Q2 2024 Golar LNG Ltd Earnings Call
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Welcome to the GOLAR LNG Limited Q2 2024 presentation.
Speaker Change: After the slide presentation by CEO Carl Friedrich Staubo and CFO Eduardo Maranhao
Speaker Change: There will be a question and answer session.
Speaker Change: 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 Carl Friedrich Staubo. Carl, please go ahead.
Speaker Change: Thank you, operator, and welcome to Golar's second quarter 2024 results.
Speaker Change: My name is Carl Frederik Staubo, CEO of Goal RLNG and I'm accompanied today by our CFO, Mr. Eduardo Maranhao, to present this quarter's results.
Speaker Change: Before we get into the presentation, please note the forward-looking statements on slide two.
Speaker Change: We start at slide three and the overview of GOLAR today.
Speaker Change: We have two existing FLNG assets, the Hilli, which is the world's first FLNG with a market-leading operational track record.
Speaker Change: and the GIMME about to commence a 20-year charter for BP offshore Senegal and Mauritania.
Speaker Change: We are closing in on ordering our third FLNG, a Mark II with an annual liquefaction capacity of 3.5 million tons per annum.
Speaker Change: The MkII FLNG will utilize the LNG carrier Fuji as its donor vessel for the FLNG conversion.
Speaker Change: Our financial investments include a 23.5% shareholding in Avenir LNG and a fully-owned subsidiary Macau Energies.
Speaker Change: which is a startup focused on onshore flare to LNG liquefaction.
Speaker Change: 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.
Speaker Change: We're very encouraged on the outlook for this business.
Speaker Change: On Macau, we have now deployed the first F2X, which is the FLIR 2 LNG liquefaction unit, at the Loi Well in Texas, US.
Speaker Change: Macau are currently working on tuning the operations to facilitate for fluctuations in the gas composition from the flare gas well.
Speaker Change: Other key statistics highlighted on the page includes our market cap, currently standing at around $3.5 billion.
Speaker Change: net debt of just under 600 million and an EBITDA backlog of around 11 billion dollars, inclusive of the Pan American Energy contract in Argentina, which we announced in July.
Speaker Change: 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.
Speaker Change: Our two existing units are at par with E&I and Petronas in number of units, but market leading measured by liquefaction capacity.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Turning to slide 5, we have laid out our growth ambition based on our existing asset base and secured yard slots.
Speaker Change: We have secured a yard slot for a march to three five MTP a conversion with delivery in 2027 and the further out option for a second mark to $3 five M. T. P. A F O N D with delivery within 2028.
Speaker Change: We are targeting to order the first of these mark juice Lng's within this quarter.
Speaker Change: Each mark cheer for Lindsay has a capacity of $3 5 million tons or about 180 T btu per annum.
Speaker Change: Assuming a tariff in line with the recently announced Apple N G project in Argentina.
Speaker Change: And Mark he could mark too should generate an EBITA of approximately $500 million before commodity exposure.
Speaker Change: 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 two to four units and the liquefaction capacity has increased from five to 12 M. Tpa.
Speaker Change: This is all expected to be fully operational within 2030.
Speaker Change: On slide six we see continued need for further LNG supplied projects to come online.
Speaker Change: Due to depletion of existing gas fields, and strong underlying growth in natural gas and LNG demand, mainly driven by the far eastern Europe.
Speaker Change: Incremental gas supply is needed to balance the market.
Speaker Change: Based on market research. The Incrementals are required to meet the forecasted demand has a landed cost of more than $10 per M. Btu supporting long term pricing of LNG.
Speaker Change: Golar LNG technology enable monetization of stranded or associated gas field that'd be the significantly lower cash breakeven compared to the majority of these incremental LNG gas export projects.
Speaker Change: The spread between where we can generate a gas exports and other incremental supply provides for an attractive price spreads to be shared between gas resource owners and Golar SDF LNG provider.
Speaker Change: Forward pricing of LNG still supports oil to gas substitution. In addition to the favorable environmental savings.
Speaker Change: We see this market balance as a very supportive to our mentioned growth ambitions.
Speaker Change: Yeah.
Speaker Change: Turning to business updates at slide eight.
Speaker Change: Chile continue their 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.
Speaker Change: A key milestone for the quarter was to conclude a commercial reset with BP resolving all contract disagreements and aligning economic compensation from give me his arrival in country on January 10th until theory.
Speaker Change: This commercial reset also unlocks our targets to refinance give me at improved terms versus the existing facility and to provide the liquidity relief that we intend to utilize for our mentioned F. A N G growth ambitions.
Speaker Change: Significant progress has been made on mark to during the quarter and we're now targeting contracting within the quarter as mentioned.
And we've also secured a slot for the option.
Speaker Change: The key milestone of the quarter was signing a 'twenty are definitive agreement for deployment of Nf L. M D in Argentina.
Speaker Change: The contract envisaged to euthanize.
Speaker Change: At the end of her current charter, but Golar has for a period pre final investment decision and option to swap the vessel with a mark to F O N E.
Speaker Change: We will elaborate on this later in the presentation.
Speaker Change: We see continued strong development of RF LNG growth pipeline and we've increased our effort in the commercial team with two senior resources to assist in evaluating and developing project opportunities.
Speaker Change: We're currently in discussion for ethylene redeployment opportunities in West Africa South.
Speaker Change: South America, Middle East and Southeast Asia.
Speaker Change: Q2 financial highlights include an adjusted EBITA for the quarter of 59 million and the liquidity position of just around $600 million.
Speaker Change: At BARDA will provide further insight into this quarter's financial performance later in the presentation.
Speaker Change: Turning to slide nine we've laid out some of the contract highlights on the Pan American.
Speaker Change: <unk> charter in Argentina.
Speaker Change: We have entered into agreements for 'twenty are LNG export project in Argentina The project.
Speaker Change: Explained several times now intends to utilize Hilli. However, we have swapping rights to instead utilize a mark to F. LNG before final F. I D is made which is expected to occur later this year.
Speaker Change: The annual adjusted EBITDA based on utilization of the Hilli is approximately 300 million before commodity exposure.
Speaker Change: The project will utilize gas from the Vaca <unk> field onshore Argentina.
Speaker Change: Welcome Martin is the second largest shale gas discovery in the world with estimated resources of around 300 Tcf.
Speaker Change: Target startup of the project is in Q1, 'twenty, seven enabling potential redeployments upgrades and hookup of Hilli.
After her at the end of her current charter in July 26.
Speaker Change: As part of the transaction Golar will become a 10% shareholder in South American logistics.
Speaker Change: This will provide further commodity exposure in addition to the commodity elements of the <unk> tariffs.
Speaker Change: The charter is subject to customary closing conditions, including regulatory and environmental approvals.
Speaker Change: As alluded to this is expected to be satisfied within Aaron's.
Speaker Change: Yeah.
Speaker Change: Further information on the project can be found on slide 10.
Speaker Change: Site selection for the F. O N D has been selected us somewhat years golf and the Rio <expletive> Province in Argentina.
Speaker Change: The project intends to utilize spare capacity in the existing pipeline system, and therefore requires very limited incremental infrastructure to be operational.
Speaker Change: However, the project aims to secure a dedicated pipeline of about 600 kilometers in order to expand beyond walnuts LNG units.
Speaker Change: The counterpart to the agreements are Pan American energy, one of South America's leading energy companies.
Speaker Change: Pan American is owned 50% by BP and 50% by breed US Energy Corp, which in turn is a 50 50 joint venture between <unk> of China, and breeders energy, which is an Argentinian holding company on behalf of an Argentinian summary.
Speaker Change: Pan American employs around 21000 employees, there Argentina's second largest oil and gas producer and at year end. The company year end 'twenty three the company controlled total assets of around 17 billion with book equity of around 12 billion.
Speaker Change: We're extremely pleased with the mutual benefits the project enables us both to Pan American has a gas resource owner.
Speaker Change: And reestablishing, Argentina, as a gas exporter, creating an outlet for the vast resources of the Vaca <unk> field to benefit global gas demand.
Speaker Change: Turning to slide 11, we continue to see strong developments for further LNG deployments already has mentioned for their potential deployments in Argentina, but also elsewhere.
Speaker Change: We're 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.
Speaker Change: We continue to develop projects in Nigeria and in June we signed a project development agreement with an entity.
Speaker Change: To further expand on the existing agreements between Golar and empathy.
Speaker Change: As mentioned, we have recently further strengthened our commercial team with two senior resources to assist in the development of these growth projects.
Speaker Change: We remain encouraged by the relative attractiveness of our LNG growth projects, both when comparing them to alternative monetization solutions for the gas resource owners.
Speaker Change: And the cost competitiveness for these projects versus other LNG export projects.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Turning to slide 12 to give some further detail on the commercial reset the agreement reached with BP.
Speaker Change: The commercial reset resolves all previous disputes related to payment mechanisms for pre CODI contractual cash flows between Golar MBP.
Speaker Change: Golar is now contractually entitled to receive daily payments from January 10th this year until commercial operations dates.
Speaker Change: The daily payments have step-up mechanisms based on project milestones up to C. O D and are also secured by long stop dates.
Speaker Change: Golar will also be entitled to certain lump sum bonus payments subject to achievement of certain project milestones.
Speaker Change: In sum these new arrangements.
Speaker Change: And based on the operator's latest timeline golar expects to receive approximately $220 million in payments across 2024 and 2025.
Speaker Change: The compensation inclusive of milestone bonuses.
Speaker Change: Of which approximately 130 million will be invoiced in 2024, and the remainder in 2025.
Speaker Change: The $110 million dollars that Golar has paid BP up until January 10th of this year in liquidated damages will remain with BP.
Speaker Change: In addition, an accelerated commissioning plan has been agreed where the operators BP and cosmos have procured in LNG cargo expected to deliver to the hub later this month.
Speaker Change: The commissioning cargo enabled parallel commissioning activities of both the hub F. P. S O and the give me F O N E.
Speaker Change: Together this will shorten our target to shorten the time to C O D.
Speaker Change: The commercial reset is also an important milestone that enables refinancing of gaming.
Speaker Change: We are targeting a debt facility with significantly better terms on interest and amortization compared to the existing facility.
Speaker Change: And right sized for the strong cash flow visibility of the project and we expect to release up to $500 million of liquidity of this refinancing alone.
Speaker Change: Turning to slide 13, and an operational overview of our two existing assets.
Speaker Change: As explained Healy continued its market, leading operational track record and we're now offloading cargo number 117.
Speaker Change: The existing contract runs until July 26, and the vessel is thereafter intended to be moved to Pan American and the contract in Argentina at an increased capacity utilization.
Speaker Change: We meet with on site on the hub offshore Senegal, and Mauritania and preparing to start commissioning activities to the mentioned accelerated commissioning plan later this month.
Speaker Change: First gas from the S. P. S. O is expected in Q4 and full C O D in 'twenty five.
Speaker Change: The C O D will start to 'twenty are contract duration unlocking golar share of the 3 billion EBITA backlog.
Speaker Change: Yeah.
Speaker Change: Turning to slide 14, and our mark to growth plans.
Speaker Change: We are now the final stages of the yard EPC contracts.
Speaker Change: Confirmed delivery of the first contemplated Mark <unk> will be within 2027 at an all in <unk> price at an industry, leading $600 million per ton.
Speaker Change: We have spent to date, including the acquisition of the intended donor vessel Fuji LNG around $277 million on the projects, which are all equity funded.
Speaker Change: 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.
Speaker Change: We target to order to first Mark too within Q3. This year. So this quarter and as part of the art agreements. We have secured an option for a second chip with delivery within 28.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yeah.
On Slide 15, we turn again to Macau our pilot unit was completed in early Q2 this year.
Speaker Change: The unit has proven that the technology works, both through a nitrogen leak testing and proven LNG production from pipeline quality gas entering new facility near its construction factory.
Speaker Change: The unit has now been deployed to a live well in Texas U S.
Speaker Change: We are currently working on tuning the operations to facilitate for fluctuate and the gas composition from flare gas.
Speaker Change: Which is obviously different to a stable gas quality stream from a pipeline quality gas index.
Speaker Change: As previously announced we will consider strategic alternatives for the Macau grow face once the unit is proven stable operations on live well production.
Speaker Change: I'll now hand, the call over to Eduardo to present, our Q2 results.
Eduardo Maranhao: Good morning, everyone and thanks, Carl very happy to share an overview of <unk> financial performance during Q2 2024.
Eduardo Maranhao: Turning over to slide 17, I wanted to go through some of the highlights of this quarter.
Eduardo Maranhao: Total operating revenues amounted to $65 million with photo F. LNG tariffs, reaching $88 million up from 86 million recorded in Q1.
Eduardo Maranhao: This increase can be attributed to higher realized the Brent in CTF linked to earnings when compared to the previous quarter.
Eduardo Maranhao: We always look at ethylene G tariff is the appropriate metric, which reflects all realized liquefaction revenues, including gains on our oil and gasoline sheesh from Healy.
Eduardo Maranhao: We reported total net income of $35 million in Q1 when.
Eduardo Maranhao: When adjusting for other non controlling interests. The net income attributable to Golar was $26 million.
Eduardo Maranhao: This figure represents a significant improvement on a year on year basis, when compared to Q2 2023.
Eduardo Maranhao: Adjusted EBITDA came in at $59 million slightly down when compared to last quarter.
Eduardo Maranhao: Because of the recognition of pre operation expenses associated to pre commissioning activities of ethylene Jimmy.
Eduardo Maranhao: Our liquidity position remains strong with approximately $630 million of cash on hand, and expected receivables from our CTF hedges.
Eduardo Maranhao: Based on debt, our net debt position at quarter end stood at six $569 million.
Eduardo Maranhao: It was alluded by Carl we reached a significant milestone with BP with the execution of the commercial reset for our F LNG gaming.
Eduardo Maranhao: We're able to refinance our existing debt facility of $700 million.
Carl: Out of which only 630 has been drawn to date.
Carl: We are in advanced discussions with potential lenders and a new facility is now the credit approval process is.
Carl: These potential new facility offers improved terms with lower financing costs and improve the repayment profile versus the current one.
Carl: We expect to release up to $500 million of additional liquidity net to us upon closing of these new facilities.
Carl: And lastly.
Carl: This quarter, we are declaring a dividend of <unk> 25, a share with a record date on the 26th of August and payments on or around the third of September.
Carl: Now moving to slide 18.
Carl: So healy maintained 100% economic uptime and each market, leading operational track record.
Carl: Here, we can see the evolution of heelys EBITDA contribution over the last quarters.
Carl: We look at on a quarterly basis Healy generated $64 million.
Carl: In Q2. This number is inclusive of $29 million from base tolling fees and around $35 million from Brent in CTF linked fees.
Carl: We have recently seen higher brain and ETF prices. So it's important to reiterate that we continue to be exposed to Brent in TTS. So should prices continue to improve in the coming quarters. We should expect increased distributions from here until the end of its current contract.
Carl: Moving on to slide 19.
Carl: So based on current forward prices heal is expected to generate an adjusted EBITDA net to us of approximately $275 million this year.
Carl: I wanted to highlight the dish figure is higher than the amount seen in 2022, when we had higher contribution of Brent in TTS because of higher global energy prices.
Carl: The 'twenty to 'twenty four 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.
Speaker Change: At the end of Q2 with total debt outstanding for helix stood at $577 million.
Speaker Change: Another great feature from the announcement of our contract with Pan American is that it could also enable refinancing of the existing facility, which could release significant liquidity to us and provide even more flexibility for our balance sheet.
Speaker Change: Let me now hand, the call over to Karl for some closing remarks.
Karl: Thanks, Eduardo that brings us to slide 21, which is summary and next steps.
So on Hilli, we maintain the market leading operational track record and we're very pleased to have entered into definitive agreements for 'twenty are redeployment in Argentina.
Karl: Starting at the end of the existing charter.
Speaker Change: On give me another milestone in concluding the new <unk> commercial arrangements and accelerated commissioning.
Speaker Change: Our focus now is to get the unit into C. O C O D and to refinance the existing debt facility at improved terms.
Speaker Change: As explained we are entry are closing in on ordering our third unit. The first mark to ethylene D conversion expected to be ordered later this quarter with delivery within 27.
We're also pleased with the development of our LNG growth ambitions, and we see strong prospective client interest for additional ethylene projects.
Speaker Change: As explained by Eduardo we have a very healthy financial performance and our balance sheet to support our growth ambitions.
Eduardo Maranhao: With the liquidity of just around $600 million continued focus on shareholder returns and strong cash flow generation potential in U F LNG contracts.
Eduardo Maranhao: All in all we're very pleased with the progress made in the quarter.
Eduardo Maranhao: In particular on our existing assets business development and interaction with both existing and prospective affluent clients.
Eduardo Maranhao: We're excited about the next phase of the company development and our focused growth ambitions to more than double RF LNG capacity by 2030.
Speaker Change: That concludes the quarterly presentation, and we'll now hand, the call over to the operator for any questions.
Thank you as a reminder to ask a question. Please press star one on your telephone.
Speaker Change: Wait for your name to be announced two weeks to your question. Please press star one on one again, we kindly advise participants to limit themselves to two questions per person.
Speaker Change: Yeah.
Speaker Change: We will now take the first question.
Speaker Change: From the line of Chris Robertson from Deutsche Bank. Please go ahead.
Carl: Good morning Carl.
Chris Robertson: Thanks for taking my questions.
Speaker Change: I just wanted to circle back on your comments around the potential swap option for a mark to in Argentina should we think about the expected annual EBITDA contribution than on a pro forma basis for a larger asset of being over $400 million. If you decide to do that.
Speaker Change: Yes that will then be pro rata I've heard as Ics.
Speaker Change: Okay got it and then just with regards to the conversations Youre, having you've obviously laid out several regions, which are looking at now, including South America Africa, Middle East and Southeast Asia could you give us an idea of just how many potential counterparties youre in discussions with.
Speaker Change: I mean, the regions helped but maybe it does.
Speaker Change: The scope of discussions that you're having.
Speaker Change: I think it's fair to say that the number of counterparts is still concentrated around both West Africa and South America.
Speaker Change: There are fewer number of clients both on the middle East and the southeast Asia opportunities.
Speaker Change: We're still very happy with the quality of those discussions that we're having there and both of those locations.
Speaker Change: Concentration of magnitude is West Africa, and South America.
Speaker Change: Got it alright, I'll turn it over thank you. Thank you.
Speaker Change: Thank you we will now take the next question.
Speaker Change: From the line of Ben Nolan from Stifel. Please go ahead.
Speaker Change: Thank you.
Ben Nolan: Good morning, Carl under water.
Ben Nolan: I wanted to ask a little bit more on Argentina, you gave some good color there about.
Ben Nolan: The potential for multiple units effectively dependent I suppose on that new pipeline coming in but obviously theres multiple.
There's multiple companies groups pursuing F. LNG is how do you think about sort of what the overall opportunity set looks like in Argentina, and how you think golar will end up playing.
Ben Nolan: And in that development.
Speaker Change: Oh, that's a good question, so first and foremost gas resources are plentiful. If you compare this to what is deemed to be very large gas discoveries for example, like the greater torture area, where <unk> operates that's a 25 Tcf reservoir.
Speaker Change: While commodities 300 Tcf.
So there is more than sufficient gas, it's onshore and it's relatively easy to extract.
Speaker Change: Hence the market opportunity for Argentinian gas exports is massive probably beyond what just golar can deliver anyway.
Speaker Change: We think that the attractiveness of what we can deliver is certainty of supply through a proven.
Speaker Change: Assets.
Speaker Change: And with very tangible.
Speaker Change: If we do place the order for Mark two within this quarter, we do know when we have delivery of that vessel and that's further derisked by.
Speaker Change: The progress made on the long lead items for us.
Speaker Change: So we see as our all to be the first enabler for Argentina, Khakamada, specifically gas exports the gas is plentiful.
Speaker Change: And the only.
Speaker Change: Call it.
Speaker Change: The key the key the key thing you need to cross is to have a designated pipeline in order to bring the gas to the export site <unk>.
Speaker Change: The existing infrastructure supports at least one of LNG in order to go beyond that you need to expand the existing pipeline system.
Speaker Change: Okay.
Speaker Change: What would you need an.
Speaker Change: Hopefully I can get one more but what would you need a bigger pipeline for a mark to versus the hilli or with either the existing infrastructure work for either that's why perhaps substitution right on the first so on the first one you can use either hillier Mark too. If you go beyond one unit I E beyond three five M Tpa.
Speaker Change: You need to look into the pipeline infrastructure.
Speaker Change: Got it.
Speaker Change: My second question as it relates to just sort of all of the other opportunities obviously, Argentina.
Speaker Change: Or is there.
Speaker Change: For multiple units, but as youre thinking about sort of the opportunity set elsewhere.
Speaker Change: Yeah.
Speaker Change: Appreciating that it's.
Speaker Change: Diverse but.
Speaker Change: Can you maybe talk through how many of those you think are are like single unit kind of situations or or do you see a lot of.
Speaker Change: Situations, where there potentially could be multiple units and that would be needed.
Speaker Change: I think if you map out where stranded gas is in the world.
Speaker Change: It's extremely plentiful, but where it's most obvious is invest Africa.
Speaker Change: Very very large resources of stranded gas sitting in the ground.
Speaker Change: It should be developed significantly cheaper.
Speaker Change: Then for example, incremental U S LNG export projects the shipping distance to an end markets both in Europe, and the far East is shorter and we believe we can construct.
Speaker Change: F N D units at the Capex per ton at around half the price of where you can create incremental tons on capex per ton in the us the competitive advantage of these projects.
Speaker Change: As very significant the gas is proven and plentiful.
Speaker Change: That's where you see the biggest opportunity.
Speaker Change: 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's basically South America West Africa and to some extent middle east that should see multiple units.
Speaker Change: The South Southeast Asian opportunities one unit initiative.
Speaker Change: Right. Okay. Thank you.
Speaker Change: Thank you we will.
Speaker Change: Now take the next question.
Craig Share: From the line of Craig share from truck.
Speaker Change: Brothers. Please go ahead.
Craig Share: Good morning.
Craig Shere: And thanks for taking the questions.
Craig Share: <unk>.
Craig Share: So.
Speaker Change: How quickly could you secure a hilli refinancing.
Speaker Change: Could that be a first half 2025 for that.
Speaker Change: That can certainly be a twenty-five event, yes I think.
Speaker Change: Once all of the subjects in F. A D. On the project has taken which we explained is expected later this year.
Speaker Change: It would be natural to look at refinancing initiatives into next areas.
Speaker Change: Great and.
Speaker Change: Do you have.
Speaker Change: The second Mark too.
Speaker Change: Our sulfur conversion identified and when would you have to issue for a second mark to meet the 2020 a delivery.
Speaker Change: Yes, there are plenty of so called most design ships that you can acquire in the market today that are operating as LNG carriers today.
Speaker Change: And we have identified several vessels that could be suitable candidates.
Speaker Change: And some of them we have previously also inspected.
Speaker Change:
Speaker Change: FY <unk>, if we were to go on the second market you would have to be.
Speaker Change: Based on current <unk>.
Speaker Change: <unk>, unless we managed to improve them around Q within Q1 25.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: We'll now take the next question.
Speaker Change: From the line of Liam Burke from B Riley financial Please go ahead.
Liam Burke: Yes. Thank you good morning, Carl Good morning Eduardo.
Liam Burke: Good morning, Good morning, Carl we saw the addition of new fortress to the to the F. LNG providers, obviously, it's smaller capacity.
Liam Burke: For internal consumption, but are you seeing any other understanding. This is these are tough projects to do but the economics are pretty attractive you're seeing anybody else stepping up and trying to provide LNG as a service.
Speaker Change: So there are there is one project that has <unk> out of Samsung now, which is called SEDAR LNG, which is backed by Pembina offer an LNG export in Canada.
Speaker Change: So so they're doing that but they're doing it against locked in offtake.
Speaker Change: I mean, it's a quite.
Speaker Change: I think it's been 15 years in the making of a project it used to its former Golar I'm pleased that does it and it was a project that initially will started undergoing.
Speaker Change: Other than that we do see.
Speaker Change: People having.
Speaker Change: Initiatives.
Speaker Change: 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 now.
Speaker Change: How are you balancing future LNG projects now potentially you have two more on the books versus some of your outside projects like Mccraw and.
Speaker Change: And Avenue.
So.
Eduardo Maranhao: 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.
Eduardo Maranhao: Our fleet our portfolio to a very focused <unk> company.
Eduardo Maranhao: Avenir LNG is one legacy investment that we haven't disposed.
Eduardo Maranhao: For a number of reasons, but it was an investment made.
Eduardo Maranhao: When we owned Golar power, we like the supply demand dynamics, we have invested around $50 million.
Eduardo Maranhao: And right now.
Eduardo Maranhao: Investment that we have.
Eduardo Maranhao: 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 investments.
Eduardo Maranhao: When it comes to Macao Macao the way we see it is a replication of what we are doing in the maritime environment and at a smaller scale onshore, but the whole trick is that you capture snare gas, which otherwise be burnt into the atmosphere. So I E. The cost is extremely low of the inputs.
Eduardo Maranhao: There are significant environmental benefits of if you managed to crack this solution.
Eduardo Maranhao: So on Macau, what we're trying to do is to leverage on the technical technical logical capabilities of the Golar organization.
Eduardo Maranhao: To utilize the same or to capture the same market opportunity that we do a large scale in the maritime environment at smaller scale onshore.
Eduardo Maranhao: However, there should be no confusion that golar <unk> focus is to grow on <unk>.
Eduardo Maranhao: And that's our focus and we are not planning to divert any significant capital elsewhere.
Eduardo Maranhao: Okay.
Speaker Change: Great. Thank you Carl.
Speaker Change: Okay.
Speaker Change: Thank you we will now take the next question.
Speaker Change: From the line of Alexander <unk> from whether it was certain advisory. Please go ahead.
Alexander: Thanks for taking my question here.
Speaker Change: Just jumping back to Argentina.
Speaker Change: 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 ora and offshore jetty subsea infrastructure and then how much of this infrastructure would be specific to <unk>.
Speaker Change: Yeah. So that's deployed so either hillier mark too.
Speaker Change: Okay.
Speaker Change: The key things that's required is.
Speaker Change: As you correctly point out moring mooring is covered by South American logistics.
Speaker Change: And a short pipeline from the existing grid two sites.
Speaker Change: Site selection.
Speaker Change: Alright, Thank you and a quick follow up for.
Mark: Mark too and that swap option and art.
Mark: Container.
Speaker Change: What I heard you say that the swap had to be executed before <unk> is that correct yes.
Speaker Change: Okay. Thank you very much.
Speaker Change: Thank you.
Speaker Change: Thank you we will now take the next question.
Speaker Change: From the line of Chris Robertson from Deutsche Bank. Please go ahead.
Chris Robertson: Hey, guys. Thanks for taking a follow up question for me I just wanted to return to Macau for a moment here and Carl you mentioned.
Chris Robertson: About not being confused with the focus on LNG, but so with regards to Macau is there any potential that you could license out the technology given that you have patent control over it rather than.
Speaker Change: Taken during the undertaking yourself.
Speaker Change: Sure. So what we've said quite clearly since we initiated Macau is that we want to fund it through proof of concept.
Speaker Change: <unk> proof of concept is achieved.
Speaker Change: In the relatively near term our ambition then is to look at strategic alternatives for the growth phase Golar is not intending to.
Speaker Change: Having a qualified for our balance sheets.
Speaker Change: Resources.
Speaker Change: Therefore, we are looking at any type of structure that could benefit the technology, that's been created at Macau without.
Speaker Change: Compromising N L. R F LNG growth ambitions.
Got it that's really clear thank you Carl.
Speaker Change: Thank you I would now like to turn the conference back to <unk> for closing remarks.
Speaker Change: Thank you all for dialing in.
Speaker Change: 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 were done engaged on our F LNG growth face.
Thanks, again and have a good day.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].