Good day and welcome to the Second Quarter 2015 Golar LNG Limited Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Gary Smith, CEO of Golar LNG. Please go ahead, sir.

Thank you very much and welcome to this afternoon’s second quarter results call. The agenda for the call today is as per our usual format, so I’ll kick off with the highlights. I’ll turn to Brian, who will take us through the financials and then I’ll come back and talk a little bit more in detail about the business outlook and the update. So for the highlights of Q2 and top of the list and I think most importantly now we are a matter of weeks from hopefully signing all the final documents that underpin the FID for Perenco, Cameroon, GoFLNG project. I will come back and talk more about that. In association with that, we are also pleased to report that the construction and conversion work on the Hilli taking place in Keppel continues to be on track and within budget. As reported in the last quarter call, we have signed the term sheet with Ophir for the Equatorial Guinea GoFLNG project and it’s pleasing to report that that project is also continuing to make good progress. The LNG shipping market or LNG carrier market continues to be troubled with low utilization and low rights. We are taking action there and I’ll come back and talk a little bit more about that, but really it's the poor shipping market that underlies the financial performance for the quarter which is EBITDA of negative $25.3 million as compared to a loss of $4.3 million in the pervious quarter. Notwithstanding the Board maintains a dividend of $0.45 per share. It’s also been pleasing to report during the quarter we have in place now the financing for the GoFLNG vessel Hilli and Brian will talk more to that. And then we’ve also entered agreements to commence our third GoFLNG conversion, and are currently in discussion with both Keppel and Black & Veatch about a fourth conversion. During the quarter, we placed an order for an additional FSRU sister ship, the Golar Tundra with Samsung. And more recently, we just entered into an agreement to establish The Cool Pool with our new Gaslog and Dynagas, and I’ll talk a little bit more about that as well. So let me hand over to Brian now who will take us through the financial highlights.

Thank you, Gary, and good afternoon to everyone. As Gary already alluded to in the highlights of this quarter, the EBITDA for the quarter is substantially down from Q1. And if we break that down and look at Page 5, we can see that the total operating revenues decreased from $32.2 million in Q1 to $20.1 million in Q2 2015. And the main factors behind that is really you can point to four reasons, one, obviously the Arctic was still in charter in the first quarter. And of course, the charter rate at the time reflected a 2012 market rates which were abundantly much better than where we are today. We also had the Seal in charter for all Q1 and that charter ended during the early part of second quarter. At the same time both Glacier and Celsius were averaging 50% utilization in Q1 and unfortunately, they incurred a much lower utilization in the second quarter. Against the lower utilization and lower rates that we saw in the second quarter our operating voyage expenses in the second quarter is slightly lower with the Grand in fair value expenses that we saw in the first quarter not appearing in the second quarter. And the Eskimo Charter of course has ended in respect of the in chartering from the MLP. And so whilst we incur an expense of $6.5 million in the second quarter, we don’t expect to see that in the quarters to come. Nevertheless, because of the utilization being quite low during the second quarter, we saw an increase in other voyage expenses from $4.7 million in Q1 to $8.2 million in the second quarter. Against that we also saw an increase in administration expenses from $7 million in the first quarter to $9.2 million in the second quarter,…

Thank you, Brian. And I'll start on Page 10 of the presentation, which is the familiar Golar portfolio slide and there have been two amendments to the slide since the last quarter. Firstly, we have at the bottom of the page the newbuild FSRU, which is the order from Samsung and I'll come back and talk a little bit about that in a moment. And then also you will see about halfway down the page where Gandria is now the nominated vessel for the Ophir Equatorial Guinea project and she is scheduled to go into conversion around the middle of next year when the project takes FID. If I move into Page 11 and starting with the LNG carrier part of the business and I think as I said previously this is going to pretty tough market for anyone operating in the LNG carrier business. The utilization as Brian mentioned has been I think an all-time low with 35% and the rights in the mid-30s for petrol, diesel and electric ships and in the low-to-mid 20s for the same turbine vessels anything that attractive. And I guess to the extent there's any good news in this market the one thing that we can going to is that the spot market is growing and noticeably growing. We have already year-to-date seen within the industry and certainly within Golar as many cargoes traded year-to-date as there was for the whole of last year. And I think this has been really due to the impact made by some of the trading companies who are being very effective in securing cargoes and trading them, which is assigned at this market is aggregating and fraying up continuously. The challenge for the ship owner in a market, but this is always to be in the right…

Thank you. [Operator Instruction] We will take our first question from Michael Webber from Wells Fargo. Please go ahead. Your line is open.

Hey, good morning guys, how are you?

Hey, Michael.

Hi, Mike.

Hey, I wanted to start off just by kind of asking what is directly in front of us around Perenco and Cameroon. Gary, you mentioned we were probably weeks away from FID and it seems like you were at the one yard line. You also mentioned the offtake process seemed like it was - the marketing process was winding down and were completed. I know that's not your call to make necessarily. Just curious what color can you give us around – I guess other color can you give us around offtake for that project because it would be so meaningful, and then around the time line and I guess the three weeks FID, is it fair to assume that that encapsulates everything at that point, every contract or meaningful contract would be signed including offtake?

Thanks, Michael, let me just repeat what you said in the question, which is there are elements of this project, which we are not party to in all aspects…

Yes.

Yes, in all aspects of this project ultimately need to be sanctioned by the government. And anything I say on this call, I don't want to preempt or in any way undermine their decision-making process. Having said that, there are four documents which essentially underpin the process of FID. There is the PSC between Perenco and the government, there's the tolling agreement, which is between ourselves and Perenco, there is a gas convention, which deals with the fiscal and regulatory regime in Cameroon, which is a tripartite agreement between ourselves, Perenco and the government of Cameroon. And then there is the LNG sale and purchase agreement which will be between Perenco and their offtake. My understanding and my expectation is that all of those documents are in a position there were they are under review and should that review go as planned and we're on track as previously mentioned to sign all of those documents by the end of the quarter.

Okay.

But let me again say I don't have carriage of all of those documents. I am not party to all those documents. So we are a little bit dependent on other parties progressing as advertised. I don't want to preempt the decision-making of other parties.

That’s fair and I appreciate that. And just to kind of follow-up, you have all been around the space for a long time and if and when it comes to completion and again it seems like we are pretty close that this would be the first completed third party FLNG project and this is the first offtake from the third party FLNG project if and when it gets done. Can you maybe talk a little bit about that importance and how that could translate to other projects? Do you need to see one before the dam breaks or does it give credibility to the idea and to the concepts just within the context of having been around the space for a long time and this potentially being the first one, can you talk about how that will resonate throughout the space?

So yes, I mean the other FLNG projects that are out there are basically progressed by – IICs or NICs, so this does represent I think a milestone in the FLNG business space. I think it's incredibly important that the milestone that we are about to hit assuming we get there again, careful not to preempt the decisions of others, it does validate many aspects of the project. It validates the project from a technical perspective. Yes, I can’t think of a tougher regime in which to take FID in terms of validating the economics of what we're doing, the fact that we can't progress in FLNG project through FID in this current oil price, I think speaks volumes of the competitiveness of what we are trying to do here.

Right.

And then finally to the extent that there is a buyer to this project and that will be revealed I guess. It validates that there is a market for the LNG that we are producing and that there are credit worthy substantial buyers prepared to step up and contract LNG from the project. So should we get to that point within the next few weeks I think it's a big point of validation. I think people are starting within the industry at least starting to appreciate that and many resource holders are starting to realize that to the extent they want to monetize their gas in the ground then in this current low price oil regime and really we’re the only avenue willing to do that in the immediate future.

I think in addition to Gary’s comment there Michael, I think – again if we – you almost look back 10 years from today when we started the FSRU in a segment of the business and again Gary was here when that all sort of kicked off. I mean initially there was a lot of hesitation whether or not that kind of model was going to work. And certainly, we were aggressive and believe that was going to work given what we are seeing coming ahead of us. And I think today the proposition seems to be that okay, why are you building land-based terminals? Why aren't you just doing regas FSRUs? So we would hope that I mean we can only hope that what we are achieving here in the FLNG space is going to replicate what we have achieved in the FSRU space and of course, if that were to happen again it's a leading innovative part of Golar that has created that.

Fair enough. That's very helpful. Just a couple more and I'll turn it over, but Gary you mentioned a couple of times in your last comment around the lower commodity price environment and just given that we're in a different environment now than we were say six months ago I'm curious for the new projects you are talking to are you seeing any reluctance or I guess slippage in decision-making from your counter parties and if so or if not, can you characterize or how would you characterize the return profiles you are negotiating right now relative to say what we have seen from Perenco and Ophir?

I would argue Michael that in fact what we're seeing is exactly the reverse of that. So I think our proposition becomes more compelling the lower the oil price gets. Clearly that's not forever, but certainly in the realms where we are currently operating when really we represent the only feasible fast-track solution to monetizing stranded gas and I think people and I think it will be helped by the announcements in Cameroon when they are made, the validation of that project will make it clear I think to the industry as a whole but there are – there is an alternative to high CapEx, high-cost projects, which will certainly not be economic in this current market. So and given that there is no alternative out there that I am aware of that can offer better economics then we run pretty sound ground to protect our economics, but really it allows the upstream reserve holder to also pursue projects.

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

Yes, that's right. We are not seeing any pressure on that at the moment.

Great, nice…

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

Okay. I will leave that for somebody else. Just one more, and Gary you mentioned in the deck that you are starting to negotiate a fourth conversion. Obviously, it's generally kind of a bullish indicator and I'm just curious around whether that project, that geography is related to the third project you are negotiating? Is it just something scalable or would this be something completely new? We have seen Venezuela come out and talk about making a decision by the end of the year. Cameroon is - we’ve seen more reserves come out of that region, so I'm just curious as to how we should think about that forward and whether or not I guess what your ability would be like to, or your willingness to move forward with a fourth before a third is finalized?

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

Right.

But I think it's an either/or answer. So there are opportunities we're looking at which are scalable, but it's also realistic to contemplate that we might get two of the four others aligned in which case we may choose to do both. So what we are trying to do is preserve that optionality at the moment. Explore the possibility of doing a fourth project, which would then put us in a strong position should it be a project where more than one vessel is required or should we choose to pursue two independent projects.

Got you, okay. Great, thanks for the time guys. I will turn it over.

Thank you.

Certainly.

Thank you. We will now take our next question from Fotis Giannakoulis from Morgan Stanley. Please go ahead. Your line is open.

Yes, hello guys, and thank you. Gary as you mentioned earlier that, the only subject for the tolling agreement with Perenco is SNH. I just want to clarify, is this just a decision that has already been made, just the bureaucracy here or they are expecting to see progress with the sale process of LNG, and if you can comment about how this process is going? There was this comment from the Ophir, COO that they have already sold the volume. Can you comment on that?

Okay. Thank you, Fotis. So dealing with Cameroon, it's again important to point out that where we are one step removed from the government in many of these processes. The detailed discussions that have been taking place in Cameroon have been with the national oil company SNH, but of course, there are many other aspects of government which need to sign off on this project not least the Treasury. So my understanding of what takes place at the moment is that there is a border review within the total government of this project and that is expected to take place within a reasonable time. And as I mentioned in my earlier remarks, my understanding is that there will be in fact four documents that will be reviewed and agreed within the same timeframe and one of those four documents indeed deals with the sale of the LNG from the project. So notwithstanding the fact that we would pay to processes project without the formal sale of LNG, I think it's reasonable to expect although not certainly to I can't confirm it, what is certainly reasonable to expect that the LNG will be sold at the time all these documents are signed. In relation to the comments from Ophir, which of course is the Equatorial Guinea project. I think the comments of Nick, the CEO if he were to say that he is progressing now with the marketing process, but he certainly is not at the same point in that process that I understand Perenco to have reached.

Okay, that's clear. And how do you review the expansion of the Perenco projects developing? There is a, if I understand well, a process from Gaz de France to whether to complete the FEED studies for its land-based terminal. How is this process going and have you started any discussions about potentially expanding the scope of the Perenco contract to the remaining two trains?

So Fotis, our focus here is very clear. What we want to do is conclude the contracts that we have in front of us. And then should in the foremost of time need more gas be allocated to our projects, so for sure there is more gas in the ground. But at the moment our contract is based on the allocation of gas, should we be allocated more gas and we think we're in a very strong position to turn the gas into LNG. But at this moment in time, we are not looking to push out that discussion. In fact, this is very much in front of us to get the deal that we have in front of us signed and executed.

Thank you, Gary. You mentioned in your press release that you are looking – the project that you are looking we're trying to develop a standard gas associated the first flare gas in different parts of the world. Can you tell us what are the differences in the economics of different regions? Do you see pretty uniform cost of developing the gas across the different projects that you are exploring? And also if you can comment, what do you think is a major obstacle in order to have all this project successful? Is it a matter of financing over this project, is it a matter of being able to sell the gas and signing of big agreements? Or this is something that can happen without long-term sale and purchase agreements through the sale of gas to the spot market?

So just bringing through the structure of the projects, which we are progressing. I think what’s unique to our offering is the toll arrangement, which we offer is constant, no matter what geography we operate within and I'm excluding taxes from this discussion, but we go in with if you like something that looks like a floating shinier and we can do that in every geography in the world. So the things that then determine the economics of the project as a whole is that what price can you make gas available to the vessel. And in some locations such as in Equatorial Guinea that's about upstream development drilling and producing the gas. In other locations it to be about just taking pipeline gas and liquefying it. So the variables are at what price can you get gas to the inlet flange of the FLNG vessel. Our toll is constant. Then the third and fourth dimensions are what market are you looking to serve and what is the cost of freight to service that market? So it really is as simple as that. And so if you think about it, if we can produce or access gas and say West Africa let's say $1 or $1.50, liquefaction toll is comparable to the most attractive toll that you will find anywhere in the world, so that's let's say $3.50. So long as we are within reasonable proximity of a market such as Europe than typically we are $2 to $3 per mmbtu cheaper than anyone else.

Okay that's very helpful. Brian, I would like to ask you about the form of the contracts with Keppel. You've already spent $420 million for the first FLNG and you have that two more going. Are there any separate payment dates for the conversion contracts order? Is this something that you can adjust the payments and manage your liquidity at your preference and according to how the projects are developing?

Apology ladies and gentlemen, we have a line interruption in today's conference. You will be listening toward music and we will recommence the conference shortly.

Please go ahead.

Hello.

Yeah. We are very sorry, we were cut off, Fotis.

Yes.

I'm sorry about that Fotis. Would you mind just repeating the last half of your early question please?

Yes, I would just like to understand the nature of the contracts with Keppel since you have three vessels for quite large amount. Are the payments flexible? How are there are set milestone payments, installment payments that they have to be paid due to the progress? Do you have any flexibility to move around the payments on the progress of the conversion?

Okay. So if we tackled the three contracts we have today as you rightly alluded to we were spent $420 million on the Hilli already. So as far as that concerned once the tolling agreement and all those agreements that Gary has been talking about that we expect hopefully to have been ratified by the end of September then really the Hilli is fully funded we can drawn in the facility that is already in place. So as far as that concerned the Hilli would be funded at that time. The constructs of the conversion agreement in respect to the Gimi and Gandria is such that the maximum exposure that we have today until such time as we make fully the notes to proceed on those to is $65 million of which $50 million has already been paid in respect of the Gimi. There is an additional $15 million that we have to pay in respect to the Gandria between now and Q2 2016. Unless of course, we have firmed up agreements employment on those two then, we really don't need to spend anything else. So the exposure is very limited and in fact it's looking very unlikely that we're going to be able to get employment contracts on those. We would terminate ahead of that and at least $30 million of the $65 million spend at that time would come back for the Hilli conversion. And of course, there is a certain amount of alignment between ourselves and Keppel and BV sort of extend that, that relationship grow stronger and we would expect that in the event, we needed to extend the time we needed to be able to firm up some employment. I think there would be some flexibility there also.

Thank you, Brian. One last question for me that has to do about Golar Partners, it seems that it's been trading right now at a very high yield, and even below the liquidation value. Are there any thoughts here about how you can enhance the value of GMLP and potentially even changing the ideas, splits or I don't know, even rolling into the GLNG at some point if it continues to trade at such a steep valuation discount?

I think certainly, we are aware of the yield that the MLP is producing at the moment which is why the Board of Directors approved a potential purchase of up to $25 million worth of buyback of MLP units. And we have done some of that already. I think it's obviously important for Golar LNG Partners to do two things. One is to continue paying dividends at the very least in the current level that it is able to do at the moment and I think just even looking at the previous presentation by Golar LNG Partners it is more than capable of doing that. The coverage ratio of that company has been very healthy and very strong over the past couple of years. And of course, there is a question of growth of the MLP. I think it's fair to say that the MLP one is looking at the growth perspective is always pointing towards the fleet of Golar LNG Limited. And whilst there is no immediate candidate for dropdown at Golar LNG Limited, as Gary said the FSRU world is very positive and not least from 2017 onwards a big chunk of growth is going to be brought over by the FLNG projects of Golar LNG Limited. So we haven't looked at we've thought about it, we haven't looked at completely whether we needed to change the structure of Golar LNG Partners. We don't think there's an immediate need for that but certainly it something that we would continue to consider as that yield develops also.

Thank you, Brian. Thank you, Gary.

Thanks, Fotis.

Thanks, Fotis.

Thank you. We can now take our next question from Erik Stavseth from Arctic. Please go ahead. Your line is open.

Hi, guys.

Hi, Erik.

First one for me relating to the CapEx of Hilli. I mean you've spent $420 million, that's fair enough, but could you tell us how much you have spent to the contingency part of your conversion CapEx?

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

It’s vastly intact, Erik.

Yes, so Hilli pass it all…

Yes.

Okay. Second question relates to the financing of the Hilli. I mean you do have at least some decent cash flow attached to that even at this point, but how much do you think you can finance without the contract, i.e. financing just against the asset itself?

You mean with the Perenco contract?

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

Yes. I mean, one thing to remember of course is that the ultimately right now, the vessel is financed and we're very much reliant on the contract, because the contract for Perenco doesn't really kick in until 2017. That is to say the sort of the cash flow operations under that. So really the banks are relying on two things. One is the asset that is being built and two, at some extent Golar is credit standing. And during this period, the leverage takes us to around $700 million. It's more than 50% of the conversion of the project cost. I'm not necessarily saying that we will continue to achieve that. Of course, we will try and even push that further, but that sort of if you want a President and that's already been set the marker.

Yes, but my point is that it's quite unique to see that kind of high contracting with or high debts with such low coverage for the unit. I mean generally in LNG it's contract first and financing, whereas here it's more contract unit and then financing.

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

On The Cool Pool, how has the reception in the market been? Are your clients generally happy about the cool pool or are they concerned about having to pay more for their transportation?

So Erik let me just deal with the later part of your question first. There's no sense here that necessarily anyone will pay more for the vessel. That's clearly not what we're seeking to achieve. What we're trying to do here is more efficient and not having to position vessels for particular voyages. The market reaction I would say has been sort of neutral to very positive and maybe confused to the positive. So I think some people are still digesting how this will play out, but certainly if you look at the people who regularly charter in that business, so the traders for example, they have all been very positive to this development because it does open up to them alternative models and I mentioned previously the possibility of CLAs. We're able to deal much more promptly, much more efficiently to requirements and you've got now a fleet of tolling modern state-of-the-art LNG carriers. I would argue managed by the three best governors in the business so generally we will see. Of course, we haven't done our first picture yet so we will see how we go.

Thanks. And last question for me relates to the Golar power, I mean you mentioned the gen power project in Brazil and also 15% return. I realize it was early days and then a small investment from you guys, but could you just sort of walk us maybe through just some top-level math on how that project would work out in terms of the returns.

Yes, so let me give a little bit of context. So our partner gen power earlier this year one was essentially an uncontested auction to provide a 1.5 gigawatt power station and was able to secure that opportunity at record high power prices in Brazil. Our initial involvement in the project really was the FSRU provider, but as we work with the project more closely and started to identify a number of aspects of that project we realize that there is more to this project than what initially we thought. In particular, there is the opportunity to secure the capacity in the FSRU and that FSRU was connected to the Brazilian gas grid. So there is the option to provide LNG to the gas market in Brazil in addition to servicing the requirements of the power station. The power station because of the outcome of the auction is of itself an attractive investment. And then if you happen to look east from where that power station is being built you will see if you closer good enough maybe one or two of our FLNG vessels. So really what our thinking is the investment as a standalone is interesting. It employees in FSRU, but if we can use this maybe not this example, but this concept as a way of pulling through more FLNG projects then it becomes hugely beneficial and we are seeing as we have developed the FLNG projects we are currently discussing, if you can remove the complexity and the project on project risk specifically you encounter on these projects use speed the process of investment decisions quite materially.

Thanks and that's all for me. Thanks.

Thanks, Erik.

Thank you. We will take our next question from Ben Nolan from Stifel. Please go ahead. Your line is open.

Thanks and I will try to be quick here. So firstly on the Tundra, clearly as you said you are more aggressively marketing that to other locations. Any sense of the timing, stepping back and assuming that it does not go to Ghana. I mean any sense of how soon something else could be put together and maybe any sense of the geography?

So our discussions really are again a number of different geographies. It's difficult to predict exactly where the Tundra will go. Indeed there are other opportunities within Africa, but also in Asia, also in the Middle East, also in the South America, so we remain hopeful that we will secure employment for that vessel within the first half of next year. Really given the maturity of those discussions, it's difficult for me to be more definitive than that at this moment in time.

Okay. So probably not an announcement by the end of this year, is that a fair assumption?

I'd like to think there could be.

Yes.

But I don't want to create false expectation either. I think we are working hard. There are a number of discussions ongoing. There is certainly one of those opportunities that could well take a decision by year-end, but I don't want to sound overly optimistic like, yes, clearly we're casting our net a little broader. For a time, we were quite focused on Ghana. We are appreciating now that we may have to look broader. I mean, it's not impossible that Ghana could happen within that timeframe as well.

Okay. And then with respect to the other FSRU that you ordered, two things, first of all, you didn't put the pricing there. I'm just curious as to why that might be and what the CapEx schedule may look. Obviously it's nice to only have 5% of it initially, but curious what the subsequent CapEx schedule of that would be? And then also, with respect to the two options, what is the timeframe in which you need to exercise those?

Ben, I will talk about the CapEx and the price of the FSRUs and actually there isn't very similar to the FSRUs that we had previously ordered so along those pricing. And as far as the CapEx is concerned, it's a fairly flat CapEx. We have tried to put as much as possible the very back-end. So the 5% is a good measure of that and not suggesting that we don't know pay anything until the delivery of 95%. There is some payment milestones ahead of us, but it’s also pretty much in line with that number.

Okay. And the timing on the options?

Yes, some mid and late 2018.

Okay. And then my last question relates to something that you said earlier about Venezuela not being on the list of the potential for the third FSRU or FLNG vessel, assuming that's the Rosneft deal. Is that still on the table for longer-term or is that no longer sort of something that you are looking at?

No. I mean the Rosneft suite of opportunity still sits within our development funnel. Really what we are focused on right now is as quickly as we can progressing and maturing an opportunity for 2018 startup and our sense of that opportunity in Venezuela with Rosneft is its going to take more time.

Okay. All right. Very good. I will turn it over to someone else, thanks.

Thanks, Ben.

Thank you. We will take our next question from Jon Chappell from Evercore ISI. Please go ahead. Your line is open.

Thank you, good afternoon. Three just quick follow-ups for you guys. First of all on the 2018 GoFLNG with the four short list of projects, I want to ask you for timing on that, because obviously it's probably still up in the air, but realistically when would something have to be set in stone to actually start producing gas by 2018 when that asset would be delivered?

Yes. We have – I guess someone arbitrarily set ourselves the objective of maturing one of those opportunities to a similar level of maturity as we have today with Ophir within the first quarter of next year. I think if we're not at that level of maturity within that timeframe the chances of us actually getting to a 2018 startup is remote. Having said that, the date of 2018 is somewhat arbitrary as well, so it's not impossible, we could be starting up early 2019. So these things move around a little bit, but if we truly want to have a sort of mid-2018 startup than we've got a window of maybe six months to mature that opportunity to the same level of maturity that we had with Ophir in Equatorial Guinea. And I would just say we progressed that discussion with Ophir within a much shorter time frame than what we're contemplating here. So we have proven it can be done. And again importantly, the economics of our proposition don't require you to have an advanced security buyer, because we're pretty confident under almost any oil price or LNG price regime our project will be economic.

Right. And it looks like the FID for the Ophir projects was about 12 months after you signed. Would we assume the same type of window there as well, or would it need to be maybe by the end of 2016?

Not necessarily. So in Ophir, the time between when we signed the term sheet to when we expect to take FID has been governed by the time Ophir needs to do their upstream FEED and cost estimation. So they've got a significant amount of work to do to sign off on their upstream development. In some of the opportunities that we're currently contemplating are basically we're looking into pipeline gas, and so it's essentially a plug-and-play job opportunity, which could get you to FID in a much, much shorter timeframe that we're contemplating in Ophir. It's the upstream dimension of Ophir that dictates the longer timeframe between now and FID.

Got it, understood. Brian, given the new potential timeframe on the Tundra contract, you did mention the financing it sounds like it's pretty close, how much do you need from a debt financing perspective on Tundra and how should we think about the terms relative to maybe what we thought about three months ago we thought there would be a contract in place at delivery?

So we actually the way we have been approaching this is of course given and there is a potential for the contract to be delayed a little bit is that we have been discussing two fronts. One is where the vessel will have a contract and one where the vessel doesn't have a contract. And both of those are very similar in terms, obviously one is slightly lower in loan to value, but otherwise pretty close to the terms we signed with respect of the latter four delivered vessels, four delivered ships in earlier this year.

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

Much higher than that.

Much higher.

Yes.

Okay, got it. One last thing the only pushback we seem to get on the FLNG so far is still on kind of new technology concerns, you were at 60% completion of the construction. As it relates to things like size or weight of the top sides or potential sloshing issues, at this stage of construction completion, are you pretty confident that none of the issues that may be out there that you were thinking about before you move forward are feasible?

So let me just deal with one aspect of your question first. We're 60% of the project completion which doesn't necessarily equate to 60% of the construction activity. So that 60% includes very significant efforts on the design and the procurement front as well as the actual physical building of the vessel. As I think I said in some of my earlier comments, the key challenge here has really been around the physical design of what they are building. All the elements of the concept so the liquefaction trains the top side, the vessel, the storage, the sloshing, all the things that you mentioned are well proven on land the vessel – as a vessel for many, many years, the concept of LNG ship to ship transfer, we have been doing since the Golar spirit our first FSRU project which has been operating in Brazil now for getting close to 9 years, 10 years. So all those components of the project or concept are well proven. All the elements that go into the vessel, the gas turbine, the compressors, the pumps, the columns are all operating somewhere in the world on a floating structure whether it's an FPSO or something similar so what the component level the concept level and each of the elements of our design all of that as well proven. The challenge to us has been how do you put all this together with the limited space you have available within the vessel. If you look at our vessel compared to a conventional land-based LNG plant that the obvious and stark differences if we don't have the real estate that a land-based project has. So the challenge has been to put it all together in a way that is compliant with those codes and regulations. That is behind us essentially now and so the challenge still remains to build it and then to set it up. But I feel we have really come a long way and I don't want to understate the importance of what remains in front of us. But really what we have in front of us is a bigger version of what we have done with the early FSRU projects in terms of building it, delivering it and starting it up.

Great. That's very helpful. Thanks Gary. Thanks Brian.

Thank you, Jon.

Thank you. We will take our next question from Sunil Sibal from Global Hunter Securities. Please go ahead. Your line is open.

Yes, hi guys. Quick question from me on the FLNG. I was kind of curious, as you have gone through the first FLNG and subsequent FLNG that you go through, is there an expectation of loading of the FLNG building caused as you kind of perfect this whole process?

So I think two things, two comments I would make. So typically the service industry that is servicing our projects don't have a lot of other activity at the moment. So where I think it's easier than it might have been for us to scale up, so when we talk about a potential fourth project we're generally well received by oil suppliers. And I think that's a sign of the level of activity in all the various markets that FEED into the FLNG. So somewhat counterintuitively this is a good time for us to be doing what we're doing. And clearly, as we have concluded our first unit what we learned, and indeed the second, third and fourth units should the fourth we built for the large part carbon copies of the first unit. So it's really just replicating with perhaps some learning from the earlier vessels as we do the subsequent vessel. So there is an expectation that we will finance the CapEx, but as a result of the market which we're currently working in and also as we learn. But in terms of the overall project economics is it going to be material? I'm not sure, I'm going to predict that. We are confident though that the cost will head down rather than up with the subsequent units.

Okay, that’s very helpful. And then when you think of your competitive position in the FLNG market, especially with regard to the first our advantage, I was kind of wondering if you could handicap where you think the rest of the competition is in terms of the timeframe? Are any other aspects, cost aspects of the business top of FLNG?

So I think there are two FLNG markets. I think the shell prelude big end market is not clearly not where we are playing, so what our end of the market, so relatively simple liquid fires sort of 2 million to 2.5 million tonnes per annum. 1 to 2 cf of gas that sort of our sweet spot. We are not conscious of any real competition now and I guess we kind of hope it stays that way for a while. I think our experience with FSRUs was a little bit instructive here. As Brian I think mentioned earlier when we went into FSRUs some people were skeptical others didn't want to be first mover eventually the concept got excepted and today the question is more why aren’t you doing a FSRU rather than why are you doing in FSRU project. And it's not seen as technically risky at all and by that time other people come into the space. It's hard to predict how quickly this market will mature and how quickly others will come in. We're not so arrogant as to assume we will have the space for ourselves forever. But we do know and we have a good understanding of the hit it is taken us to get to this point in time and we know that from anyone else who follows in our footsteps is a considerable amount of work for them to do and I would say also considerable amount of courage to take on what we're doing.

That's all I had, thanks.

Great.

Thank you. We will take our next question from Chris Wetherbee from Citi. Please go ahead. Your line is open.

Hi, great, thanks for taking the question. I guess I just wanted to sort of come back to that question about competition, but more from an FLNG perspective. Just wanted to get a sense, assuming everything gets signed by the end of September and we have the Cameroon project moving forward as expected. How do you think about sort of competitive investment in this technology with Keppel, other potential opportunities at other shipyards? I just wanted to get a sense of maybe how you guys sort of see the competitive market or dynamic developing really in the next year or so, assuming sort of success in these first ventures?

It's hard for us to predict what's happening with our competitors. And we draw comfort from the fact that we're working with the best two partners in what we're doing. So we think there is no doubt that Keppel certainly the premier shipyard when it comes to taking on this sort of projects we're doing the position in FPSO conversions is second to none. And similarly in no doubt that we have the best partner with Black & Veatch in terms of the topside. So we're in a very strong position and we're confident that we will continue to secure their support as we take this business forward. And I guess it's for others to develop their own business model. And no doubt they will, but I guess as I said in my previous answer is going to be a challenge for them, as it has been for us. And this is a journey that started for us many years ago and we're seeing a lot of hard work by a lot of people come to fruition and hopefully when we sign the contract with Perenco in the next several weeks it will be a validation of a lot of hard work by a lot of very talented people over a long period of time. How others actually replicate that, no doubt they will, but I think it will take some time.

Okay, that’s sort of my view you have at least a multi-year head start on competitors, and I guess we see where it goes from there. I guess the other angle of my question was sort of around how you think about valuation of some of these investments in the competitive dynamic, just kind of curious if you have thoughts on that? I’m assuming the conversion opportunity that you are in discussion are all relatively or at least the last two are relatively similar from a price perspective, just want to get a sense of maybe how those conversations sort of evolves over the course of the next several months?

The way we’ve positioned our proposition as we talk to the potential clients is really to benchmark ourselves on really the U.S. Gulf of Mexico alternative. So really that’s our benchmark. We feel that we can be competitive against the U.S. Gulf Coast Brazil conversion projects, of course the advantage we have is that we can do that in any geography and we build in Singapore and so our CapEx is in fact lower than typically the U.S. Gulf Coast projects. So that puts us in a very strong putting when we actually sit across the table with potential clients, and at the moment at least there is no better alternative for them…

Okay, that makes sense. And one final question, just want to make sure I understood your comments particularly around the Tundra, as far as the way we should be thinking about this you hope to get something done by the end of the year, but maybe sometime in 2016. Is it more likely with delivery expected it still the fourth quarter of 2015. Is that right?

Yes, I think that’s a reasonable summation.

Okay, that’s helpful. Thanks for the time guys. I appreciate it.

Thanks, Chris.

Thank you. We will take our next question from Shawn Collins from Bank of America Merrill Lynch. Please go ahead. Your line is open.

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

Good morning.

Thank you. I just wanted to turn to the changes in the Board of Directors. I wanted to inquire into why Sir Frank Chapman is stepping down so soon after only joining the Board a year ago last September? I know it’s largely a personal decision, I know you cannot speak for him, nor would you want to, but can you just talk about that impact on Golar LNG?

Sure. We haven't back to board changes. Announced so Kate after a very long time and service to Golar will be stepping down at the AGM next month and indeed Frank similarly has elected not to seek reelection from the board. I think from the Company's perspective from the boards perspective and from my personal perspective we're very grateful to the contribution that both Frank and Kate have made, particularly being helpful to have Frank around as we have matured the FLNG projects particularly in a sort of strategic and sort of risk management perspective. He's been extremely important to us there, and we wish him well. I don’t know really, and as you rightly say I can't speak for Frank. I think it's been well covered in the press release, he for his own good reasons has chosen to devote his time elsewhere. And will not continue with Golar. I think we’ve been very fortunate to have him on the board for the period that we had. We are grateful for his contribution and we will march on. The story started well before Frank joined us. He for sure has shaped it and he is been with us at a very important time in the evolution of the strategy, but we have a lot of talented people in Golar. We have got a very, very high-class board. We've got Dan Rabun coming in as the new Chairman and the story will continue. There won't be a very confident to say there won't be any change in direction, strategy, intent, as a result of these board changes.

Great. Thanks Gary. And just my last question, turning to the LNG carrier market, understand that the market was soft and under pressure in the quarter. I know you cited that you expect some solid improvement in third quarter. Can you just provide some context what solid improvement means? Utilization was at 33% and rates were probably in $25,000 to $30,000 per day level, how much improvement might we possibly expect in the third quarter?

So let me, in answer to your question give you a snapshot of where we are today. So if you look at the 10 newbuilds which we have taken deliver of over the last 12 months to 18 months, right now 8 of those 10 vessels are in employment, and one of the three steamships, so that's a big step up in the sort of 33% employment that we saw across the last quarter. I think it's fair to stay notwithstanding that the utilization is stepped up the rates have not yet followed, but generally we need to see the utilization of the fleet tick up before we start to see rates turn. We're hopeful that the projects GoFLNG, Asia-Pacific LNG, Curtis Sabine Pass all get going as advertised, and there's a bit of a dynamic in the market which we also see which is the Far East buyers are not buying a quite the volume they have historically been buying into the extent that this new production comes on stream it maybe looking for markets further field which of course is good for shipping. Ultimately, I think we're going to see cargoes diverted into Europe, which is really the only liquid market open to LNG with the U.S. now no longer a player of LNG. So the signs are there for it to improve. If we look today as I say, 80% of our newbuilds are on higher, the rights are pretty much as per we’ve indicated in the press release but the utilization has to tighten first before the rates follow.

Also I think as it relates to Q3 operating results one thing that disappears from expenditures of course is the Golar Eskimo charter end costs from LNG Partners. As long as that necessarily improves performance of the vessels, it certainly should improve the operating results for third quarter.

Great. That's very helpful. Thanks Gary and Brian, I appreciate the time and insight.

Thank you.

Thank you. Could the administrator please just take the last question for the call?

Thank you. We will take the last question from Magnus Fyhr from GMP Securities. Please go ahead. Your line is open.

Thank you, and hi Gary, hi Brian.

Hi, Magnus.

Hi.

Just a quick question on the CapEx going forward. I mean you have the Hilli project fully funded, I think you’re only going to spend $15 million on the Gandria over the next 12 months and the other FLNG projects remain on hold until you get an FID. What's left to spend on the Tundra? And can we assume that this all going to be debt finance the remaining CapEx?

The answer is yes. The only remaining installment in the Tundra is really the delivery installments, which is going to be at the end of November or beginning of December and that will be fully debt-financed.

Okay and what is that amount can you disclose that?

I’m afraid I can't, but it's similar to the previous FSRU installments have seen in the past.

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

Correct. There is a small CapEx and respect to the FSRU that we ordered in July, but as I mentioned earlier, again the pretty small simply because we’ve negotiated smaller installments until we get the delivery points.

Okay, great. That’s all I had, thanks.

Okay. I think we need to bring it to a close, because we’ve got partners coming on very soon. And so my thanks to everyone and we look forward to joining you again at the next quarterly results,

In November.

In November.

Great.

Cheers. Thanks all.

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