that we are seeing doesn't quite allow us to rely on that for the time being, but the long-term outlook certainly looks positive. On top of that, we continue to receive MLP dividends, and of course, those dividends -- level of dividends from Golar LNG Partners and has been increasing. And I think just to highlight again the importance of holding the IDRs in respect of Golar LNG Partners, we are nearing now the highest splits as far as the IDRs are concerned, and I think as we get closer to it, we will see that the value of those IDRs more and more. So even in downside chartering market case, I think Golar is pretty confident, and certainly its cash and financing position continue to be robust. Going over to Page 12 to have a look at the short-term outlook for shipping. I think it's fair to say that there are currently a very bright line between the short-term outlook and the medium- to long-term outlook where the short-term outlook although day rates are currently holding despite the arrival of new tonnage, there remains very little opportunities for lifting cargoes. And as a result, it's very difficult to take benefits of the day rates that we continue to see holding firm. The other factor as well to take into account for vessels that are coming into trade especially those newbuilds is typically there is an expenditure to be incurred in positioning vessels. And more often than not charters are keen to avoid using vessels that have not had a maiden voyage. And as a result, owners are likely to incur -- I think more costs during the initial period of delivery from the yard. There is a table there that basically shows us the cumulative over and under supply of vessels versus the liquefaction facilities that we're seeing over the next 2 to 3 years. I think 2013 everyone agrees is going to be tight, and in fact, we're seeing -- we saw it in 2013 and the likelihood is the pressure on shipping is slightly to continue well into 2014 and maybe even 2015. However, we believe that coming towards the end of 2015 onwards, the amount of demand for LNG carriers increases rapidly. And as a result of that, the supply of energy carriers need to catch up. And currently, we're not seeing sufficient movements in orders for energy carriers to be able to plug that hole. And to that extent, we are confident that coming to the end of 2015 going into 2016, there could be a reversal of what we're seeing today and maybe even reflect a similar event to what we saw when the production ramps up and shortage in tonnage capacity became very evident. Going over to Page 13. This is the highlight of the long-term outlook. So anticipated liquefaction capacity indicates a requirement at the moment of 225 new vessels by 2020. The current order book stands at 107 vessels, of which against that, there is a retirement of 30 vessels over the next few years, which could mean that there is a tonnage gap of approximately 150 vessels. As the graph there shows, the left-hand side graph, there is certain constraints as far as the yard capacity is concerned. Currently, the most that we have seen delivered in any 1 year is 50. That was in 2008. Samsung and DSME remained the most active yards as far as LNG newbuild is concerned. But given those factors, there remains a shortage in yard capacity to be able to meet the demand we see coming through from the end of 2015 onwards. So I think to summarize on that point, although the near-term markets shows weakness as far as shipping tonnage and rates are concerned, particularly for 2014 and into 2015, there remains a big dislocation for the shipping demand and shipping supply that we see coming through from 2016 and '17. And as the 1 constraint against that, which we have -- we are seeing and we continue to see is that whilst there are huge advantages in ordering those vessels ahead of the time, financial constraints become much more evident recently. And we see certain sort of players out there looking in very expensive financings in order to try and mitigate their potential -- not the potential of not being able to take deliveries of vessels. Going on to Page 14. This is the highlight of our existing portfolio. Again, the table is cut into 2. The top table is highlighting the vessels at Golar LNG Partners level, of which majority are obviously in long-term charters and against very competent and first-class charters. And at the bottom is the Golar LNG Limited fleets. And as you can see there's very little dark blue lines there signifying not many long-term charters to rely on. The Gimi, the Hilli and the Gandria, although Gimi have been on charter during the summer, the likelihood is that she will likely be not be able to compete with the newbuilds that are coming through, and so the company is looking to arrange layup position for the vessel. Golar Viking and Golar Arctic, our modern carriers and will continue to be competitive. And, of course, Golar Seal and Golar Celsius, which have recently been delivered, will be top of the class when it comes to taking which vessels will be favored by charters, particularly it seems even when they're idling, the cost of idling these vessels is much, is much, much lower. I think we're talking about the third compared to the idling cost of Golar Viking and Golar Arctic. Over to page, again highlighting the company’s current newbuild delivery schedule. Of course, the next delivery for the fleet is going to be the Igloo, which is an FSRU and assigned to KNPC for a 5-year charter. That charter will look to commence during Q1 of 2000 and -- Q1 of next year. And after that, we've got some -- a few deliveries of vessels and the last of deliveries will be of Eskimo, which is with Jordan and the Tundra, which has recently been converted to an FSRU. Just a quick highlight of the Kuwait and Jordanian charters. I mean, majority of these you already know. So the FSRU with Jordan is a 10-year contract. First 5 years is an EBITDA of $46 million and then that drops very slightly to $43 million for the optional second fifth year. There is a -- the aim of the moment for the project is for project start up towards the latter part of Q4 2014 or the beginning of 2015. And of course, as a result of this charter, the length of this vessel it is -- it remains a very good candidate for MLP drop down. On the right-hand side is the vessel for KNPC for a 5-year contract. The Igloo charter will earn approximately $200 million in time-charter value over 5 years. There is a 9-month regasifaction service per year built into the contract. What it does? It gives us the ability to enhance the earnings capability of the vessel during the quiet period, particularly since the vessel is placed in a very advantageous position in the Middle East. The project, the Kuwaiti project is looking to start up during March 2014. And again because of the nature of its contract, it is also an excellent candidate for MLP drop down. I will now ask Oscar to step in to take you through the floating liquefaction project that Golar has been undergoing over the past couple of years. Oscar, of course, has been an integral part of the team in developing this project, and so he's a much better candidate than me to take you through the details of the project. Oscar?

Yes, thank you, Brian. Just going a bit back in time. During my time as a CEO, we were working on quite a few liquefaction projects. One of the first thing I did as a CEO was to shut down the activity due to the high cost breakeven on the LNG, the complexity and the risk of the projects, which we were working at that time. With the shale gas revolution and the gas prices in U.S., we saw a new opportunity for Golar to create a low-cost effective FLNG solution. And if you look at how we started the FSRU business, there's quite a lot of similarities in the way we started that business. As most of you are aware of, we started a FEED study on FLNG last year and have now completed the FEED, which has resulted in a very, very cost-effective solution at relatively short delivery time. The concept what we have said generally is that we don't want to go for the complex project and the complex gas. So our concept have some limitation when it comes to gas quality. We have targeted the pipeline gas quality, and we are also not gone into the difficult environmental areas when it comes to heavy waves and wind. So we are going for the benign waters. The fact that the unit is floating we believe create quite a lot of flexibility where we can employ it. And the fact that it's floating, it creates much less environmental footprint than our onshore plant. And so hopefully, this will be a much easier permitting process, and that's what we see also on the project we are working on. It seems to be much simpler than a land-based project. We have carried out the FEED, and so far, we have not really identified any showstoppers. The FEED has been done on a 2.5 million to 2.8 million tonne per year unit. There are 4 cranes. We have made the concepts so that we can easily scale it down from 2.5 to -- from a 4-train solution to a 2-train solution without too much cost. We have had DNV, which is a type of a classification society, which have approved the sign in principle. That means they have reviewed our FEED study, and they don't see a initial stop rider. In the end of the FEED, we have got a fixed cost from Keppel of 100% fixed, which is a quite modified fixed EPC contract where we have limited risk for cost overruns there are some, but we have tried to limit it quite a lot. For -- when it comes to the FEED, we are now finalizing the contract negotiations with Keppel, and hopefully we will be ending that within the next few months. We are also looking into to order long lead items in order to shorten the schedule, but that remains to be seen on the decision to be taken in January I believe. If we go over to next page, we are working on a number of projects. We have not really marketed the concept in the market so far, but we are working on project in the Americas, both in North America and South America. We are working in West Africa, and some of the projects are very early stage and some are more developed. When it comes to the most developed, is most probably West Africa where we believe that we will be able to if everything goes according to schedule, we should be able to take Final Investment Decision by middle of next year. That will most probably be a 2-train solution so that will be a 1.1 million ton. And a lot of the products, which we are looking into in West Africa is actually flaring, that we actually stopped flaring in West Africa. With the concept, we believe that we can develop feekins, which nobody else could develop. Commercially, that can vary from 0.40 TCF to 2.5 TCF. We are also very flexible when it comes to tolling periods. Due to the fact that we are floating, we can move the unit from one field to the other. And also with the cost or the CapEx we have, we believe we are also are able to offer this type of varying tolling periods. So in one way, this is ideal for stranded gas fields or like -- yes, stranded gas fields. While we are looking at the projects we are looking at, some of them are pure tolling deal. That means if you just take a time charter for the vessel, and other deals are included in that we actually take the -- sell the LNG and transport LNG to the markets. And when we look at the project we'll do in the FSRU business, every project we have are engaged. And the first thing the developer ask about are whether we can actually supply FLNG or LNG. And with this product if we manage to get hold of the molecules, we believe that this can create a lot of opportunities for shipping and for the FSRU business. When it comes to Douglas Channel, which we have been working for the last year and we have told you about before, we are negotiating with the parties in order to find resolution, and we are hopeful that we will find resolution. And due to the ongoing discussions between the partners, I think we will not really give any more comments on Douglas Channel on this call. The board are enthusiastic. I think what we have seen is that the conservers -- we have found a competitive CapEx, and we are just looking to find the right opportunity. Brian, can you take over?

Yes, absolutely. Thank you, Oscar. So just to summarize the call then, we continue to see a solid uptime for the vessels that are on charter. Today for the past couple of quarters, we've had -- we haven't had any downtime, technical downtime in any of our vessels. And of course, with the new commitment in respect to the 4 vessels, we're now seeing a clear line and sufficient capacity in order to be confident that we will be able to carry the company through a fairly volatile market, shipping market over the next few quarters. There remains 2 distinct charter and timelines in the near-term supply-demand rebalancing that we are lucky to see over the next couple of years, and of course, the much more positive long-term outlook where shipping demand and opportunities thereby remain very robust. As mentioned already, the board is not satisfied with the de-consolidated earnings of Golar LNG Limited, particularly as a result of -- again this is a result of the Viking and Gimi. We are likely to again see challenging numbers during Q4 as we see Golar Arctic going to drydock, and we continue -- to date, we continue to see certain amount of idling time for Viking, Gimi and even for the newbuildings. We are confident though that within time, these vessels, particularly the modern and the newbuildings will start contributing to earnings. There were -- Q3 was successful in respect of FSRU contracting with Kuwait and Jordan FSRUs being signed up. And as a result of those, we look forward to looking at dropping those down to LNG Partners. And Oscar just mentioned the Keppel FEED study for our FLNG concept is now complete. The EPC contract negotiation continues and is now looking to be finalized for the next couple of months. And I think it's fair to say that the project opportunities as a result of this FEED study has widened, and they're looking very positively. And I think lastly, the results of the FEED study was sufficiently robust and very positive such that the board is looking to consider at or looking -- funding the long lead items to make sure the timeline for the quick turnaround of FLNG solution is next. On that note, that ends the presentation for Golar LNG Limited. And so I'd like now to invite the administrator to queue in questions.

[Operator Instructions] We can now take our first question from Fotis Giannakoulis from Morgan Stanley. Fotis Giannakoulis - Morgan Stanley, Research Division: Yes. I want to ask about the FEED study. I was a little bit surprised to see that you left it until the end of your presentation. If you can give us an estimate of the cost of construction. I understand that now the size of this facility is expected around 2.5 million to 2.8 million tonnes. Is that correct?

Yes, the facility, as I've said, it consists of 4 trains. Each of them is approximately 0.6 million, 0.7 million tonnes. So we can either have 2.8 or we can have 2.1 or 1.4. So it's quite flexible when it comes to sizes and there are a lot of the fields, which we are attacking is smaller field, there's nowhere else can actually develop. So it's important to have a flexible solution. So we don't need to do a FEED study every time we meet a client. When it comes to CapEx, it's competitive. It's the lowest we have seen in the market. I don't want to comment the specific figures. So the fact that we are using an old unit, of course, save cost. I think we have found a concept, which are very effective. The top side, which we have -- which we are using, we have done quite a lot of optimization there. So actually the few consumption on the unit is also very, very competitive compared to similar plans. Fotis Giannakoulis - Morgan Stanley, Research Division: Oscar, can you a little bit clarify how this facility will be deployed? I understand that there is one opportunities to get a pure time charter, and the other alternative is that you get control of the molecule, and you will operate it yourself, and you will sell the fully delivered LNG. How would the economics look in each of these cases?

I mean, we are looking at all different types of structures. We are open to have partners in this product. We would actually like to have partners with local knowledge. Like in Canada, we would like to have partners, and the deal could be anything from a pure tolling deal, as you said, to a full giant LNG facility where we just buy the gas, and we sell the LNG and we take the whole risk. And if you take Canada, for example, or U.S., $3, $4 for the gas, $3 for -- or $1 for piping, then you have the 4 -- $3 for the liquefaction. And then $1.50 in shipping, you are up to $9 delivered in the Far East. So we might not be able to take the full effect of the $15 and $16, which is the price of LNG in Japan, but there is another $3 to be made most probably on top of that, or between $1 and $3 by trading the LNG. And when it comes to the return on the tolling, what we can say that it's similar or better than the first FSRU deals that we did. Fotis Giannakoulis - Morgan Stanley, Research Division: Okay, very clear, very helpful. There are a lot of people that they have discussed about the technical difficulties of the construction with project like that. I understand that you have some answers from the FEED study, which are quite encouraging. Given the expectation of the size and the CapEx that you're going to have, how will the execution risk going to be distributed? Is it going to be Keppel's responsibility to provide facility that can meet the requirements of the new building agreement? Or there are going to be more parties that they will take the execution risk? And also in relation to that, how do you expect that the project like that will be financed?

I'm happy that Brian is here, because he's going to take care of that. But I can [indiscernible] around it. But when it comes to the construction and the conversion itself, Keppel, VVR have a type of modified EPC contract with Keppel where they take on some risk the top part -- top side provide to take on some risk, and then we take on some risk. So it's kind of split between the 3 parties. The way I feel it, the way we have constructed it is that we have a limited risk of cost overruns. We will have more risk on actually that the unit works. That will be on us actually. But the top side provider, we have used or the principle we have followed here is that we don't have -- we are not attested. Everything which is on board has been used in marine industry before, except a few items. But we don't -- we and the providers don't believe that, that is any problem at all. All the liquefaction equipment are in -- there are 18 or 20, 25 plants in operation today. So it’s proven technology, and we get the type of guarantee from the top side provider, but that doesn't really eliminate our risk. It just hurt them if they don't deliver. So that's how it's built up.

And on the financing process, I think, as I'm sure you probably got it from the release itself. The one thing that we want to do is not lose too much time in respect of the actual building itself. So the likelihood is that long lead items, if indeed, they are considered for ordering, long lead items would be financed by Golar itself. Whether it be through, as mentioned in the press release, through a certain amount of a balance sheet restructuring, certain amount of capital raising in respect of this new FLNG business unit. But, of course, the big chunk of it is going to be met by our project's finance. And that is, of course, possible because at the time of ordering long lead items. You may not necessarily had counter-party at the end of it. But the fact that you're ordering long lead items allows you to then firm up certain contracts, offtake contracts and so on -- FLNG contracts and so on. Such that you be able to project finance the unit before it is fully built. Fotis Giannakoulis - Morgan Stanley, Research Division: You think that there is going to be ability to get any debt financing on that? Or this has to be a project financing of a pure equity?

Certainly not pure equity. I think it's a bit inefficient do it on pure equity. I think debt financing certainly, to some extent, is still cheaper than the debt equity cost of -- sorry, the equity cost of Golar today. And that's something that we will aim for. Of course, the one thing that we need to be able to do here is to balance properly how we finance it because, as you know, these are all MLP drop-downable assets. And what we don't want to have is such a steep amortization, where we put dent on these assets. That it hurts the cash flow, albeit the cash flow in these projects will be massively strong. We still got to be aware that there is a sort of stream of cash flow that needs to be released to MLP unitholders, and so we don't necessarily want to debt finance it up to the hilt. Fotis Giannakoulis - Morgan Stanley, Research Division: Bryan, that's very encouraging. I want to ask also about, if the project economics they sound quite compelling. And given the fact that you already have the FEED study, do you think that this can be a solution that can now also be applied for the Douglas Channel Project potentially if the other partners accept it? And also I know that there is a second FEED study that is underway by the partners there. What is the timing of this FEED study?

As I said, we don't really want to comment on Douglas Channel as such. But that said, I think the concept, which we have, the FEED study which we have undertaken, the concept is very, very flexible. And as long as it's not too harsh environment, as long as the gas quality and the gas condition are correct, we can more or less put this anywhere. So I think that, that's answer your question. Fotis Giannakoulis - Morgan Stanley, Research Division: No, that definitely answered my question. And one last question about the newbuilding deliveries, and given the idle time that some of these vessels might have to go through until they get -- they find contracts, what shall we expect as earnings for these new vessels as they hit the water?

I think, we've said before that we would expect to see a lot of volatility in our earnings. Of course, it's very difficult to pin down exactly the earnings expectations. What is encouraging, to some extent, is today that the rates that we are seeing remains pretty robust. Of course, you're only going to be able to earn that if you're carrying cargo. I think the next few quarters, the priority for the group is to make sure that those vessels are working, because otherwise we get hit by the idle time and the bunkers consumption of idling vessels. And so to -- it's quite difficult to give too much guidance, because we are seeing a bit more newbuild deliveries next year. And for each delivery there is of course, a maiden voyage issue. As charterers look to protect themselves from using vessels that haven't had a voyage as yet. Having said that, I think this is where Golar's operating record comes and way above water, where to date we haven't seen any, in the past a couple of quarters, we haven't seen any downtime technically. So it's a very long-winded way of answering your question, Fotis, but again just to emphasize that although we are seeing volatile numbers coming through over the next couple of quarters. The company is robust enough to withstand that to then come out of the other end, when things are looking much more positively.

We can now take our next question from Jon Chappell from Evercore. Jonathan B. Chappell - Evercore Partners Inc., Research Division: I have a bunch of questions, but I promise to keep them pretty quick. First of all, we can just summarize Keppel in 2 kind of short answers here. When do you think you have some transparency around starting the construction process with FID? And then also, how much before that would you pursue a contract, an employment contract for that potential asset?

As I said, we are -- we have some good or we have a project, which we are working on there. We believe there are potential that we can take FID in Q2 2014. And then we will need to do and we are, we have actually started to do some small studies on that project already. If that goes ahead, we will have try to do it as fast as possible to start up the construction. And I think, then we are talking about first gas in 2016, sometimes. We need -- sometimes there are some specific requirements because today, the vessel is designed for mooring alongside or [indiscernible]. In some project, we will have to do tarot[ph] mooring and so forth. So we will have to do some further studies. In this specific project, I think it's quite easy. So I think just after we have taken the FID, I think we can start construction a few months later. But as we said, we are considering to order long lead items already in the first quarter next year. And if we do that, that's the shorten construction period by 2, 3 or 4 months. And yes. Jonathan B. Chappell - Evercore Partners Inc., Research Division: All right. That's helpful, Oscar. And then Brian, just some rapid-fire modeling questions for you. Shorter term, the Arctic drydock, what's the [indiscernible] times associated with that in the cost?

Drydocking time as with these vessels are around 20 to 25 days. Costs, again these vessels range from $4.5 million to $5.5 million. Jonathan B. Chappell - Evercore Partners Inc., Research Division: And that's amortized or expensed?

That's to be amortized but of course, cash-wise you get hit in that quarter. Jonathan B. Chappell - Evercore Partners Inc., Research Division: Right. The Tundra, the CapEx increase associated with the move to the FSRU? How much is that?

It's not -- it isn't as material as the changes as a result of the Eskimo changing. So, I mean, you will have seen us quoting $2.74 billion for the entire fleet. I think prior to that, we were just looking at just slightly above $2.7 billion -- so $2.7 billion something. So it's not hundreds. So I'm just trying to recall it, anywhere between 5% to 10% of the costs. Jonathan B. Chappell - Evercore Partners Inc., Research Division: Okay. The Viking has been rumored to be on contract, and then also the Celsius and the Seal also. You mentioned some idling time associated with all of those. What type of employment day should we expect for the 3 of those ships in 4Q? And are the rates kind of well below market at least for the newbuilds given the cooling down process?

On the Viking, yes, she is currently employed. Of course, the quarter isn't complete yet. So we're not sure at what point she will come off charter. There is a possibility she may actually continue throughout. The Celsius and the Seal, I think it's fair to say that obviously, they command a better rate than the Viking, albeit the Viking rate isn't actually that far away from the numbers that we see coming out and being published. So, which is again, which is a sort of, to some extent encouraging to the extent that rates have remained robust. But where people starting to suffer is that, the cargoes are just currently not there at the moment, but we are seeing much more activity over the past couple of weeks, much more activity on shipping. So as far as Seal and Celsius is concerned, they have remained idle since the time of delivery, but there are now current good opportunities for them to go into chartering. Jonathan B. Chappell - Evercore Partners Inc., Research Division: Okay. And then finally, just you laid down on the front page of the press release a little bit more clarity on the whole math associated with the de-consolidation. The amortization of the fair value of gain, we spoke offline after the last quarter, I think it was about $15 million annually. It seems just looking through the numbers that, that might have been a little bit low. Is there a new number that we should be amortizing in that line item?

I think we can go through that in detail offline, Jon.

And I'll take our next question from Michael Webber from Wells Fargo Securities. Michael Webber - Wells Fargo Securities, LLC, Research Division: I don't want to beat a dead horse, but have a couple of questions around FLNG, and then one on the move of the sale-leaseback and the GP. You kind of ran through the time frame for FID and the projects, and then when you might want to go SPEC. Can you maybe lay out the lead time, the time frame for those long lead items? And at what point would you start actually seeing significant cash outflows, and maybe lay those out on a dollar preferably or on a percentage basis. And how far into this would you get prior to commercial agreement, if you are likely to sign something, say in West Africa?

If we start on ordering long lead items, let's say we do that in general, I think we have to pay something like 10% to 15% of the cost. The long lead items will be in the region of $200 million. So we're talking about $30 million in Q1, and then things will -- there's a payment schedule, which is quite more like month by month. And the schedule for delivery of those items is, the longest is 70 weeks. And so that's how that works. Michael Webber - Wells Fargo Securities, LLC, Research Division: At that point, would you still have the ability to flex that up to 2 to 3 to 4 trains or would you be locked into a certain size of that point?

No. As long as we only order the long lead items, we can have 1, 2, 3 or 4 trains. We can actually have 2 units with 2 trains. So that's the beauty about it as we have flexibility. Michael Webber - Wells Fargo Securities, LLC, Research Division: Okay. That's helpful. And you kind of touched on, my next questions in terms of the actual assets, I would assume this would be one at a time but may be it seems like you could do multiple assets on SPEC at a time. Can you maybe talk about how likely that is and whether there's one of the -- from one of the older assets that's better suited to go first. And how we should think about that?

We have taken, Hilli will be the first vessel which we convert. That's the basis for our FEED. Gimi is a sister vessel, so that should not be a problem, then we have Gandria. But I don't see a big problem of doing multiple conversion at the same time. Although on this side, it would be nice to see how things go before we start the next one. But most probably, we'll not have time, because I mean, if we do this, when the group do something, they do it big. So, I mean, if we do one, we don't do it for only one. We do it multiple. Michael Webber - Wells Fargo Securities, LLC, Research Division: Got you. That make sense. You mentioned the West African project being 2 trains. How large are the others in North America and South America that you're looking at?

North America could be from 2.5 million to 5 million tonnes. South America could be 5 million tonnes. Yes, there are and the West African they are tend to be a bit smaller. There is one project there at 2.5 million tonnes... Michael Webber - Wells Fargo Securities, LLC, Research Division: So the North and South American projects could require multiple assets each?

Yes. And the good thing about the whole thing, we haven't really market this. And as soon as we get the one project, and people see what we can actually do. I think there will be in multiple of customer coming to us. Michael Webber - Wells Fargo Securities, LLC, Research Division: Just around the sale-leaseback, which is kind of getting buried with a very busy quarter a lot of balls in the air. You mentioned 4 of the 5 remaining would be included in that sale lease back. The Tundra is in that group of 5, that's not financed yet but that's got to obviously, FSRU capability. Would that be excluded from the sale-leaseback?

That's correct. So that -- the Tundra is delivering in 2015 the financing -- the selling it and financing, basically gets rid of any financing exposure of 2014 deliveries. Michael Webber - Wells Fargo Securities, LLC, Research Division: Okay. That's helpful. Just one more for me, and just maybe the higher level. In fact, in the background of everything you mentioned the GP value story that's starting to emerge, and you guys are already into the middle splits and moving to the high splits. And if there is a 30-month lead time on FLNG, it seems pretty likely you'll be into the high splits and it kind of -- your peak level multiple potential range there, before you start actually seeing FLNG cash flow. In terms of how you prioritize driving value for shareholders, does monetizing that GP, which could make a considerable value, does that fall before FLNG cash flows? And is monetizing that a potential way to finance some of these assets?

That's certainly an option that we look at. But I think as mentioned in there, we've got 2 drop-down opportunities coming up, the Igloo and the Eskimo. I think it's fair to say we're not going to wait until 30 months to sell the FLNG, before we drop another one. So you're right. The likelihood is that we would already be in high split before any of these FLNG stuff comes through. Now one of the -- the mentions of it as far as financing the FLNG projects is concerned is multiple options, i.e., one is just monetizing the value in some of the vessels the we have through an FLNG, a separate FLNG business unit. I think Golar LNG has capability also to use its balance sheet as far as ownership of Golar LNG Partners because ultimately, the LNG Partners will benefit from the investment into FLNG. And as far as GP is concerned, it is an option, but I think the first 2 of what I mentioned, is probably the more near-term solution for the initial phase of FLNG expenditure.

We can now take our next question from Urs Dur from Clarkson Capital Markets. Urs M. Dür - Clarkson Capital Markets, Research Division: What's the timing on the Kuwait FSRU drop-down at this point? I remember last call you were saying fourth quarter possibly, and obviously we're coming to the close of that. What's the timing looking like? Is it still possible this year or is it much more like next year event?

Well, I mean, the commencement of the charter itself officially doesn't start until about March 2014. So we're not -- we haven't timetabled specifically, when the drop-down is, except to say that it is coming. Urs M. Dür - Clarkson Capital Markets, Research Division: Okay, now fair enough. I just remember on the last call, you had mentioned that it may drop-down ahead of the charter. So we're talking about '14 -- '13, but 4Q, but it's not a big deal just trying to figure out where I place it. I mean, I really think that everything else you touched upon the chartering strategy. I guess you're not necessarily in love with the terms that are being offered to your ships at this time on the newbuild side. Are you just intending to keep the Seal on the Celsius spot for a while? Or are you going to -- I wouldn't say give in but at least accept the 1-, 2- or 3-year deal for at least a couple of these newbuilds being delivered next year to stabilize the earnings base of the parent? What's your view there?

I think, it's fair to say that as we've mentioned before, we're looking at our sort of portfolio basis here. I mean -- I think typically we will see exposure to spots, but at the same time, we are not shying away from the 2- to 3-year deals. I mean, in fact, if the deal comes around and it is within the acceptable range of what we expect, then absolutely that we will -- we will be there. Urs M. Dür - Clarkson Capital Markets, Research Division: Okay, fair enough. And you probably won't be able to answer this, but what is the acceptable range? Is the acceptable range today's 3-year rate of sort of a broad quote for a modern TFT at about $80,000 a day?

That's probably touching about the right numbers that we'd be looking at.

[Operator Instructions] And we can now take our next question from Omar Nokta from Global Hunter Securities. Omar M. Nokta - Global Hunter Securities, LLC, Research Division: I just wanted to just touch on again, sorry to beating it down on the FLNG. Oscar, you gave us some good CapEx regarding the $200 million on the long-lead items, but you didn't want to give -- you don't want to like give us too much on the entire capital expenditure, which I understand. But I remember last earnings in the presentation you had provided a slide, saying that you're looking at a $3 to $4 per MMBtu cost to meet your CapEx and ongoing OpEx. Is that still the case, is that still a good number to go by?

Yes, I think that's a good number to go by. It depends on the capacity. I mean, 2.8 million tonnes we will be able to offer something around $3. If it's a 2-train solution, we will most probably be up 4, 4.5. But to be able to develop 0.5 million tonnes, TCF field at that level is very, very competitive, so that's the figures. And in one way, we are trying -- that's the market, that's the tolling market. So we will be competitive. Omar M. Nokta - Global Hunter Securities, LLC, Research Division: Okay. And then just regarding the concept of either outright owning the hydrocarbons yourself, by buying them and then selling it yourself and trading it, and taking on that extra speculation versus leasing the vessel out on a charter with the potential profit share. What's the -- if you're able to give -- how are your -- in your negotiations with the counter-parties, are they receptive to one versus the other? Are they interested in being able to offload the gas just directly to you? Or do they really want to own it themselves and basically just give you a charter for the ship?

It varies a lot, like the pipe gas, you just buy the gas and then you have to take care of the LNG yourself, like in U.S. and Canada. So -- but, I mean, we might be able also to stitch up off-takers prior to taking FID, and the interest around some of these projects are huge, and there are no problem to get rid of this. Of course, you might not be able to take the whole profit, but you will still not gain a very, very good profit. And so -- and there are certain clients who are not interested in LNG at all, because that's not their business. They only want to get rid of the gas. I mean, in West Africa if we help people with flaring, some of them are just happy. So and then there might be a combination that they want to have profit split of the profit we do on the LNG sales. So but for us, as a Golar, I mean, it creates a lot of opportunities not only on the LNG side, but also on the shipping side and the FSRU side, as I said earlier. Omar M. Nokta - Global Hunter Securities, LLC, Research Division: All right. That's helpful, and just regarding the timing of -- you're potential putting all of the FLNG equipment in a separate structure, is that something that you envision happening around FID in potentially Q2? Or is that maybe a down the line event closer to delivery?

I think we will -- I mean, generally the group as such, we are trying to have clean place here. Shipping is one thing, and liquefaction is another thing. So I think it be most probably we'll do it before delivery and sometimes between FID and delivery or something like that. So. Omar M. Nokta - Global Hunter Securities, LLC, Research Division: Okay. And then just finally, one sort of engineering question. Just trying to get a sense of what to expect at the Kuwaiti FSRU contract because you have the 9 months of FSRU operations, and then you get the 3 months of winter time to trade it. Considering there are some issues with the newbuildings, and having them I guess be cooled in order for charters to be receptive to wanting to use those ships, is -- when the FSRU that's deployed in Kuwait, when that one rolls off during the winter is there a cooling issue there as well? Or is it the tanks already fine?

The tanks are cooled, they have leak. Yes, So that's no problem.

[Operator Instructions] There are no further questions in the queue at this time.

Okay, good. If there are no more questions, then I suggest we end the webcast and finally, just to say thank you to all our listeners. We didn't post fantastic results this quarter, but I think you'll appreciate the amount of development that's been going on behind the scenes, when it comes to FSRUs and FLNGs. And we hope to be able to talk about them in much more detail, and I think much more concrete terms next quarter. Thank you, and speak next time. Bye.

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