Golar LNG Limited (NASDAQ:GLNG) Q2 2024 Earnings Call Transcript

Golar LNG Limited (NASDAQ:GLNG) Q2 2024 Earnings Call Transcript August 15, 2024

Operator: Welcome to the Golar LNG Limited Q2 2024 Presentation. After the slide presentation by CEO, Karl Fredrik Staubo and CFO, Eduardo Maranhao, there will be a question-and-answer session. Information on how to ask a question will be provided then. At this time, all participants are in listen-only mode. I will now pass you over to Karl Fredrik Staubo. Karl, please go ahead.

Karl Fredrik Staubo : Thank you, operator, and welcome to Golar’s Second Quarter 2024 Results. My name is Karl Fredrik Staubo, CEO of Golar LNG, and I’m accompanied today by our CFO, Mr. Eduardo Maranhao, to present this quarter’s results. Before we get into the presentation, please note the forward-looking statements on Slide 2. We started Slide 3 and the overview of Golar today. We have two existing FLNG assets, the Hilli, which is the world’s first FLNG with a market-leading operational track record, and the Gimi about to commence a 20-year charter for BP offshore Senegal and Mauritania. We are closing in on ordering our third FLNG, Mark II with an annual liquefaction capacity of 3.5 million tons per annum. The Mark II FLNG will utilize the LNG carrier Fuji as its donor vessel for the FLNG conversion.

Our financial investments include a 23.5% shareholding in Avenir LNG and a fully owned subsidiary Macaw Energies, which is a startup focused on onshore flare-to-LNG liquefaction. We’re encouraged by the development in both of these companies. Avenir is a leading small-scale LNG shipping company and we see favorable supply-demand characteristics of small-scale LNG shipping, translate into strong charter rates with up to five year durations to very solid counterparts. We’re very encouraged on the outlook for this business. On Macaw, we have now deployed the first F2X which is the flare-to-LNG liquefaction unit at the live well in Texas US. Macaw are currently working on tuning the operations to facilitate for fluctuations in the gas composition from the flare gas well.

Other key statistics highlighted on the page includes our market cap currently standing at around $3.5 billion, net debt of just under $600 million, and an EBITDA backlog of around $11 billion inclusive of the Pan American Energy FLNG Contract in Argentina, which we announced in July. Turning to Slide 4, Golar is the world’s largest owner and operator of FLNGs, and the only proven provider of FLNG as a service. Our two existing units are at par with E&I and Petronas in number of units, but market leading measured by liquefaction capacity. Our focus on designing standardized designs that can be redeployed at moderate CapEx have enabled us to construct the units at market-leading construction costs measured by CapEx per ton and obtain market-leading operational track record.

The other existing FLNG players are focused on utilizing their floating units for gas they control or where they target to be the off-taker of the gas for their downstream LNG portfolio. Hence, the only proven provider of FLNG as a service is Golar, and this position allows us to offer gas resource owners a monetization venue whilst maintaining meaningful ownership and exposure to their resources. Turning to Slide 5, we have laid out our growth ambition based on our existing asset base and secured yard slots. We have inbuilt cash generation growth from our existing assets through the startup of Gimi expected to commence commissioning within this quarter and full operations next year. We see further earnings growth from increased capacity utilization on Hilli when redeploying from her existing charter which ends in July 2026 to the announced 20-year charter in Argentina with an estimated startup in Q1 2027.

Once on their 20-year charters, these two existing assets are estimated to generate an aggregate annual EBITDA of approximately $515 million before commodity exposure. On the back of our focused business model, strong balance sheet and demand for our FLNG services, we’re now looking to grow our fleet with a target to more than double our operating FLNG capacity by 2030 to just over 12 million tons per annum. We have secured a yard slot for a Mark II 3.5 mtpa conversion with delivery in 2027 and a further yard option for a second Mark II 3.5 mtpa FLNG with delivery within 2028. We are targeting to order the first of these Mark IIs FLNGs within this quarter. Each Mark II FLNG has a capacity of 3.5 million tonnes or about 180 TBtu per annum. Assuming a tariff in line with the recently announced FLNG project in Argentina, a Mark II could generate an EBITDA of approximately $500 million before commodity exposure.

Hence, based on our existing assets and the identified growth ambitions, Golar may be in a position to generate an annual EBITDA of around $1.5 billion once the expansion program has expanded from 2 to 4 units and the liquefaction capacity has increased from 5 to 12 mtpa. This is all expected to be fully operational within 2030. On Slide 6, we see continued need for further LNG supplied projects to come online. Due to depletion of existing gas fields and strong underlying growth in natural gas and LNG demand, mainly driven by the Far Eastern Europe, incremental gas supply is needed to balance the market. Based on market research, the incremental [supply] (ph) required to meet the forecasted demand has a landed cost of more than $10 per MMBtu, supporting long-term pricing of LNG.

Golar’s FLNG technology enable monetization of stranded or associated gas field that with a significantly lower cash breakeven compared to the majority of these incremental LNG gas export projects. The spread between where we can generate gas exports and other incremental supply provides for an attractive price spread to be shared between gas resource owners and Golar as the FLNG provider. Forward pricing of LNG still supports oil to gas substitution in addition to the favorable environmental savings. We see this market balance as a very supportive to our mentioned growth ambitions. Turning to business updates at Slide 8. Hilli continued her market leading operational track record during the quarter and is currently in the midst of offloading cargo 117 or more than 8 million tons of LNG exports since contract startup in 2018.

A key milestone for the quarter was to conclude a commercial reset with BP, resolving all contract disagreements and aligning economic compensation from Gimi’s arrival in country on January 10th until COD. This commercial reset also unlocks our target to refinance Gimi at improved terms versus the existing facility and to provide the liquidity release that we intend to utilize for our mentioned FLNG growth ambitions. Significant progress has been made on Mark II during the quarter and we’re now targeting contracting within the quarter as mentioned. And we’ve also secured the slot for the option. The key milestone of the quarter was signing a 20-year definitive agreement for deployment of an FLNG in Argentina. The contract envisaged to utilize Hilli at the end of our current charter, but Golar has for a period pre-final investment decision an option to swap the vessel with a Mark II FLNG.

We will elaborate on this later in the presentation. We see continued strong development of our FLNG growth pipeline and we’ve increased our FLNG commercial team with two senior resources to assist in evaluating and developing project opportunities. We’re currently in discussion for FLNG deployment opportunities in West Africa, South America, Middle East and Southeast Asia. Q2 financial highlights include an adjusted EBITDA for the quarter of $59 million and a liquidity position of just around $600 million. Eduardo will provide further insight into this quarter’s financial performance later in the presentation. Turning to Slide 9, we’ve laid out some of the contract highlights on the Pan American FLNG charter in Argentina. We have entered into agreements for a 20-year LNG export project in Argentina.

The project, as explained several times now, intends to utilize Hilli. However, we have swapping rights to instead utilize a Mark II FLNG before final FID is made which is expected to occur later this year. The annual adjusted EBITDA based on utilization of the Hilli is approximately $300 million before commodity exposure. The project will utilize gas from the Vaca Muerta field onshore Argentina. Vaca Muerta is the second largest shale gas discovery in the world with estimated resources of around 300 TCF. Target’s startup of the project is in Q1 ‘27 enabling potential redeployment, upgrades and hookup of Hilli after the end of her current charter in July 2026. As part of the transaction, Golar will become a 10% shareholder in South American logistics.

This will provide further commodity exposure in addition to the commodity element of the FLNG tariff. The charter is subject to customary closing condition, including regulatory and environmental approvals. As alluded to, this is expected to be satisfied within year-end. Further information on the project can be found on Slide 10. Site selection for the FLNG has been selected as San Matias gulf in the Rio Negro province in Argentina. The project intends to utilize spare capacity in the existing pipeline system and therefore requires very limited incremental infrastructure to be operational. However, the project aims to secure a dedicated pipeline of about 600 kilometers in order to expand beyond one FLNG units. The counterpart of the agreements are Pan American Energy, one of South America’s leading energy companies.

Pan American is owned 50% by BP and 50% by Bridas Energy Corp., which in turn is a 50-50 joint venture between CNOOC of China and Bridas Energy, which is an Argentinian holding company on behalf of an Argentinian family. Pan American employs around 21,000 employees. They are Argentina’s second largest oil and gas producer. And at year-end, the company — year-end ’23, the company controlled total assets of around $17 billion, with book equity of around $12 billion. We’re extremely pleased with the mutual benefits the project enables, both to Pan American as a gas resource owner and reestablishing Argentina as a gas exporter, creating an outlet for the vast resources of the Vaca Muerta field to benefit global gas demand. Turning to Slide 11.

We continue to see strong developments for further FLNG deployments, already as mentioned, further potential deployments in Argentina but also elsewhere. We are currently in discussion for potential deployment opportunities in West Africa, South America, Middle East and Southeast Asia, and these projects are at various stages of development. We continue to develop projects in Nigeria. And in June, we signed a project development agreement with NNPC to further expand on the existing agreements between Golar and NNPC. As mentioned, we have recently further strengthened our commercial team with two senior resources to assist in the development of these growth projects. We remain encouraged by the relative attractiveness of our FLNG growth projects, both when comparing them to alternative monetization solutions for the gas resource owners and the cost competitiveness for this project versus other LNG export projects.

Turning to Slide 12 to give some further detail on the commercial reset agreement reached with BP. The commercial reset resolves all previous disputes related to payment mechanisms for pre-COD contractual cash flows between Golar and BP. Golar is now contractually entitled to receive daily payments from January 10 this year until commercial operations date. The daily payments have step-up mechanisms based on project milestones up to COD and are also secured by long-stop dates. Golar will also be entitled to certain lump sum bonus payments, subject to achievement of certain project milestones. In sum, these new arrangements and based on the operator’s latest timeline, Golar expects to receive approximately $220 million in payments across 2024 and 2025 pre-COD compensation inclusive of milestone bonuses, of which approximately $130 million will be invoiced in 2024 and the remainder in 2025.

The $110 million that Golar has paid BP up until January 10 this year in liquidated damages will remain with BP. In addition, an accelerated commissioning plan has been agreed where the operators, BP and Kosmos, have procured an LNG cargo expected to deliver to the hub later this month. The commissioning cargo enable parallel commissioning activities of both the hub FPSO and the Gimi FLNG. Together, this will shorten — or target to shorten the time to COD. The commercial reset is also an important milestone that enables refinancing of Gimi. We are targeting a debt facility with significantly better terms on interest and amortization compared to the existing facility and rightsized for the strong cash flow visibility of the project, and we expect to release up to $500 million of liquidity for this refinancing alone.

Turning to Slide 13, an operational overview of our two existing assets. As explained, Hilli continued its market-leading operational track record, and we are now offloading cargo number 117. The existing contract runs until July 2026, and the vessel is thereafter intended to be moved to Pan American and the contract in Argentina at an increased capacity utilization. Gimi is on site on the hub offshore Senegal and Mauritania and preparing to start commissioning activities to the mentioned accelerated commissioning plan later this month. First, gas from the FPSO is expected in Q4 and full COD in 2025. The COD will start a 20-year contract duration, unlocking Golar’s share of the $3 billion EBITDA backlog. Turning to Slide 14 and our Mark II growth plans.

We are now in the final stages of the yard EPC contracts. Confirmed delivery of the first contemplated Mark II FLNG will be within 2027 at an all-in FLNG price at an industry-leading $600 million per tonne. We have spent to-date, including the acquisition of the intended donor vessel, Fuji LNG, around $277 million on the project which are all equity funded. The long lead items ordered to-date are now 63% complete, and you can see some of those examples on the bottom right of the slide. We target to order the first Mark II within Q3 this year, so this quarter and as part of the yard agreements, we’ve secured an option for a second ship with delivery within 2028. On Slide 15, we turn again to Macaw. Our pilot unit was completed in early Q2 this year.

The unit has proven that the technology works, both through nitrogen leak testing and proven LNG production from pipeline quality gas entering new facility near its construction factory. The unit has now been deployed to a live well in Texas, US. We are currently working on tuning the operations to facilitate for fluctuation in the gas composition from flare gas, which is obviously different to a stable gas quality stream from a pipeline quality gas [inlet] (ph). As previously announced, we will consider strategic alternatives for the Macaw growth phase once the unit has proven stable operations on live well production. I will now hand the call over to Eduardo to present our Q2 results.

Eduardo Maranhao: Good morning, everyone, and thanks, Karl. Very happy to share an overview on Golar’s financial performance during Q2 2024. Turning over to Slide 17, I wanted to go through some of the highlights of this quarter. Total operating revenues amounted to $65 million, with total FLNG tariffs reaching $88 million, up from $86 million recorded in Q1. This increase can be attributed to higher realized Brent and TTF-linked earnings when compared to the previous quarter. We always look at FLNG tariff, as the appropriate metric which reflects all realized liquefaction revenues, including gains on our oil and gas linked fees from Hilli. We reported total net income of $35 million in Q1. When adjusting for other non-controlling interest, the net income attributable to Golar was $26 million.

This figure represents a significant improvement on a year-on-year basis when compared to Q2 2023. Adjusted EBITDA came in at $59 million, slightly down when compared to last quarter, mainly because of the recognition of preoperational expenses associated to pre-commissioning activities of FLNG Gimi. Our liquidity position remains strong, with approximately $630 million of cash on hand and expected receivables from our TTF hedges. Based on that, our net debt position at quarter end stood at $569 million. As alluded by Karl, we reached a significant milestone with BP, with the execution of the commercial reset for our FLNG Gimi. We are now able to refinance our existing debt facility of $700 million, out of which only $630 million has been drawn to-date.

We are in advanced discussions with potential lenders, and a new facility is now in the credit approval process. This potential new facility offers improved terms with lower financing costs and improved repayment profile versus the current one. We expect to release up to $500 million of additional liquidity net to us upon closing of this new facility. And lastly, this quarter we are declaring a dividend of $0.25 a share, with a record date on the 26th of August and payments on or around the 3rd of September. Now moving to Slide 18. So Hilli maintained 100% economic uptime in its market-leading operational track record. Here, we can see the evolution of Hilli’s EBITDA contribution over the last quarters. We’re looking on a quarterly basis. Hilli generated $64 million in Q2.

This number is inclusive of $29 million from base tolling fees and around $35 million from Brent and TTF-linked fees. We have recently seen higher Brent and TTF prices, so it’s important to reiterate that we continue to be exposed to Brent and TTF. So should prices continue to improve in the coming quarters, we should expect increased distributions from Hilli until the end of its current contract. Moving on to Slide 19. So based on current forward prices, Hilli is expected to generate an adjusted EBITDA net to us of approximately $275 million this year. I wanted to highlight that this figure is higher than the amount seen in 2022, when we had higher contribution from Brent and TTF because of higher global energy prices. The 2024 asset-level debt service including principal amortization is expected to come down to $88 million this year, resulting in total free cash flow net to Golar of approximately $190 million in 2024.

At the end of Q2, the total debt outstanding for Hilli stood at $577 million. Another great feature from the announcement of our contract with Pan American is that it could also enable refinancing of this existing facility which could release significant liquidity to us and provide even more flexibility to our balance sheet. Let me now hand the call over to Karl for some closing remarks.

Karl Fredrik Staubo: Thanks, Eduardo. That brings us to Slide 21, which is a summary and next steps. So on Hilli, we maintained a market-leading operational track record, and we are very pleased to have entered into definitive agreements for a 20-year redeployment in Argentina starting at the end of the existing charter. On Gimi, another milestone in concluding the new pre-COD commercial arrangements and accelerated commissioning. Our focus now is to get the unit into COD and to refinance the existing debt facility at improved terms. As explained, we are entering or closing in on ordering our third unit the first Mark II FLNG conversion expected to be ordered later this quarter with delivery within 2027. We’re also pleased with the development of our FLNG growth ambitions, and we see strong prospective client interest for additional FLNG projects.

As explained by Eduardo, we have a very healthy financial performance and a balance sheet to support our growth ambitions, with a liquidity of just around $600 million, continued focus on shareholder returns and strong cash flow generation potential in new FLNG contracts. All in all, we are very pleased with the progress made in the quarter, in particular on our existing assets, business development and interaction with both existing and prospective FLNG clients. We’re excited about the next phase of the company development and our focused growth ambitions to more than double our FLNG capacity by 2030. That concludes the quarterly presentation and we’ll now hand the call over to the operator for any questions.

Q&A Session

Operator: Thank you. [Operator Instructions] We will now take the first question from the line of Chris Robertson from Deutsche Bank. Please go ahead.

Chris Robertson: Good morning Karl and Eduardo. Thanks for taking my questions. Karl, I just wanted to circle back on your comments around the potential swap option for Mark II in Argentina. Should we think about the expected annual EBITDA contribution then on a pro forma basis for a larger asset of being over $400 million if you decide to do that?

Karl Fredrik Staubo: Yes. That would then be pro rata for the size, yes.

Chris Robertson: Okay. Got it. And then just with regards to the conversations you are having. You’ve obviously laid out several regions which you’re looking at now including South America, Africa, Middle East and Southeast Asia. Could you give us an idea of just how many potential counterparties you are in discussions with? I mean, the regions helped, but maybe the scope of discussions that you’re having?

Karl Fredrik Staubo: I think it is fair to say that the number of counterparts is still concentrated around both West Africa and South America. There are fewer number of clients both on the Middle East and the Southeast Asia opportunities. But we are still very happy with the quality of those discussions that we are having there in both those locations. But the concentration of magnitude is West Africa and South America.

Chris Robertson: Got it. I’ll turn it over. Thank you.

Karl Fredrik Staubo : Thank you.

Operator: We will now take the next question from the line of Ben Nolan from Stifel. Please go ahead.

Ben Nolan:

.:

Karl Fredrik Staubo: That’s a good question. So first and foremost, gas resources are plentiful. Like if you compare this to what’s deemed to be very large gas discoveries for example, like the Greater Tortue area where Gimi operates, that’s a 25 TCF reservoir. Vaca Muerta is 300 TCF. So there is more than sufficient gas, it is onshore and it’s relatively easy to extract. Hence, the market opportunity for Argentinian gas exports is massive, probably beyond what just Golar can deliver anyway. We think that the attractiveness of what we can deliver is certainty of supply through a proven assets and with very tangible delivery. We know when Hilli comes off contract. And if we do place the order for Mark II within this quarter, we do know when we have delivery of that vessel, and that’s further derisked by the progress made on the long lead items for that asset.

So we see as our role to be the first enabler for Argentina or Vaca Muerta specifically, gas exports. The gas is plentiful. And the only, call it the key thing you need to cross is to have a designated pipeline in order to bring the gas to the export side. The existing infrastructure supports at least one FLNG, in order to go beyond that, you need to expand the existing pipeline system.

Ben Nolan: Okay. And would you need — hopefully, I can get one more. But would you need a bigger pipeline for Mark II versus the Hilli? Or would either — the existing infrastructure work for either?

Karl Fredrik Staubo: That’s why we have substitution right on the first one. So on the first one, you could utilize either Hilli or Mark II. If you go beyond one unit i.e., beyond 3.5 mtpa, you need to look into the pipeline infrastructure.

Ben Nolan: Got it. So my second question as it relates to sort of all of the other opportunities, obviously, Argentina, there is potential for multiple units. But as you are thinking about sort of the opportunity set elsewhere, appreciating that it is diverse. But can you maybe talk through how many of those you think are like single unit kind of situations? Or do you see a lot of situations where there potentially could be multiple units and that would be needed?

Karl Fredrik Staubo: I think if you map out where stranded gas is in the world, it is extremely plentiful, but where it’s most obvious is in West Africa. You have very, very large resources of stranded gas sitting in the ground, that could be developed significantly cheaper than for example, incremental US LNG export projects. The shipping distance to end markets, both in Europe and the Far East is shorter, and we believe we can construct FLNG units at the CapEx per tonne at around half the price of where you can create incremental tonne on CapEx per tonne in the US. The competitive advantage of these projects is very significant. The gas is proven and plentiful. So that’s where you see the biggest opportunity. And obviously, in addition to areas like the Middle East, they have more than enough gas, and the same is true for certain pockets of South America.

But it is basically South America, West Africa and to some extent, Middle East, that could see multiple units. The Southeast Asian opportunities is one unit initially.

Ben Nolan: Right. Okay, thank you.

Operator: Thank you. We will now take the next question from the line of Craig Shere from Tuohy Brothers. Please go ahead.

Craig Shere: Good morning. And thanks for taking my questions. So how quickly could you secure a Hilli refinancing? Could that be a first half 2025 event?

Karl Fredrik Staubo: That can certainly be a 2025 event, yes. So I think once all of the subjects and FID on the project is taken which we explained is expected later this year, it would be natural to look at refinancing initiatives into next year, yes.

Craig Shere: Great. And do you have a second Mark II sold for conversion identified? And when would you have to issue FID for a second Mark II to meet that 2028 delivery?

Karl Fredrik Staubo: Yes, there are plenty of so-called Moss design ships that you can acquire in the market today that are operating as LNG carriers today. And we have identified several vessels that could be suitable candidates. And some of them, we have previously also inspected. FID, if we were to go on the second Mark II, would have to be based on current positions unless we manage to improve them around — within Q1 ’25.

Craig Shere: Thank you.

Operator: Thank you. We will now take the next question from the line of Liam Burke from B. Riley Financial. Please go ahead.

Liam Burke: Yes, thank you. Good morning Karl, good morning Eduardo.

Karl Fredrik Staubo: Good morning.

Eduardo Maranhao: Good morning.

Liam Burke: Karl, we saw the addition of a new fortress to the FLNG providers. Obviously, it’s smaller capacity, it is for internal consumption. But are you seeing any other — understanding these are tough projects to do, but the economics are pretty attractive. Are you seeing anybody else stepping up and trying to provide FLNG as a service?

Karl Fredrik Staubo: So there is one project that has FID out of Samsung now, which is called Cedar LNG, which is backed by Pembina for an LNG export in Canada. So they’re doing that, but they are doing it against locked-in offtake. It’s a quite — I think it’s been 15 years in the making, that project. It used – it is former Golar employees that does it, and it was a project that initially was started under Golar. Other than that, we do see people having initiatives, but we haven’t seen yet other contenders that have the in-house engineering or operational or financial balance sheet capability to lift such projects, no.

Liam Burke: Great. Thank you. And on your outside investments, how are you balancing future FLNG projects? Now potentially, you have two more on the books versus some of your outside projects like Macaw and Avenir.

Karl Fredrik Staubo: So if you look at Golar over the course of the last three years, basically after Eduardo and myself came in, we’ve tried to streamline the companies from a diversified fleet portfolio to a very focused FLNG company. Avenir LNG is one legacy investment that we haven’t disposed for a number of reasons, but it was an investment made when we owned Golar Power. We like the supply/demand dynamics. We have invested around $50 million. And right now, it is an investment that we have strong belief in and therefore want to keep. We are not planning to deploy incremental capital into it, but we do want to reap the benefits of the investment. When it comes to Macaw. Macaw, the way we see it is a replication of what we are doing in the maritime environment at a smaller scale onshore.

But the whole trick is that you capture flare gas that would otherwise be burned into the atmosphere. So i.e., the cost is extremely low of the input, and there is significant environmental benefit of if you managed to crack this solution. So on Macaw, what we’re trying to do is to leverage on the technological capabilities of the Golar organization to utilize the same or to capture the same market opportunity that we do at large scale in the maritime environment at smaller scale onshore. However, there should be no confusion that Golar’s focus is to grow on FLNG, and that is our focus, and we are not planning to divert any significant capital elsewhere.

Liam Burke: Great. Thank you Karl.

Operator: Thank you. We will now take the next question from the line of Alexander Bidwell from Webber Research & Advisory. Please go ahead.

Alexander Bidwell: Thanks for taking my question here. Just jumping back to Argentina. With the project requiring minimal infrastructure investment, could you provide a little more color on what infrastructure is actually required? Are we talking mostly offshore mooring or an offshore jetty subsea infrastructure? And then how much of this infrastructure would be specific to the asset that’s deployed, so either Hilli or Mark II?

Karl Fredrik Staubo: The key things that is required is, as you correctly point out, mooring, mooring is covered by South American Logistics, and a short pipeline from the existing grid to sites and the site selection.

Alexander Bidwell: Right. Thank you. And a quick follow-up. For Mark II and that swap option in Argentina, I thought I heard you say that the swap had to be executed before FID. Is that correct?

Karl Fredrik Staubo: Yes.

Alexander Bidwell: Okay, thank you very much.

Karl Fredrik Staubo : Thank you.

Operator: Thank you. We will now take the next question from the line of Chris Robertson from Deutsche Bank.

Chris Robertson: Hi, guys. Thanks for taking the follow-up question from me. I just wanted to return to Macaw for a moment here. And Karl, you mentioned about not being confused with the focus on FLNG. So with regards to Macaw, is there any potential that you could license out the technology given that you have patent control over it rather than taking — doing the undertaking yourself?

Karl Fredrik Staubo: Sure. So what we’ve said quite clearly since we initiated Macaw is that we want to fund it through proof-of-concept. Once proof-of-concept is achieved, hopefully in the relatively near term, our ambition then is to look at strategic alternatives for the growth phase. Golar is not intending to have Macaw fight for our balance sheet resources. And therefore we are looking at any type of structure that could benefit the technology that has been created at Macaw without compromising any of our FLNG growth ambitions.

Chris Robertson: Got it. That’s really clear. Thank you Karl.

Operator: Thank you. I would now like to turn the conference back to Karl Fredrik Staubo for closing remarks.

Karl Fredrik Staubo: Thank you all for dialing in. We are very excited about the quarter that just passed and the direction of where the company is going, and we look forward to talk to you again next quarter. And hopefully, we’re then engaged on our FLNG growth phase. Thanks again and have a good day.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.