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

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

2 Forward looking statements 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. 2

3 Agenda Current operations New projects Market Summary 3

4 Höegh LNG a fully integrated floating LNG service provider Exploration Production Shipping Regasification Distribution FLNG LNG carriers LNG regasification vessels 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 ) 4 LNG: Liquefied Natural Gas SRV: Shuttle and Regasification Vessel FSRU: Floating Storage and Regasification Unit

5 LNG Regasification Vessels LNG Carriers NWS Long-term contract coverage secures stable cash flow Name Ownership Capacity (m 3 ) Built T/C ($/d) Matthew Ship management ageement with GDF Suez STX Frontier ** Repsol Purchase USD 226m (100% basis) or USD 194m (50% basis) LNG Libra 100 % > Delivery in July 2012 Norman Lady 50 % Gas Natural Extension Arctic Lady 50 % * Total Option 5+5 Arctic Princess 34 % * Statoil Option 5+5 GDF Suez Neptune 50 % * GDF Suez Option 5+5 GDF Suez Cape Ann 50 % * GDF Suez Option 5+5 New FSRU % > Constr. Perusahaan Gas Negara Option 5+5 New FSRU % N/A Constr. Klaipedos Nafta New FSRU % N/A Constr. 5 * Based on full opex-pass through and 365 day basis ** Spread between charter in/out

6 Agenda Current operations New projects Market Summary 6

7 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 Delivery ex-yard in March Start of operations around October 2014 Klaipedos Nafta will build jetty and pipeline. Pipeline FEED was led by Ardynas and completed in March Pipeline award will be in end of August 2012, construction to start in January 2013 and finish in December 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 Q

8 Location of FSRU in the Port of Klaipeda, Lithuania Baltic Sea Klaipeda City FSRU pipeline 8

9 Status for Perusahaan Gas Negara FSRU 20 year lease agreement between PGN and Höegh LNG signed in January 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 Q 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 Q

10 New location of Perusahaan Gas Negara FSRU New location of FSRU 10

11 Agenda Current operations New projects Market Summary 11

12 Main driver for new LNG import is the price of gas 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) 12 Source: Höegh LNG

13 LNG demand growth remains very positive 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 13

14 LNG supply growth backed by committed liquefaction projects Liquefaction capacity (nominal) Country Project Name FID Start-Up MTPA mmtpa Asia Pacific Europe & Middle East Africa America Australia is the "base load" for new LNG production post 2015 with approximately 50% of new liquefaction capacity Algeria Gassi Touil Taken Papua New Guinea PNG LNG Taken Angola ALNG Taken Australia Australia Pacific Taken Browse Gladstone Taken Gorgon Taken Ichtys Field Taken Pluto Taken Prelude Taken Queensland Curtis Taken Weatstone Taken Indonesia Tangguh Nigeria Brass NLNG Papua New Guinea Liquid Niguini TOTAL Source: Wood Mackenzie, Fearnley LNG

15 North America Proposed liquefaction projects "The Upside" Potential US Export Facilities Name Capacity MTPA Start-up Sabine Pass Freeport 4,4+4,4+4, Cameron Cove Point 7, Jordan Cove Lake Charles Total 61 This represents 13 % of annual US gas production - Manageable Potential Canadian Export Facilities Name Capacity MTPA Start-up Kitimat Douglas Island 2 NA APPROVED Prince Rupert Island 13 NA Texada Island 3,8 NA Total 29 This represents 27 % of annual Canadian gas production - Manageable 15 Source: Cheniere, EIA, Platts, CSUG

16 Around 30 FSRU regasification projects in pipeline worldwide Dynamic market 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 Around 30 projects in pipeline 16 projects in Asia/Middle East Existing Under construction / awarded Potential 6 projects in South America 7 projects in Europe/Africa HLNG has several bids in process 16 Source: Höegh LNG

17 FSRU contract award opportunities Estimated timing of near-term FSRU project awards Project Bid submitted Selection Contract Start-up New / Conversion Indonesia x Q2 2012* Q2 2012* Q3 2013* Conversion Chile 1 x Q Q Q New Chile 2 x Q Q Q New Middle East Q Q Q New India 1 Q Q Q New India 2 Q Q Q New * Indonesia project (Central Java) original schedule delayed, still Q2 decision 17

18 Strong LNG transportation market 18 Source: Fearnley LNG, Fearnley Fonds, May 2012

19 Global LNG fleet overview Type Delivered Newbuildings on order Under conversion Total LNGC FLNG FSRU 14* 6** 1 21 Total * 10 newbuildings and 4 conversions ** In additional to six firm FSRU orders globally, Golar LNG has options to convert two LNGC orders to FSRUs LNGC fleet 364 LNG vessels in fleet 74 newbuildings on order (20%) 14 FSRUs in fleet FSRU fleet 6 FSRU newbuildings on order plus 2 options to change from LNGC to FSRU Source: Wood Mackenzie, LNG Unlimited, Fearnley LNG 19

20 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

21 Agenda Current operations New projects Market Summary 21

22 Summary Full contract coverage of all existing assets Firm contracts for two new FSRUs, third new FSRU currently open LNG market shows strong sustainable longterm 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 22