Good day and welcome to the Golar LNG Limited Quarter Four 2015 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. Please go ahead, sir.

Thank you very much and welcome to the 2015 Q4 results call. The agenda for today’s call will follow along familiar lines. I’ll quickly run through the highlights for the quarter and then turn to Brian Tienzo, who is with me here in London to walk you through the financials and then I’ll come back with a business update and then our summary and outlook for the coming quarters. So on the presentation, turning to page 4, we announced today a reported loss of $12 million for the quarter as compared to a 3Q loss of $5.9 million, the deterioration primarily the function of a deteriorating short-term LNG carrier market. As previously announced, we’re pleased to confirm that Perenco and SNH have signed with Gazprom, a 8-year sale and purchase agreement for LNG that is to be produced from GoFLNG Hilli to be employed in Cameroon. During the quarter, Golar took delivery of its lightest FSRU, the Golar Tundra and she confirmed a 5-year contract with West Africa Gas Limited, West Africa Gas being a joint venture between, NNPC, the national oil company of Nigeria and Sahara. A lot of activity on the financing side during the quarter, including the initial drawdown of $500 million against the $960 million deficit of the full GoFLNG Hilli and indeed post quarter end, there has been a second $50 million drawdown against that facility. We announced earlier this year the signing of a Memorandum of Understanding with Schlumberger to co-operate on the development of floating LNG projects on a global basis, covering greenfield, brownfield and existing projects and I’ll come back and talk a little more about that later in the call. Post the end of the quarter, the Golar Tundra has now been sold to Golar Partners for the sum of $330 million. Announcing today for the first time, we have secured a charter for Golar Arctic. She will go into service or go on hire during this month, with an intended service in Jamaica as an FSU, and I’ll talk a little bit more about that later on. We’re pleased to announce the appointment of Ms. Lori Wheeler Naess as a Director and she will also Chair the company’s Audit Committee. And then finally, the board has set a dividend for the quarter at $0.05 a share. I’ll now hand it over to Brian and come back a bit more on the details as we get into the call.

Thank you, Gary. And turning to page 6 of the presentation, we will look at the financial highlights of the quarter. As Gary already alluded to, we’re slightly disappointed on the decrease in net - in EBITDA from what we saw an improvement in Q3. Unfortunately, the Q3 improvements that we saw didn’t really continue to materialize into Q4. And as a result of that, our net revenue was down by $3.5 million to $11.5 million in 4Q from $15 million in the third quarter. The main reason for that particular drop is really on two vessels, both the Golar Arctic and the Golar Grand contributed revenues in the third quarter. Unfortunately, those two vessels, which were oldest steam vessels didn’t contribute in 4Q. There was a decrease in revenue, arising of that of approximately $2.1 million. We were also having smaller decreases in the quarter from the third quarter, but really the Arctic and the Grand were the notable ones. As you can see there in the box, the first red box, other voyage expenses decreased slightly from $5.7 million in Q3 to $4.3 million in Q4. Now, despite the vessel utilization not improving further in 4Q, as we announced, the quarter four’s performance allowed our utilization in TCE to be at least consistent with our 3Q statistics. And as a result, Q3 TCE of 43% was matched by Q4 TCE - Q3 utilization of 43% was matched by Q4 utilization of 42%. And despite a reduction in revenue, the TCE for the quarter improved from 10,750 to now $13,809 per day. You will have noted that in previous quarters, one of the biggest variables that you see in our financials is regarding net financial expenses and income and unfortunately, that is again notable in our fourth quarter results.…

Thanks very much, Brian and I’ll kick off again on page 11 of the presentation. And one change on the familiar Golar portfolio slide and that is the charter of Golar Arctic to New Fortress and one change to be flagged, which is the sale of Golar Tundra up in to the partnership, which will take place we think shortly. I’ll move on to slide 13, which is the first of the slides in the business update section of the presentation and slide 13 deals specifically with LNG carriers. And as we’ve mentioned now a couple of times already on this call, the spot market to LNG carriers has remained disappointing throughout the fourth quarter. We’re seeing utilizations maintained at the sort of around the 40% to 43% level with some softening in for the headline charter rights associated with that. Moreover, as we see Q1 unfold in front of us, we don’t see a material improvement in the current quarter, but what we do see right now is a lot of activity on the liquefaction side with a range of new projects, just starting or getting ready to start. Indeed Cheniere have loaded their first cargo from Sabine and I’m told reliably that Gorgon had a ship standing by ready to receive their first cargo as that plant goes through its final startup activities. The projects on the East Coast of Australia are now all running and ramping up and Cheniere will follow with the train 2 startup in Sabine Pass shortly thereafter. So in aggregate, there’s quite a wave of new incremental LNG capacity coming on stream right now as we speak and that gives us some confidence that we will start to see an improvement in the spot market from Q2. Looking a little bit further out…

Thank you. [Operator Instructions] We will now take our first question from Michael Webber from Wells Fargo. Please go ahead.

Hey, good morning, how are you? A bunch of stuff to run through this morning. First around new FLNG projects. Gary, you mentioned you guys are prioritized and you're kind of focused around two primary areas. Can you give us a sense of what you're looking at in terms of geography? And then in terms of reserves versus something more akin to early stage production that could kind of turn into something larger and kind of purely FLNG. I guess maybe trying to compare this to projects you're already working on versus say bigger pockets of reserves.

Sure, happy to do that. Firstly, one of the two opportunities - so the need to narrow to two specific projects is simply a matter of maintaining focus and properly resourcing opportunities. The first of these two opportunities and the one that probably looks most progressed is another West African opportunity. It’s a very significant resource space. So the resource is still being explored, but as currently announced, it could employ more than two vessels although discussions at the moment are on the basis of at least two. And we are hopeful of securing a binding HOT within along similar lines to what we have achieved, we will see down the middle of this year. The second opportunity is a Middle Eastern opportunity which we have discussed on and off at various times. It’s again quite a scalable opportunity. There are some issues which need to be navigated with that opportunity. So we continue to work at.

Fair enough. Maybe specifically if I think about the African project that you guys are focused on, how would the credit/counterparty risk there kind of compare to what you currently have in your book, if I think about how that portfolio and that credit risk kind of evolves over time?

That’s a difficult question to answer. I mean, there is a potential for Schlumberger to come into this project as well. So that has a material bearing on the security and the risk of the project. It’s material. It’s at the upper end of the various projects that we’ve been working, but I don’t think I want to say more than that at this stage.

Okay, fair enough. I guess one or two more for me and I'll turn it over. But obviously the dividend cut was something that you talked to as a possibility last quarter and something that's been kicked around the market for a long time. But now I guess as I think about the forward liquidity profile, I guess now through 2018, which would kind of be the pre - or end of 2018 is pre-material FLNG cash flows. How do you think about the funding for additional FLNG carriers from here on out? Do the cash savings here mean you can fund those assets without having to staff any new capital markets and fund it by cash from operations? Just kind of help us conceptualize the new liquidity profile for you going forward.

Mike, hi, it’s Brian. I think certainly that was the intention in trying to put all these events into place to try and really take on - there is one more FLNG project we are having to consider that we are tapping into the equity market which has always been one of our concerns and certainly investors’ concern as well. So the reduction of the dividend and it’s a material reduction as I am sure everyone can appreciate and we - prior to this we were paying $170 million worth of dividends and now on an annualized basis we would only be paying around $20 million, so it certainly - that helps a lot as well as in terms of preserving liquidity. And whist we haven’t yet finalized and made for the financing for the second FLNG, there is going to be certain element of equity required in there. And what I mean by that is that Golar will have to, as we did with GoFLNG Hilli, Golar will have to contribute certain amount of cash in there. We are trying to reduce that as much as we can. But clearly there is going to be an element of that and the recent reduction in dividend, the refinancing of divestments and of course they tend to drop down and will go towards making sure that we don’t have to pause when it comes to taking FID on Gandria.

Fair enough. I guess one more for me and I'll turn it over, and this is around the regas segment. You note the potential new strategy in converting more modern carriers to regas assets, which would be somewhat capital intensive. And then you also reference separating out the downstream business. I believe, I guess the assumption is that those two would potentially dovetail together, so I guess my question is that a scenario where when you say Golar owning a stake in that, is that something where you would have a strategic partner and they would share in the capital outlay there? Is that something that you would try to float? I guess how do you think about that? And then I guess if they are - if that is the conversion idea dovetails with separating the downstream business, would that mean the carriers and the conversion candidates would go with that asset base or would they stay with Golar parent?

Okay, let me, Mike, start on that answer and Brian will jump in at the appropriate point. So the business case for the FSRU conversions is driven by a fairly light order book for FSRUs going forward, a high degree of interest, conversion economics which makes sense. The fact that Golar really is the only company in the world who has successfully converted carriers into FSRUs, we’ve done four. So, Spirit, Winter, Nusantara and Freeze were all previous conversion candidates, so we will buildup reference list of successful projects. So the ability to delivery quickly, the capability in-house to deliver an order book which we think is lightweight and the opportunity for us to rebalance our portfolio within the company more towards FSRUs and away from carriers all seems to make good sense. We’ve concluded the technical due diligence to the point now where we have a good handle on what it will take technically and commercially to do the conversion. The need to also progress with the Brazilian project seems to suggest that there is a good synergy between provisional FSRUs and then combining that with the position which we built in Brazil which has application in a number of parts around the world. In terms of - so Golar will still be the majority owner of whatever it is that we create, but we do see the opportunity to bring in probably a strategic partner in much the same way that we bought Schlumberger in on the upstream. We agreed to work together. We see the opportunity to replicate that kind of structure downstream of a company such that we have strong partners or associations with strong partners both upstream and downstream of our midstream business and then together we can execute projects. So at the end of the day what people really want is power. No one really is interested in having a jar of LNG in a fridge. What they really want is power and so what we are trying to do is connect from the wellhead to the wire leaving the power station a business execution model where we are dealing with people we know. We can execute quickly and we can reduce significantly the cycle time. I don’t know if you will add to that, Brian, on the finance side.

I think Gary has covered mostly - really the points regarding this project but certainly from the financing side, I think having, as alluded to already, having a strategic partner within this carve out company and making sure that each partner has something material to contribute to those projects will help to finance the project as well. I mean, we’ve seen previously how the Sergipe project was complemented by adding FSRU by Golar going in there with FSRU. I think we expect the same synergy effect by putting couple of more or more than two vessels in there that would be converted into FSRU. And as far as how that could be constructed as also alluded to the intention is that Golar will remain a majority shareholder of that piece of business, but it will require or it will have some help from strategic partners to make sure that the capital outlay and the ongoing servicing of those vessels is not left for Golar to carry on its own.

So, Mike, there was one more element to your question which I neglected to answer and that is that at this stages no intention to put the balance of the carrier fleet into the parent company.

Right, okay. And if you hold the majority of stake it’s a formality at that point. Okay, all right, I appreciate the time guys. Thank you very much.

We will now take our next question from Fotis Glannakoulis from Morgan Stanley. Please go ahead. . Please go ahead, sir. Your line is open.

Can you hear me?

Yeah, we can, Fotis, yes. Go ahead, Fotis, we can hear.

Yes, I want to follow up on your comment about your Middle Eastern opportunity. And I assume that we are talking about the comment that they came out of Iranian officials about potential cooperation with Golar. Trying to understand what kind of restrictions there are right now, and how is it for these restrictions to be lifted given the US sanctions?

Fotis, thanks for your question. I think hopefully you will understand if, on this call, we prefer not to confirm the counterparty or comment on the issues currently in front of us on that project. I think it’s commercially sensitive and something which we would prefer to work quietly on at this point in time.

I fully appreciate. Can you clarify if you are bound by these restrictions given the fact that you are a European company and not a US company?

What I will confirm to you is we will always stay with - strictly within the intent of the laws and rules that govern our operation wherever we operate.

Thank you, Gary. And regarding your cooperation and the partnership that you have crafted with Schlumberger, how do you see this partnership developing? Are there any specific fields that Schlumberger or any of its customers own? Or these are projects that you have been developing already and Schlumberger might come and step in like the case of Ophir? And also if you can comment about your cooperation and the CapEx requirement for this and all FLNG projects. I'm not talking about the Ophir project, I'm talking about new projects. Could Schlumberger facilitate the financing process on your side, or its involvement is going to be strictly on the upstream side?

Okay, thanks, Fotis. Let me deal with the first part of the question first. I think the answer is all of the above. You see already publicly announced Schlumberger’s potential participation in the Ophir project and we are now heavily into various discussions involving Schlumberger, not so much Golar, but Ophir and clearly their participation in that project strengthens not only the project execution, but for the agreement being negotiated provides the potential to finance a significant proportion of Ophir’s cost to execute that project. So that’s one clear example, which we can clearly point to which was almost immediate announcement of the cooperation. As I said previously, we now talk to a whole range counterparties, which range from literally oil major players, who may choose to lose Schlumberger, but probably wouldn’t to quite lot like junior explorers, but quite frankly we would struggle to get comfortable in terms of counterparty risk perspective. By narrowing Schlumberger with those junior resource holders, in effect what we do is create a much more substantial counterparty, not only for Golar, but ultimately for the buyer of the LNG from the project as well. And so the intent is to revisit among other opportunities to see whether our partnership approach might be better. Moreover, Schlumberger have their own knowledge and information as to where projects might lie, which up until now may not be clearly in our field of view. So what we see is a joint marketing effort. If you look between Golar and Schlumberger to shore up those projects, which are already on our development list to review the projects, which perhaps we might have passed over previously, because we assess that the counterparty was sufficiently solid for us to move forward, and then they would identify projects, which up until now have been outside our field review.

Thank you, Gary. Can you - given the low oil and gas environment and there is a discussion about the difficulty that LNG suppliers are having securing long-term agreements, can you remind us your breakevens and your anticipated economics for projects in West Africa? What is that an upstream provider needs to achieve in order to get sufficient 10%, 15% IRR? And what is your cost for your FLNG and the breakeven, in other words, what is the FOB breakeven that you have in order to make your required rate of return?

Fotis, I'll be brief, because I'm not sure if this call allows for a full analysis of the cost, but we believe it’s possible to develop and produce standard gas in West Africa at something a $1 gas price into a vessel. And then if you add another say $0.50 for tax and royalties, then roughly speaking it’s a $1.50 gas into our vessel. With an acceptable return for the upstream resource holder and the host government, applying a similar earning or IRR sort of mid-teens sort of IRR, we can produce LNG assuming fairly generic sort of project, no special technical complications, et cetera, et cetera. Now, toll all in the region of $2 per MMBtu, so let’s say $4 FOB West Africa looks to us to be profitable for Golar, for the upstream participant and for the host government. If you say $1 freight to most parts of the world then we’re $5 something delivered LNG from West Africa into most markets around the world.

All right, that's very helpful. How do you envision the new contracts, and especially if you can comment on the potential contract with Ophir? I think in the past you have mentioned that you were looking for a high - for a contract, which is going to be flat for the entire duration of the contract. Are there any discussions of having a lower floor than what you had discussed before with the higher upside participation to oil prices or the prices of the commodity?

So let me again deal with this question generically. Our sort of base business proposition when talking to counterparties is to offer a toll comparable to US Gulf Coast albeit in any part of the world. So what we can do is replicate a flat toll on our vessels in any geography that we can locate one of the vessels. As you know for the Perenco Cameroon project what we agreed to do is in fact to index the toll in that case on branches, but in theory we could do it on any related gas or commodity exposure. And the reason for doing that is to protect the overall projects economics in a low oil price regime. And so we’ve let that cat out of the bag and I guess, we are going to be talking about that sort of construct in projects going forward and we clearly demonstrated the ability to do that. I am reluctant to talk about the specifics of the Ophir negotiation at this moment in time because it really is a large negotiation and I don’t think it’s appropriate that we delve into that at this moment in time rather than to say once it’s done, as we did with Cameroon, we will share with investors in the market more generally the construct that we end up with. Just a pick up on an earlier part of your question, we are doing these deals in a world where the oil price is $30 a barrel and we’re happy to do the deal, the LNG buyer is happy to do the deal, the upstream participants happy to do the deal, and the host government is happy to do the deal. So to my mind, that’s a clearest possible demonstration you can give of the robust nature of the economics for our business proposition.

Thank you, Gary. That's very helpful. One last question to Brian. Brian, you just concluded the refinancing of two LNG carriers, and that drove down over $60 million on additional on each vessel. Can you remind us how many more vessels do you have with a relatively low debt? And what additional cash can you get if you do similar transactions, similar leasing financings on these vessels?

So I think just to clarify, Fotis, so of the two vessels which you alluded to as completed, one of those vessels is looking to be completed during the next couple of weeks, and then the second one is actually completing shortly thereafter. So that was the deal with the deal with the two that we mentioned in the first release. When it comes to the other vessels, we are - there are potentially four more vessels that could follow the same vein of financing. So some of those vessels we have slightly higher amount of debt at the moment, so the amount of equity you could release from those will be slightly less. But it ranges somewhere between $50 million to $60 million per vessel. So once completed, we could be looking at potentially liquidity released of anywhere between $200 million to $214 million in those ships.

Thank you very much, Brian. That's very helpful.

Thanks, Fotis.

We will now take our next question from Erik Stavseth from Arctic Securities. Please go ahead.

Hi, guys. I was listening to your comments on the well to wire. I think it's very exciting, and I want to get a little bit more feel on the power purchase in Brazil. Can you, first of all, give us any comment on how much of those - of the planned capacities committed? I understand that it's 1.5 gigawatt plant, so is the entire plant committed?

So the construct there is we entered into a PPA, payer purchase agreement for the provision of capacity of 1.5 gigawatts regardless of whether that capacity is dispatched or not. So in the first place, I think we referred to a return of something like 18% on total capital, which refers to the capacity - to the capacity payment. So to explain that, if we build a plant and it were ever to operate, then that’s a return that we would enjoy over the following 25 years. If the project is dispatched, then this is a near gas station, then there is ability to earn over and above the capacity payment depended upon the price of which we secure LNG. So an important component of this project has been to secure LNG at a price, which matches what we beat in the option. And I think I mentioned a few minutes back, we are close now to announcing the secure of LNG supply on terms favorable to what we had estimated in bid. And on the power station, the EPC contract for build and operating of the power station, again, the numbers we are seeing are favorable to base assumptions.

Right. And then the second question is the price you're being paid, is that BRL6.2 million or is it converted to dollars so you have FX receipt as well?

There is - it’s indexed, Erik, but the vast majority of it is Brazilian real. There is a component of it that’s also in US dollars, but the biggest chunk is in real.

The power component or the energy component is in US dollars, but the capacity payment is in real, which are inflation indexed.

Alright. And then what kind of - how much LNG would you be needing for that power plant, roughly 1.5 million tons on a 1,500 megawatt plant?

Yes, it’s roughly 1.5 million tons, I think from my memory it’s something like 19 carriers per annum.

Alright. Thanks. That's all for me.

We will now take our next question from Ben Nolan from Stifel Nicolaus. Please go ahead.

Thanks. Yes, so just following up on Erik's question, could you remind me about how much excluding the FSRU, how much capital outlay would there be towards say the Brazilian project or any similar project in terms of Golar's participation?

I think that’s obviously something that we haven’t yet disclosed, Ben, but it’s really a more of a work in progress. It very much depends on the investments that we put in there, the conversion cost that we eventually land on when taking account into the two ships that we - two or three ships that we may put on that power company. So the answer to your question is, we - that’s something that we currently don’t know offhand yet.

Okay. That's fair. Actually, and as it relates to the FSRUs and sort of the new approach or the renewed approach of converting existing carriers into FSRUs, first of all, I assume that is something that you would do on a speculative basis or maybe a tentative basis without a firm contract in place. And then approximately how much would it cost to do a conversion like that, and how long do you think it would take to - from start to finish?

The cost of a conversion - of a converted unit is comparable to vessel out of the yard, similar specification. The time to actually physically execution the conversion in the yard is of the order for the six months, again, a little bit dependent on the specification for the conversion. The lead time from commitment to project to actual delivery of a FSRU is probably of the order of 16 to 20 months, the difference being the lead time to order and have delivered the regas scheme. So we would - as we get with Golar Freeze and Nusantara projects, order a skid, basically which - possibly regasification and then we would have some four to six months to install these skids and the associated popping and instrumentation on the vessel.

And you would say order a skid without necessarily having a contract in place, is that a fair assumption?

So that is one approach, which we could take for sure. And once we have a skid on order, then we are able to move quickly should we secure a contact, and 12 months into that order, we are sort of four to six months away from being able to deliver a fully functional new efficient FSRU.

Okay. And then lastly for me, I'm curious if you can give a little bit of color around perhaps the rate that you were able to achieve for the Arctic? Or if you don't want to talk to that, maybe more generally, are you actively participating in tenders for LNG carriers, and any sense of where the market is for longer term charters if you were to be successful there?

You’ll understand, Ben, if I don’t reveal the rate at which we will fix Arctic at. It’s probably better than some comparable business that we are seeing recently done. Yes, we are participating in LNG tenders, the LNG shipping tenders, in fact, there is one going in today, and we have flagged our intent to be more aggressive there. We see with this wave of new LNG capacity coming on stream, some LNG buys have left light their decision to acquire a ship, so the charter ships and we are kind of hopeful that that might be an opportunity for us.

Okay. And the rates let's say relative to the spot market, how would you categorize or think about quantifying what a longer term rate would be comparatively?

So there really has not been and never has been in my experience a strong correlation between what you see in the spot market and what you see in the longer term market. But the longer term market has always provided ships at a number, which makes sensible return to the owner whereas the spot market is very much a function of the day-to-day supply demand balance. And so the most recent long-term charters that I am aware of have all been $70,000 something a day.

Okay. Great. Sounds good. And just lastly along those lines, how long do you think - these tenders seem to be having been dragged out quite a bit. Do you think we're getting closer to a point where some of those will be finalized, or is this just a function of a weak energy market that drags out the process?

I hope so. Sooner or later, this LNG is going to arrive, and so we think going forward now is a good time to start securing long-term charters and that’s we are going to put a bit of our effort.

Great. All right, well I'll turn it over. Thanks a lot.

We will now take our next question from Ken Hoexter from Merrill Lynch. Please go ahead.

Great, good morning, and good afternoon to you. Gary, could you just talk about maybe a bit on the timing of the final FID for Ophir, is that still targeted midyear this year? Is there any other change in your thought there?

Ken, thanks and sorry to keep you waiting. Well, the target remains middle of this year. There are a number of things that has to happen to make that happen or maybe I can just quickly run through them. We need to conclude the tolling agreement, and what in Equatorial Guinea is called the umbrella agreement, which is very much like the gas convention that we have Cameroon, so the fiscal and regulatory parameters for the project. Both of those documents are at a pretty even stage now. Ophir need to conclude the marketing of the LNG and enter into LNG SPAs within the project. The role of Schlumberger in the project needs to be finalized and that’s the discussion currently underway. Brian needs to conclude his financing on the Gandria, but we are completely confident that he will achieve that based on a very good track record. What else is outstanding? That’s - they are the main elements. The target is to have most of those work streams concluded early to meet Q2, which would then facilitate a presence of ratification and Board approval and an announcement around the middle of the year.

Okay. And I guess maybe one for Brian. Last quarter there were a lot of surprises, maybe some of the locking in of capital that constrained, that weren't I guess a surprise to the Street in terms of how your financing structure was moving forward. Would you say that it seems that it's been freed up a bit, or at least you've taken steps? And I guess obviously dividend kind of is one part of that, but maybe even some of the other constraints or is there no new highlights there is that is [indiscernible] if you maybe, Brian, if you could talk a little bit about that?

Sure, Ken. So I think - I mean, obviously, we - I mean, the liquids are being one of the focus of the company at the moment and given the performance of the investments that we have, having those remaining operation will obviously continue to be a constraint to the company. Having said that, I think we’ve now got a list of action plans that we are either putting into place or about to put into place in order to try and make sure that those constraints do not actually require us to pause on the projects that we have. As I said, I think we all agree that the posting of $280 million in LCs obviously something that’s been a material to the company that could actually - has allowed us to progress more quickly on certain projects, regardless that we have to deal with that. The bank which has issued LC continues to syndicate the LC and we expect that - some of that cash will probably come back to Golar soon. Nevertheless, we are looking at the refinancing of the vessels, two of those would be done very soon, and the other four, we expect to be done before we get FID on Gandria. And once you have done the Gandria, I think there will a certain amount of capital that Golar can put to work, but I think at that point, we need to have a look at other answers within the company that allow us to free up or make flexible of the financings or as Gary mentioned just now, it’s good that we completed the financing on the Hilli because it gives us skeleton upon which we can put bones, we can put meat in. So the discussions that we are having on Gandria at the moment is along the same lines as how we started off in the Hilli, and obviously the progress in the Gandria is going to happen much more quickly because we have brought in [ph] that root already and the documentation on that is still fresh in our minds to some extent. So while the timeline is a bit more constraint, we do have at least a very good head-start when it comes to both financial discussions and documentation.

That's helpful. And I think Gary had mentioned still target five FLNGs by the end of the decade. Just to clarify though, the Hilli and the Gandria are still the calendar, right? You're still not moving with that extra carrier in between, so anything now would be after?

Yes, that’s right, Ken. I think - so the thought includes Hilli and Gandria, clearly. And the sequence which the projects deliver as we see them will probably involve a little bit of leapfrogging, so you may well see project number three delivering its first vessel before the second vessel in Equatorial Guinea for example. So we’re, as I said previously, increasingly confident of four vessels either producing or somewhere in the process of being converted.

You're hitting on there on exactly my question, though, you think that project three may still come before Equatorial Guinea and Gandria?

No, realistically, I don’t think so. I mean, that’s - I think we’ve all, but given up on that, but we haven’t declared defeat publicly yet.

Understood. Thank you for that, Gary. And then lastly, just with Guinea now, exporting its first LNG cargo recently, you - going back to Ben's - kind of back and forth on rates, it sounded like you were saying $70,000 is most recently good charter rate. But as I understood, you then follow-up, I just want to clarify your saying that there is no more or you're not seeing a big jump up in activity to lock those in or you’re starting to see some rumblings where you can now move forward and secure some additional charters for these - for your vessels?

Just to qualify, when I said 70 something is the charter rate, that’s clearly against the long-term charter. So, I think spot voyages are clearly happening at numbers or just half of that number in the current market. But long-term deals and I think some of our competitors in the last 12 months have done long-term charters which we could point to, which as we understand it start with a seven. And that's the sort of number needed to provide an acceptable return to the owner typically. But the spot market which is quite decoupled from the term market it is clearly a functional dynamic at the time.

We will now take our next question from Herman Hildan from Clarksons Platou. Please go ahead.

Good afternoon guys can you hear me?

Hi Herman, yeah we’re good, we can hear you.

The first question relates to the press release when you announced the Schlumberger contract. You had a comment there where you say we announced the first project within two months, which takes it to March. Is it possible to give some color on that and whether that is still the case?

I think the first project was announced within nanoseconds of the cooperation agreement going out. So, the first project which we were flagging in the cooperation press release was indeed up here, we hadn’t quite anticipated that it would fall along as quickly as it did but that was what we were alluding to at the time.

Right. And then on the other partners that you've held so far in development of FLNG, Keppel and then Black & Veatch to taking ownership in the asset. Should we expect Schlumberger to take an ownership in the asset as well? And do you think that will be larger or same size for the [indiscernible], Keppel and Black & Veatch?

Hi Herman, I think, I mean going back to Keppel and BV that those sort of partners of ours have already communicated their desire to remain owners of future FLNGs what we will do. With regards to Schlumberger, they’ve also communicated the same. Now the extent to which they become owners is yet to be decided. I think unlike Keppel and BV, where they were very much involved in the feed study and actually developing the project with us, Schlumberger is less so to that extent. And so they need to do some work which they’re doing now in looking at the project and at some point we expect they'll come back to us with their proposal but today, we don't have a specific number in mind all that we can disclose to you.

Right. That's okay. And also speaking about Keppel, I mean if you look at Keppel's potential growth there, as we saw this industrial sector looks quite grim and obviously an FLNG is an important part of their business. Can you say something about whether there's been any changing in terms on construction financing or so on for additional FLNG growth?

I would say that the relationship between Keppel and Golar is still symbiotic; I think we are strongly supportive of each other and working together. I think as a result of having now progressed well into the first conversion there are some lessons learned albeit not that many, not perhaps as many as you might have anticipated but we are learning better ways to do things, more efficient ways to execute and clearly a lot of what we've done in the first project is simply a matter of carbon copy for the subsequent projects. So, there will be improvements and we would expect that to be reflected in price and terms, but I wouldn't expect it to be material. So we see things certainly improving and it’s not just Keppel and Black & Veatch but there are all the equipment suppliers who are supplying into the vessel. I think it’s very pleasing that we are this far into a major project and we are not chasing any of our suppliers for delivery. So whether it’s pumps, compressors, distillation columns, call boxes, gas turbines all that is coming through pretty much to schedule. And so this is a nice time to be doing this work, I think all of our partners are keen to work with us and I think you will see some improvement but I think at a headline level, it will be probably lost a little bit in the noise.

Right. In your report you talked about potential financing on the Fortuna FLNG and terms being better than the entire financing on the first one. What kind of depth capacity would you say that the unit has on a pre-delivery basis? And also once it's up and running, should projects finance, or could you give some color on that as well please?

As alluded to, we’re looking at a variety of structures there. Obviously, we were quite successful in putting the GoFLNG Hilli into [indiscernible] financing and I think that’s kind of contract length GoFLNG Hilli being a firm eight years with Perenco, as of today or suitable for that kind of financing simply because it allowed us to get much longer profile. Now with the Ophir project as Gary said is a 20 year deal and in my mind that's quite, there is a sweet spot for kind of project finance structure. Now, when we say that we’re looking for improvements, we’re saying that relative to what we achieved in Hilli. So you'll remember that we were able to achieve 60% pre-diluted financing and jumping to 8% on the completion of the vessel. So the base case that we’re trying to achieve is simply that but actually the discussions that we've had, the potential finance providers is to try and increase those numbers that I've just mentioned in order that one, we’re able to progress the project and limit the equity participation of Golar as much as responsible. And also at the time of delivering the vessel, the amount of equity that comes back to Golar is a bit more substantial. So those are the kind of parameters that we’re working at, I think that as far as the pricing is concerned again it's going to be fairly comparable to the growth LNG financing that we concluded a couple of months ago.

And then kind of on the contributed equity into the FLNG from all the partners with an equity stake, is that the amount throughout the basis, or is there any call it different way orders when you pay slots if for example Schlumberger moves into the --.

Sorry to cut you off, Herman. No, so it’s basically a pro rata basis. So you'll remember that Keppel and ourselves and BV all contribute towards the equity contribution or contributed towards equity contribution for the Hilli. That is again the target that we would put into place were we to sort of craft the shareholders agreement in respect of the Fortuna FLNG. So it will be a pro rata across the shareholders.

Right. And then moving over to Golar Power, where will you source the gas from for the LNG call it. Have you decided that yet?

I mean you just going to have to be a little bit patient on that, we're very close to being able to say publicly where the LNG is coming from.

And what's the startup of the pipeline?

Under the terms of the contract it needs to be operational by early 2020 but there is nothing that prevents us from starting early if we can be ready.

Alright. And then just on the return on the power plant, you mentioned 18%, is the best if it isn't called upon. But if it is called upon on the 100%, how high will the return potentially go then if you have a $5 payment and if you delivered price into the power plant?

So that’s very much depended upon the LNG supply contract which we’re as I keep saying very close now to finalizing, it’s another few percentage points. So the vast majority of the return on that is derived from the capacity. And then, somewhat dependent on how the dispatch profile looks going forward then there is a little bit more upside for us on that.

Okay. And just the final question on Hilli. You mentioned that you're going to your obviously working on increasing utilization, but you also had a comment on increasing the term of employment. Is that like 8 to 10 years or is it a more meaningful increase in the term if you're successful in doing that?

Well the vessel is built for a 20 life. So the objective is to employ as much as of that as we possibly can. So at the movement, we're contracting at half main plate capacity of the vessel for eight years. But we clearly see the potential to double up on capacity and extend the term. Although I caution you shouldn't just double the earning potential of the vessel, I mean there will be a renegotiation there for sure with whatever we end up doing. But I think we've previously made public what a step up to freight train would look like.

We will now take our next question from Sunil Sibal from Seaport Global Securities. Please go ahead.

Hi, good morning, good afternoon guys, a couple of quick ones for me. When we look at the first two FLNG, one has a term of eight years, and I guess you're trying to extend that, and another one is 20 years. So for projects three to five, could you kind of talk a little bit about what kind of minimum terms that you would be willing to accept in order to move the projects forward?

Sure. So, Perenco here is more the exception. The Perenco Cameroon Hilli project is the exception rather than the rule. And in some ways having some excess capacity on our first project provides a little bit of comfort but really going forward and the projects that we’re currently working in Equatorial Guinea and the two other projects which I referenced in my remarks earlier are more towards the 20-year or are the 20-year life of the vessel and the full capacity of the vessel. So our base cash going forward is to use the full capacity of the vessel and then depending on the size of the field, employ the vessel for its full life. And certainly the two projects which we’re currently working not yet announced have the capacity to do full production for the full life. Ophir, if it's one vessel project than for sure it’s 20 years, 2.2 million tons. If it ends up being a two vessel project, it could be that the vessel number two is somewhat short of life but certainly well in excess of eight years.

Got it. That's helpful. And then I think you touched upon it briefly when we think about your cost of building or converting Hilli versus project number five by the end of the decade. Probably there are a lot of learning along the way. How should we kind of think about cost synergies from that learning process in an FLNG?

I would assume, I mean each of the specifications of these projects is a little bit different. So we know in Equatorial Guinea where we’re producing the reclaim of oil stream, the CapEx will be higher and we’re finalizing that right now. But in terms of the - and the compensation will be higher to compensate for the increased CapEx. But I think if you just want to think about it generically, my suggestion to you would be to hold the CapEx flat money of the day for the next five years.

Okay. Got it. And I think you ran through the economics for West African FLNG project, I think you came up with a $4 FOB cost. So I'm just trying to kind of get a reconfirmation on the components of that. I think you said $1.50 for gas coming into your vessel, and then the remaining $2.50 is basically your tariff plus operating cost reimbursement or is there any other component to it?

No, the cost - this is horribly simplified but it's the best we can do on a call like is, clearly the upstream results owner needs to be incentivized and remunerated for his project. The host government will want a piece of that action which results in very sort of approximate $1.50 of gas into the vessel. We then need to generate a similar sort of return another $2 dollars, so in effect I’ve rounded that up to $4 to accommodate the uncertainties in this very inaccurate analysis. So $4 FOB and then I’ve certainly in this rate market, a dollar will get you almost anywhere in the world. So a dollar landed into certainly into Europe and then another $0.50 say for the regasification tower From arrival in Europe would have you selling into Europe at sort of $5.00 to $5.50 regasified.

Got it that's helpful. And then last bookkeeping for me. Are there any extension options on the Arctic contract that you signed?

There is a possibility of extending. So Fortress' position in Jamaica is extended well beyond the two years charter that we have with Golar Arctic. We have put this business to get it quite quickly and in many ways its sub-optimized but clearly the intention was to get something done and to move forward aggressively which we in the first instance Fortress has certainly done and we played our role in supporting them there. So there is a potential for this to be a longer piece of business and we will work the details of that out as the project starts up.

He will now take a next question Chris Wetherbee from Citi. Please go ahead.

Thanks for squeezing us in guys, this is Prashant in for Chris. Most of our questions have been answered. I just have two quick ones. Regarding the Arctic and the Jamaica opportunity, what's the opportunity set for other projects like this in terms of maybe what you identified? If you can give us a sense of sort of size and any color on geographies? And following on that, if there's - following on the last questioners asked about the rates, with these extensions would you expect the rates to start to move up maybe not too longer term charter rates, but somewhere maybe more approximating above that or splitting the difference between where we are at spot and charter?

So the characteristics on the Jamaica deal, a market which is below the sort of minimum threshold for a normal FSRU and sort of desegregated demand structure. So, power stations are a couple of hundred megawatts rather than 1.5 gigawatts which is what we’re talking in Brazil and somewhat disbursed. So, as you think around the world, there are places such as Indonesia where a lot of their power like Jamaica is generated from liquids, where each of the islands - a lot of the islands in Indonesia could not support a FSRU but could support a sort of break bulk sort of supply chain in small parts or sizes. And the incentive for them to switch from liquid to LNG is quite material. And then you just cast your mind around the world, places like India where there is huge appetite for LNG but not a good gas grid to support distribution of LNG, places in Africa. Predominately the developing world where there are desegregated demand centers, which are currently deriving the fuel from liquids rather than gas. So it's in time, it’s quite material but it will take some effort and typically Golar is not the company to be developing the sale of LNG in those markets but by working with people such as Fortress and adding our capability to their expertise at least in Jamaica is pretty successful, we are cautiously optimistic that we might be able to replicate that. But early days, we’re still executing project number one.

Okay, thanks that's helpful I appreciate that. And just a last question, just wanted to get a sense more of market for carriers. For the vessels on spot, and maybe could context this question in reference to the cool pool, how have lengths of haul developed? Obviously the carrier market is facing some headwinds, versus where we are, where we were maybe a year ago or exiting 2014, and to what degree is that part of the equation an impediment to utilization rates versus just the delay in liquefaction?

So, I think I missed the first part of your question, in reference to -

Length of voyages.

Okay, I understand. So, that has been I think a significant contributor to what we’re seeing today. 12 months ago we were seeing interregional trade, so you were seeing on a regular basis cargoes reloading out of Europe for delivery into the Far East. So the same cargo not only was being carried twice but was being carried significant distances as well. But trade today seems to be more intra-basin and that's because the arbitrage that used to live between the Atlantic and Pacific is essentially reduced to the point where there is no incentive for the traders to try and chase that arbitrage. So what we see is an increasing number of voyages but the length of those voyages materially shorter than they were 12 months ago. And that's really driven by a fall in LNG demand generally LNG demand in the big LNG consumers of Japan, Korea, China and Taiwan. And I guess that's on the back of economic activity in those economies. Offsetting that has been the opening of new markets, so we've seen Jordan, Egypt, Pakistan, all countries new to LNG coming on stream at the same time.

And just sort of to clarify then, could you give us a sense of just how much the voyage length has contracted versus maybe a year ago? Or is that a harder number to come up with?

I'm sort of guessing but it’s sort of half sort of typical round trip voyages of [indiscernible] days rather than 40 but I would need to verify that.

We will now take our next question from Gregory Lewis from Credit Suisse. Please go ahead. Please go ahead sir, your line is open. It appears he’s stepped away; there are no further questions at this time.

Okay, all that remains for us to do is to thank everyone for joining us and we look forward to updating you at the end of the first quarter results 2016. Thank you and have a good day.

That will conclude today's conference call, thank you ladies and gentlemen you may now disconnect.