Höegh LNG The floating LNG services provider · LNG: Liquefied Natural Gas SRV: Shuttle and...

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Höegh LNG The floating LNG services provider Company and Market Update May 2012

Transcript of Höegh LNG The floating LNG services provider · LNG: Liquefied Natural Gas SRV: Shuttle and...

Höegh LNG – The floating LNG services provider

Company and Market Update May 2012

Forward looking statements

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This presentation contains forward-looking statements which reflects management’s current expectations, estimates and projections about

its operations. All statements, other than statements of historical facts, that address activities and events that will, should, could or may

occur in the future are forward-looking statements. Words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,”

“forecast,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue” or the negative of these terms and similar expressions are

intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to

certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes

and results may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue

reliance on these forward-looking statements, which speak only as of the date of this presentation. Unless legally required, Höegh LNG

undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or

otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changes

in LNG transportation and regasification market trends; changes in the supply and demand for LNG; changes in trading patterns; changes

in applicable maintenance and regulatory standards; political events affecting production and consumption of LNG and Höegh LNG’s

ability to operate and control its vessels; change in the financial stability of clients of the Company; Höegh LNG’s ability to win upcoming

tenders and securing employment for the FSRUs on order; changes in Höegh LNG’s ability to convert LNG carriers to FSRUs including

the cost and time of completing such conversions; changes in Höegh LNG’s ability to complete and deliver projects awarded; increases in

the Company’s cost base; changes in the availability of vessels to purchase; failure by yards to comply with delivery schedules; changes

to vessels’ useful lives; changes in the ability of Höegh LNG to obtain additional financing, in particular, currently, in connection with the

turmoil in financial markets; the success in achieving commercial success for the projects being developed by the Company; changes in

applicable regulations and laws; and unpredictable or unknown factors herein also could have material adverse effects on forward-looking

statements.

Agenda

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Current operations

New projects

Market

Summary

Höegh LNG – a fully integrated floating LNG service provider

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Production Shipping Regasification Distribution Exploration

LNG carriers LNG regasification vessels FLNG

LNG: Liquefied Natural Gas

SRV: Shuttle and Regasification Vessel

FSRU: Floating Storage and Regasification Unit

Own FEED for FLNG design

Pre-feed agreement for an

FLNG at Tamar field in Israel

Principle approval for a FLNG

project in Papua New Guinea

5 carriers in operation

1 carrier to be delivered July

2012 (“LNG Libra”)

Purchase option for 1 carrier

with delivery 2H2013

(“STX Frontier”)

2 FSRUs in operation

3 FSRUs on order

Options for 2 additional FSRUs at firm price and delivery date

Option for 1 additional FSRU at terms to be determined

1 conversion candidate (“LNG Libra”)

Long-term contract coverage secures stable cash flow

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* Based on full opex-pass through and 365 day basis

** Spread between charter in/out

Name Ownership

Capacity

(m3) Built T/C ($/d) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043

Matthew - 126 538 1979 - Ship management ageement with GDF Suez

STX Frontier - 153 600 2010 2 000** Purchase option @ USD 226m (100% basis) or USD 194m (50% basis)

LNG Libra 100 % 126 400 1979 > 80 000 Delivery in July 2012

Norman Lady 50 % 87 600 1973 34 500 Gas Natural

Arctic Lady 50 % 147 208 2006 70 000*

Arctic Princess 34 % 147 208 2006 70 000*

GDF Suez Neptune 50 % 145 130 2009 110 000*

GDF Suez Cape Ann 50 % 145 130 2010 110 000*

New FSRU 1 100 % 170 000 2013 > 125 000 Perusahaan Gas Negara

New FSRU 2 100 % 170 000 2014 N/A Klaipedos Nafta

New FSRU 3 100 % 170 000 2014 N/A Constr.

Repsol

ExtensionLN

G C

arr

iers

Constr.

Option 5+5Constr.

Option 5+5

Option 5+5

GDF Suez

GDF Suez

LN

G R

eg

asific

atio

n V

esse

ls

Total Option 5+5

Statoil Option 5+5N

WS

Agenda

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Current operations

New projects

Market

Summary

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Status for Klaipedos Nafta FSRU

Project on time and on budget

10 year time charter signed, and all subjects lifted, in March 2012

Höegh LNG's scope is the FSRU. Steel cutting for FSRU in September 2012.

Delivery ex-yard in March 2014. Start of operations around October 2014

Klaipedos Nafta will build jetty and pipeline. Pipeline FEED was led by Ardynas and

completed in March 2012. Pipeline award will be in end of August 2012, construction

to start in January 2013 and finish in December 2013. Contract award for jetty will be

in end of August 2012, with construction starting in December 2012

Klaipedos Nafta negotiating LNG supplies

Project financing well under way. DNB appointed as structuring bank, on-going

discussions with commercial banks and ECAs. Financial close in Q3 2012.

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Location of FSRU in the Port of Klaipeda, Lithuania

FSRU

pipeline

Baltic Sea Klaipeda City

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Status for Perusahaan Gas Negara FSRU

20 year lease agreement between PGN and Höegh LNG signed in January 2012

19 March 2012 government decides to move FSRU from Medan to Lampung, Sumatra

26 March 2012 Höegh LNG informed by Perusahaan Gas Negara (PGN)

No change to specifications of FSRU, but change of mooring design

PGN covers all costs and risks associated with change of location

No changes to the agreement and Q1 2014 remains contractual start-up date

Project financing on track. Appointed two lead-banks, BTMU and Standard Chartered,

on-going discussions with commercial banks and ECAs. Complete financing in Q4 2012

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New location of Perusahaan Gas Negara FSRU

New location of

FSRU

Agenda

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Current operations

New projects

Market

Summary

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Source: Höegh LNG

• Price comparison on different fuels displayed in $/MMBTU

• Natural gas (NBP, HH and Japan) is the cheaper alternative to Europe Brent, Diesel No.2 (US Gulf) and

MGO (Rotterdam)

Main driver for new LNG import is the price of gas

LNG demand growth remains very positive

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LNG demand to double from 2010 until

2025

Demand driven by Asia-Pacific region

followed by Europe

Demand increase driven mainly by

additional power generation and the shift

in feedstock from oil, coal and nuclear to

natural gas

Incremental demand post 2016 to be

supplied mainly from Australia and North

America

Source: Wood Mackenzie

LNG supply growth backed by committed liquefaction projects

Australia is the "base load" for new LNG

production post 2015 with approximately 50%

of new liquefaction capacity

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Source: Wood Mackenzie, Fearnley LNG

Country Project Name FID Start-Up MTPA

Algeria Gassi Touil Taken 2013 4.7

Papua New Guinea PNG LNG Taken 2014 6.6

Angola ALNG Taken 2012 5.2

Australia Australia Pacific Taken 2015 4.5+4.5

“ Browse 2013 2018 4.0+4.0

“ Gladstone Taken 2015 7.8+10.0

“ Gorgon Taken 2014 5.0+5.0+5.0

“ Ichtys Field Taken 2016 4.2+4.2

“ Pluto Taken 2012 4.8

“ Prelude Taken 2016 3.5

“ Queensland Curtis Taken 2014 4.25+4.25

“ Weatstone Taken 2015 4.4+4.4

Indonesia Tangguh 3 2012 2015 3.8+3.8

Nigeria Brass 2012 2016 5.0+5.0

“ NLNG 2012 2016 4.7

Papua New Guinea Liquid Niguini 2012 2014 2.0

TOTAL 90-125

Liquefaction capacity (nominal)

0

100

200

300

400

500

600

700

2005 2010 2015 2020 2025

mmtpa

Asia Pacific Europe & Middle East Africa America

North America – Proposed liquefaction projects – "The Upside"

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Source: Cheniere, EIA, Platts, CSUG

APPROVED

Potential US Export Facilities

Name Capacity

MTPA Start-up

Sabine Pass 8+8 2015

Freeport 4,4+4,4+4,4 2015

Cameron 4+4+4 2016

Cove Point 7,8 2016

Jordan Cove 9 2017

Lake Charles 5+5+5 2018

Total 61

This represents 13 % of annual US

gas production - Manageable

Potential Canadian Export Facilities

Name Capacity

MTPA Start-up

Kitimat 10 2015

Douglas Island 2 NA

Prince Rupert

Island 13 NA

Texada Island 3,8 NA

Total 29

This represents 27 % of annual

Canadian gas production - Manageable

Around 30 FSRU regasification projects in pipeline worldwide Dynamic market

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Source: Höegh LNG

Around 30 projects in pipeline

16 projects in Asia/Middle East

6 projects in South America

7 projects in Europe/Africa

HLNG has several bids in process

Existing

Under construction / awarded

Potential

Existing

Under construction / awarded

Potential

Owner Vessels Customers*

Höegh LNG 2+3 GDF Suez, Perusahaan

Gas Negara, Klaipedos

Nafta

Golar LNG 3+3 Petrobras (2), Pertamina,

Dubai Power Authority

Excelerate 8+1 YPF (2), Kuwait Oil

Corporation, Petrobras

* Projects in operation or awarded

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FSRU contract award opportunities

Project Bid submitted Selection Contract Start-up New / Conversion

Indonesia x Q2 2012* Q2 2012* Q3 2013* Conversion

Chile 1 x Q2 2012 Q3 2012 Q4 2014 New

Chile 2 x Q2 2012 Q4 2012 Q3 2015 New

Middle East Q4 2012 Q3 2013 Q2 2015 New

India 1 Q4 2012 Q1 2013 Q4 2014 New

India 2 Q4 2012 Q1 2013 Q4 2014 New

* Indonesia project (Central Java) original schedule delayed, still Q2 decision

Estimated timing of near-term FSRU project awards

Strong LNG transportation market

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Source: Fearnley LNG, Fearnley Fonds, May 2012

Global LNG fleet overview

14 FSRUs in fleet

6 FSRU newbuildings on order plus 2

options to change from LNGC to FSRU

364 LNG vessels in fleet

74 newbuildings on order (20%)

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Type Delivered Newbuildings

on order

Under

conversion Total

LNGC 364 74 - 438

FLNG - 1 - 1

FSRU 14* 6** 1 21

Total 378 81 1 460

LNGC fleet FSRU fleet

* 10 newbuildings and 4 conversions

** In additional to six firm FSRU orders globally, Golar LNG has options to convert two LNGC orders to FSRUs

Source: Wood Mackenzie, LNG Unlimited, Fearnley LNG

Floating LNG production – the next growth segment

Country Location of field Main sponsors Status

Australia Prelude FID achieved – under construction

Cash Maple On-going pre-FEED studies

Sunrise Pending resolution with Timor, under review

Bonaparte On-going pre-FEED studies

Brazil Santos FID likely delayed until or post 2013

Colombia Caribbean coast Service agreement signed

Indonesia Abadi FEED to start end 2012

Israel Tamar On-going pre-FEED studies

Malaysia Sarawak Kanowit FEED completed

Sarawak Rotan On-going pre-FEED studies

Papua New Guinea Gulf FLNG Under review, NEC approval not received

Gulf of Papua Pre-FEED completed, NEC approval received –

gas allocation and final approval in process

Agenda

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Current operations

New projects

Market

Summary

Summary

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Full contract coverage of all existing assets

Firm contracts for two new FSRUs, third

new FSRU currently open

LNG market shows strong sustainable long-

term growth, the main driver is natural gas

for power generation

FSRU market will continue to grow quicker

than the rest of the market

Höegh LNG has a strong competitive

position in a high barrier to entry market

with attractive returns