Wesley Edens: Yes. So the — I mean the — one of the core fundamentals of the business is exactly what you mentioned, which is going to markets that have the dominant fuel is diesel and switching them to natural gas is a sure thing. I mean when we look at the impact in Jamaica, for example, switching from diesel to natural gas on the plant that we first switched back in 2016, total savings to Jamaica life to date are in excess of $2 billion. So it’s a massively positive savings for them and still generates adequate margins for us. The current level of oil prices and thus, the level of diesel that is generated by that in many of these markets, it’s kind of mid-20s price. So you have natural gas prices. Henry Hub right now is around $3.50.
So obviously, from the low to the high, there’s a massive delta between the two. And that’s what really drives the behavior of these markets. When I said earlier that I thought that Puerto Rico and Brazil literally might be the best two markets for us on Earth for what we do in terms of both switching fuel from diesel to natural gas and also building new better efficiency power. It’s without question that these are the two most interesting markets for us because of exactly this phenomenon. We have — in the Puerto Rico portfolio that we manage right now, there’s about 1,000 megawatts of power today that burns diesel versus natural gas. Obviously, that’s a huge savings potential for the Puerto Rican ratepayers to switch to natural gas. And for us, it’s a very, very steady source of new incremental volumes as we like to transfer going forward.
So that’s basically the path of the company. As I said, going from $15 million in operating earnings in the first quarter to $195 million and then double or more as we go forward is just a massive, massive change in the business, and it is entirely driven by these longer duration customer downstream volumes. So it’s a huge, huge moment in time for us. And now you can really start to see it through the financials. Then with the Q4 financials, the Q1 financials, you’ll see the full impact in a number of these markets, both in particular, in Puerto Rico and Brazil, and we expect the growth to continue indefinitely. So it’s a great point in time for us.
Sam Margolin: Okay. I appreciate that. Thanks. And then the follow-up is maybe just a clarification question for Chris or whoever wants to answer it. But you mentioned that FLNG2 term is sort of a nomenclature issue, and these are modular assets, and so the capacity is different across like the names of the reference materials. And so maybe if you could just clarify like what the total capacity would be at the FLNG2, as described in the deck. And then maybe if you would also share like what total invested capital in the FLNG group would be at that completion of the FLNG2? Thank you.
Christopher Guinta: Yes. So first off, each train is 1.4 tons. So we have talked about multiple trains that we are building. Right now, we’re only focusing on the first one being deployed in Altamira offshore, and we are evaluating where we will put additional units. As we’ve discussed previously, we are permitting sites in Mexico offshore, which is the one that’s permitted now for two trains. We are looking to permit for up to two trains at the onshore location. And we’re also permitting two trains at the Louisiana location. So our invested capital is not — I can’t pointed to just any one of those locations. I would say across the module construction and then specifically to the rigs, which are FLNG1’s deployment solution.
The total invested capital is around $2.5 billion, and we’ve disclosed that. So we think that that should give you everything you need in order to think about the total paid in capital for each of these units, and we haven’t broken it out by two, three, four and five in progress payments. But suffice to say, critical equipment has been procured and we have the ability to maintain schedule to be able to put multiple units, both offshore and onshore.
Sam Margolin: Okay. Understood. Thank you very much.
Operator: Our next question or comment comes from the line of Craig Shere with Tuohy Brothers. You may proceed.
Craig Shere: Good morning. Thanks for taking the questions. So first, Wes, you’ve commented a couple of times on the call about how exciting Puerto Rico and Brazil are you now have five fully executed markets, including those Mexico, Jamaica, and Nicaragua. Given the whole system when turned on is maybe 20% capacity utilization. My question is, do you see any need for further downstream project origination elsewhere in the world? Or do these markets have the ability to sustain substantial annual growth for years to come?
Wesley Edens: Short answer, Craig, and it’s good to hear the call is the capacity that we have in these kind of core markets is so much greater than what our current productivity is that we have years of growth organically in each one of these markets. I mean, Brazil, and Andrew could probably speak to this better than I. But Brazil is a country roughly the same size in the United States, about the same population that uses about 5% as much natural gas, right? So the ability for us to access these markets now with these terminals is really extraordinary. I think there are six natural gas terminals in Brazil, two of them are not connected to the pipeline, two of the remaining four are owned by Petrobras and the other two are owned by us.
So it’s a dominant position that we have in that market, same thing in Puerto Rico, where it’s even more the case. So there obviously is still a huge, huge need in the world for cleaner, cheaper power. And I do think that this whole question of energy transition, of course, is a meaningful one. But when you have 600 million Africans that have no power, when the average energy use in East Africa is 3% of the United States, there’s just a massive disconnect between what people need and what they have access to today. And so of course, there will be markets over time, it will actually make sense to us. I’d say, looking forward from 2024 to 2025, my expectation is there not to be any meaningful incremental terminals added other than ones we’ve identified.
So we need to finish the terminal and Nicaragua. There’s been a well-publicized set of funds we’ve had on the terminal we proposed to build in Ireland. Ireland is the only country in the EU that does not have security supply. I think it’s actually madness when you consider what is at stake for that economy or they’re not to be an incremental source of supply. And so — they came out with a ruling that we disagreed with. We just refiled an appeal to it, I think, a couple of days ago, [indiscernible] and we expect that will be heard in due course. And that would be a market that would make a lot of sense for us on many, many levels and more importantly, make a lot of sense for the average people. So we’re a big, big fan of that. But short answer is that with the existing terminals and markets that we have access to right now, we think that there is a massive amount of incremental growth for many years to come simply by executing on it.
And that’s really the focus of the company.
Craig Shere: Thanks. And my second question, I was always very intrigued by the opportunity of FLNG deployment, fast LNG deployment in stranded gas plays. Wonder if you could speak to the sticking points that were in the Pemex negotiations for Lakach and prospects are still outstanding for stranded gas opportunities around the world in coming years?
Wesley Edens: The — a little bit of historical context. The — we owned 50% of the Heli ship that was developed by the Golar guys is deployed off the coast of Africa. So that’s an example of a stranded gas field that’s being produced basically producing LNG today. Their follow-on asset, I think, was begun in 2017 and maybe FID in 2019 and is expected to be deployed in 2024 in the second half. The contrast to that and our activities is actually fairly substantial. I mean we became FID in March of 2021. And we have the unit deployed today with gas in the system that’s being finalized and commissioned before the end of 2023. So fast LNG is not a misnomer. It’s actually the fastest production of a facility like this in the world.
