Q3 2025 Golar LNG Ltd Earnings Call
Welcome to the Gola LNG. Limited third quarter, 2025 results. Presentation
After the slide presentation by CEO Karl, Frederick's double and CFO Eduardo marinho. 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 a listen only pose.
I will now pass you over to Carl Fredrik stubble call. Please go ahead.
Thank you, operator and good morning from our head office in Bermuda.
Welcome to golar's Q3 2025 earnings results. Presentation,
My name is Carl Fredrik starbow the CEO of golar, and I'm a company today by our CFO at w. Mar now, before we get into the presentation, please note the forward-looking statements on slide 2.
Starting on, slide 3, and an overview of goolar.
Following our announcement on October 23rd, our existing Fleet of 3 flies are now fully contracted on 20 air Charter durations with a total backlog of 17 billion before commodity upside and inflationary adjustments.
now, that the existing Fleet is fully contracted, the key focus of the company is now on developing our fourth effort in the unit
During the quarter, we've made significant Technical and Commercial progress in deciding on size and the sign of our next unit.
As you can see, on the bottom half of the slide, we have 3, different growth designs, the Mark 1 2 and 3
Which differ in liquid fraction size ranging from 2.5 million tons, all the way up to 5.4 million tons.
We're on track to decide on the next flng project in the coming months.
Over the course of the last 5 months. We've also concluded just over 1 billion in new corporate debt facilities, and retired our October Norwegian Bond maturity of 190 million.
Following these developments, we now have a cash position of $1 billion and a net debt position of around $1.4 billion.
Over the last 12 months, we generated 221 million of adjusted eita, mainly from the operations of the Hill.
Our ebita generation is set to quadruple from contracted ibitta. Once our existing Fleet is fully delivered during 2028.
Turning to slide 4, the highlight of the quarter is for sure the final FID and successful fulfillment of all CPS for Mark 2's 20-year charter in Argentina.
We now have earnings visibility for all our assets through 2045 and Beyond.
The total earnings. Backlog stands at 17 billion for Calm before commodity upside and inflationary adjustments.
Fmd projects to the portfolio.
Turning to slide 5. We highlight some of the key characteristics of our flng Charter agreements.
Goler aims to structure, our long-term contracts as solid infrastructure cash flow with meaningful contractual protections.
Some of the key attributes of these Pro protections include that all of our contracts are paid in US dollars.
All cash. Flows are paid offshore and net of any local taxes in the country, where we operate.
All of our contracts are on English law.
And for all our long-term contracts,
Uh, operating costs and maintenance capex is either passed through or reimbursable by our counterparts.
In addition to these strong protections, we have further fiscal protections for our 2 contracts in Argentina.
Including 30year non-interruptive.
Environmental assessment approvals.
And protection from any changes to fiscal or regulatory terms, including taxes Etc.
Through the large investment protection under the rigi framework in Argentina.
We furthermore have a corporate guarantees from the parent companies of our counterparts for a significant portion of the contract backlog, to safeguard the cash flows.
Our mission is to identify attractive, gas reserves globally, and utilize. Our flng technology to monetize these assets together with strong up Upstream partners.
We try to structure the contract in a manner where we reduce the country Risk by creating the mentioned strong, contractual and Regulatory protections as well as creating a buffer between golar's operations and the country where we operate.
These buffers are essentially the charters of the unit.
Which are in. Turn includes pingu in Cameroon.
BP offshore Mauritania and Sagal.
And the cesa Consortium in Argentina, where we have the pro router corporate guarantees, from the shareholders, which comprise Pan-American energy, ypf pumpa, and harbor.
Turning to slide 7 and a business update for the quarter.
Q3 was 1 of the strongest quarter in the history of goolar. Now, adding 8 billion dollars of firm ebita backlog.
Through the lifting of all CPS and FID for the 20 year Charter of Mark 2 to Argentina.
In addition, we entered the US rated and secured Market with golar's first ever us documented, 500 million dollar Bond,
With a 5 year duration, carrying a 7 and a half percent coupon.
In the quarter, we also retired a Norwegian bond with a net outstanding amount of 190 million at maturity in October.
we've also signed, uh, the hilly redeployment scope in between her contracts in Cameroon, and before starting the contract in Argentina, where the vessel will return to her original construction, Shipyard at C, Trim in Singapore,
We've also approved the ordering of lonely items for the fourth f&d.
And we have approved a new 150 million buyback program in line with our track record of buying back over 9 million shares over the course of The Last 5 Years.
Turning to slide 8 and focus on hilly.
Hilly maintains her Market leading operational track record with another quarter of 100% economic uptime.
We've now delivered 14842 Cargoes in startup or producing more than 9.8 million tons of LNG.
During the quarter, the unit, generated 51 million of adjusted eita to go.
Turning to slide 2 and focus on the Gimme.
Gimme started her commercial operations, date under the 20-year contract for BP offshore mauritanian, Sagal in June this year.
We're very pleased to see that operations are stabilizing and continuously, improving and throughput.
We're now fine-tuning operations with daily production frequently. Exceeding base capacity.
In addition, we're actively working with the GTA partners.
To identify and develop value enhancing initiatives for the GTA project.
This and the bulk of knocking on production capacity to improve unit economics and overall throughput, which will then benefit the potential learnings of gimme overall and Beyond the base. Evita,
we're also pleased to announce that we're in very Advanced stages of entering into a new credit approved, 1.2 billion Bank refinancing facility of the Gimme
We expect this facility to close within this quarter and Eduardo will explain this in further detail in the later section.
Turning to slide 3 and a focus on the Mark II.
As already explained, the key highlight of the quarter was the FID reached in August and the CP satisfaction met in October.
The project remains on schedule for delivery in Q4 27 and we expect to commence operations in Argentina during 28.
Today we have spent 1 billion dollars.
Out of the total conversion. Budget of 2.2.
And the 1 billion has been fully Equity funded by goolar to date.
You can see all the pictures, some of the
Progress made on the shipyard.
In uh, China.
To the left, you can see the ship which is divided in 2 parts and now sits on land.
In the middle, we have had the key laying ceremony.
to construct the new midship section, which will be
80 M long and 63 M wide, and will house the liquefaction plant of the units.
And you can see the model structural assembly ongoing to the far, right? This is part of the equipment that will be injected into the midsection.
Turning to slide 11 year to date. We've secured 14 billion dollars in adjusted, debit our backlog across hilly and the Mark II.
Where all of the FID and CPS for hilly was met in May.
and for the Mark II between August and October,
we see the combination of these 2 contracts as a very strong addition to go large portfolio, generating a base ibitta of 685 million over 20 years before meaningful commodity upside and inflationary adjustments.
Both of which Eduardo will explain in further detail later on.
turning to our key Focus going forward is adding uh, unit number 4, where we explain further details on slide number 12,
As we explained on our Q2 call, we made commitments to the 3 Shipyard to come up with updated pricing delivery and payment terms. If we were to go ahead uh, with 1 of the 3 designs,
We have now obtained search pricing and delivery times from all the 3 ship yards.
So, Mark 1 design is the same design of both the helium. Gimme
It's a proven design, we know it. Well and the current pricing works and aligns with some of the commercial discussions ongoing.
The Mark II would be a repeat of the vessel currently under construction.
And we are pleased to reconfirm time and price with the shipper.
We've also spent the considerable amount of time getting an updated price time and schedule for the Mark III.
And we continue to see uh yard pressure for attractive slots and delivery times.
And we do think that timing is of the essence, if you want to lock in attractive, um, delivery
The key pressure item for the delivery of all 3 assets.
Are long lead items.
These long lead items, see significant pressure both on delivery and price mainly driven by the AI data center. Boom. In the US
We now see relatively new entrance into some of these suppliers.
Where companies like Google alphabet meta. And so on are ordering gas, turbines in large quantities.
Putting price pressure and delivery pressure.
Being an existing large, and long-term clients of these Subs suppliers helps us in securing attractive slots despite the increased competitive landscape.
We have therefore gotten board approval to enter into long lead items.
By the shipyards through over the course of the last few months.
so what do we
Course of the last 12 months is relevant, and what's highlighted on slide 13.
The Mark II, we placed the order in September 24 on speculation, even if we had very strong commercial lead, the order was initially on speculation.
On May 25, we signed the 20-year charter with CESA.
FID was met in August and all conditions met in October.
What we clearly saw from ordering the unit on speculation alongside, the redeployment of hilly, was that we were able to drive considerable commercial value in golar's favor by having a firm delivery and several commercial opportunities available.
We are planning to following the same recipe for unit number 4.
There were several commercial interests, both on the Hillary deployment and on Mark 2 that lost out to the argentinians.
We have obviously maintained those discussions. And we've also developed incremental units.
Incremental projects.
Therefore we plan on on using the same methodology to drive commercial value in our favor with a similar timeline expected for a new project.
The capex to ibitta for the Mark II was 5 and a half times.
For a 20-year contract before the commodity upside and the inflationary adjustments.
We continue to see a strong, uh, development in the commercial pipeline for new projects.
And we're therefore comfortable to go ahead with ordering the long leads.
Imminently.
Turning to page 14, we made further advances for the next units.
We've confirmed that the construction time is between 36 and 38 months for both the Mark I and the Mark II, and around 48 months for the Mark III.
The primary reason for the longer lead time on the Mark III, is that for that unit. We are not starting with the donor vessel but purpose building from the get go and it's also larger in size and require longer time.
As already explained we received updated pricing delivery and payment terms which are broadly satisfactory to the project economics that we're targeting.
We have identified an inspected, donor vessels.
And given the state of the current LNG shipping Market. We're very pleased with the levels in which we can Source, attractive, conversion units.
We're now working to narrow commercial opportunities, set an upstream timing and decide on flmd design.
We will Target long-term infrastructure contracts and we have positioned the balance sheet to facilitate to add 1 more unit.
We're now on track to decide on the fourth level and vessel in the coming months, but starting with long lead items imminent.
Turning to slide 15 and to elaborate a bit on the market opportunity and what we see ahead of us.
It's tempting to look to the fpso industry's development which started in 1985 with its first units.
And grew very quickly to, um, around 20 units, 10 year later.
We see in today stands at more than 250 units globally, with 10 to 15 projects, added annually.
We see a similar development, taking place in the f&d industry.
We're very pleased to see the increasing adoption by the industry that fell in. Gs are the cheapest quickest and most efficient way of monetizing stranded, and Associated and flare, gas, resources globally.
Goler. Partnered this business with the first delivery in 2018,
And the fleet now stands at 14 units, with several planned incremental projects in development.
We're pleased with our position as the only proven provider of efl and DS for service.
And we plan on maintaining um an active growth strategy. For as long as we can, secure economics along the lines of our existing contracts for 20 are durations.
We will however, maintained our policy of having maximum 1 unread effing at the time.
As we've explained over several calls, we still have the key premise of our business.
Has 3 cost drivers.
The cost of lifting, the gas.
The cost of liquefying, the gas and the shipping distance from where the gas is produced to where it's consumed.
The largest current exporter in the world of LNG is the U.S.
They also happen to be the largest source of growth of incremental Supply over the coming 5 to 10 years.
And they also happen to be.
Uh, the most expensive producer. So the incremental producer
Hence if we can Source projects where we can produce the gas significantly cheaper than Henry Hub, we know we have an attractive cost competitive advantage in constructing the liquefaction units.
And more often than not, our projects are closer to end users and therefore have a shipping advantage.
And if we have these or continue to develop projects with the 3 significant cost advantages over the largest and incremental producer in this market, we believe we have a very strong business and 1 that we will continue to grow.
Turning to Eduardo for group results.
Thank you, Carl, and good morning, everyone. I'm pleased to give an overview of Golar LNG Ltd's financial performance for the third quarter of 2025. So, moving to July 18th, here are the financial highlights of the quarter.
Following game is COD in June. This was the first quarter with full operations of both of our units.
I'm pleased to share that Gimme has been performing extremely well, and daily production is now frequently exceeding base capacity.
We achieved total operating revenues of $1,223 million in the quarter, and that includes fl ng tariffs of $132 million in this quarter.
City contributed 51 million dollar store ibida while gimi added 48 million. This quarter
In connection with the startup of operations of Gimi, we incurred certain one-off expenses which are expected to normalize in the next quarters.
when accounting for the corporate and project development expenses, this quarter, our total adjusted ibida reached 83 million
Total for the last 12 months, ended in Q3 was 221 million.
This quarter, we report a net income of 46 million.
This figure is inclusive of a 12 million of non-cash items. Such as a judgement in the value of embedded ttf and brains derivatives within the hilly contract as well as changes in our interest rate swaps.
In October, we raised $500 million under our first US rated senior unsecured bonds with a new 5-year note at a cost of 7 and a half percent.
Following that we repay the 190 million of our unsecured, no vision bonds issued back in 2021.
Our liquidity now stands at approximately 1 billion dollars of cash on hand.
so following that our net debt position right now, stands at just under 1.4 billion dollars
Lastly, we're pleased to declare a dividend of 25 cents per share this quarter.
With a record date of November 17th and payment scheduled for November 24th.
Now, moving to slide 19.
We continue to focus on a creative growth while my while maintaining a sustainable policy of shareholder. Returns as our units come online, we plan to return. Most of operating cash flow after that service to shareholders why we will continue to recycle Capital through asset level financing and existing that optimization to fund the creative growth. These are not mutually exclusive.
Over the last 5 years, we returned more than $800 million to shareholders, including dividends of, over 260 million, and BuyBacks of more than 9.3 million shares at an average price of 125 dollars per share.
Bringing the total share count to 1002 million shares outstanding at the end of Q3.
In line with that, I'm pleased to announce that our board has approved a new buyback program of up to 150 million dollars.
Now, moving to slide 20.
Following the announcement of the market 2 F and C piece fulfillment. We now have full visibility of our earnings for the next 20 years.
The this gives us a clear path to cash flow growth and increased shareholder returns.
By 2028, when our 3 FG units are fully delivered in an operation, we expect our ebida to grow by more than 4 times compared to the last 12 months. This can grow even further subject, to further commodity website from hilly, and the Machu.
Both $8 per million btu.
In 2028, when the mark 2 comes online, our free cash flow to equity. Generation could be around 5 to 600 million or approximately 5 to 6 dollars a share before further commodity websites.
Now moving to July 21.
So how do we plan to fund that growth?
Going forward. We plan to use the liquidity released from that financing procedure to be allocated to fund the creative flng growth.
We have now received final credit approvals for a new, 1.2 billion Bank facility for flng, give me at improved terms, and we expected to get to close within Q4.
This facility care is improved the terms and conditions compared to the current 1 and is expected to release net proceeds of over 400 million Nets to us.
At 5.6 times, the game is annual contracted ibida. This is a good example of what can be achieved on the back of our long-term charters.
When looking at our existing debts at hilly and targeting a level of 4 to 5 times, its annual contracted ibida. In that case, even at the lower level than the Gimme 1, we could release up to 1 billion dollars in proceed from that just by refinancing the existing in that with a new facility.
Similarly, if we apply the same multiples to the mark 2, which is currently completely unencumbered, we could be looking to raise up to 2 billion dollars from new financing.
Combined. These 2 transactions could raise up to 3 billion dollars in fresh procedure, which can be used to fund further flng growth?
Now, moving to July 22.
Following the confirmation of the contract in Argentina with the FIDs of healing in the Mark 2, we now have a total EBITDA backlog of more than $77 billion before commodity upside in further inflation and judgment.
I wanted to recap how this is built upon all units are in operation.
So, starting with our, with our share of the gear Niche, this is expected to add 150 million dollars.
Uh, followed by the 285 million from heli. As you can see on the slide and 400 million dollars from The Mach 2, when you deduct, our corporate expenses, we're left with a basa of 800 million fully secured for the next 20 years.
As I explained before, changes in LNG, prices could significantly uh give a very high upside to us.
And in that case, we have a limited downside with a very significant and uncapped upside.
For example, if we assume the FOB LNG price is a stated dollars per million BTU, our EBITDA could be in excess of $1 billion per year at $15; this number could grow to $1.5 billion.
As a reference, if all the units were in operation in 22 and assuming LNG prices. Uh, during that time, we could be earning close to 3 and a half billion dollars on that given year.
This really shows the huge upside potential of our commodity upset.
So lastly, on slides 23.
I wanted to summarize the different ways. Our investors can have exposure to Google.
Our Shares are listed on NASDAQ and I'm pleased to see increased volumes with daily liquidity. Exceeding, 50 million dollars per day.
Following our latest issuance over our new US rated 500 million on secured Bonds in October. We now have 2 on secured, bonds, trading in the market with a total outstanding amount of 800 million.
We have also issued 575 million of convert convertible bonds, back in June,
Uh, so I think that's on this slide here on our hand, the call back to your car.
Thanks Eduardo. Turning to slide, 25 to summarize.
We're very pleased with the development of the quarter and in particular, 2025 year to date.
We Remain the only proven service provider of flng as a service.
Combined between helium gimme having. Now, delivered more than 150 LNG Cargoes
Our earnings backlog. Now stands at 17 billion dollars of ibitta before commodity upside and inflationary adjustments.
This will further increase as we add additional units.
Our ebita is set to quadruple between now and 2028 and the pathway to multiple return in shareholder returns.
Is beyond the quadruple as the ebit growth is far in excess of that service growth.
We remain a strong balance sheet position to provide for additional growth units.
Our fully delivered net debt to ibitta stands at around 3.4 times.
With a current cash position of around 1 billion dollars.
We're on track to order our fourth f&d unit and we're in the process of ordering lonely items. During this quarter,
our Focus remains on shareholder returns.
And we're pleased that the board approved yesterday. A new 150 million buyback program, which is in line with the 812 million returned to shareholders in The Last 5 Years.
That concludes the prepared. Remarks of today's presentation and happy to turn the call back to the operator for any questions. Thank you.
Thank you. If you wish to ask a question, you will need to press star 1, 1 on your telephone, and wait for your name to be announced. Please limit yourself to 2 questions to withdraw your question. Please press star 1 1 1 again.
We will take our first question.
Your first question comes from the line of Chris Robertson from Deutsche Bank Securities. Please go ahead your line is open
Thank you, operator. Good morning, Carl and Eduardo. Thanks for taking my questions here. Um, just we saw some correlation in the share price recently with some uh, with the Argentine Market due to the recent election cycle and 1 of the things that could help reduce the Market's perception of risk around Argentina. Uh, perhaps this if, if cessa is able to lock in long term, offtake agreements. So I was wondering if you could comment on cess is currently current
Strategy. Um, what they're currently doing? If they're out competing in the market for long-term uptake at sale purchase agreements. And where things stand on that front.
Good morning Christian and we've observed the same uh, which which is interesting. I think we tried to explain the structure of our contracts on slide 5 in this deck.
Um, these contracts are for 20 are durations and we've structured them independent of political parties.
Uh we subjectively are pleased to see uh the the outcome of the election. However, our contracts, the FID for the Mark II was taken before the outcome of the election.
Uh and we do not think that it would have any material impact on our earnings irrespective of outcome. But subjectively we're pleased to see the development.
Uh, to answer your question on long term off. Take that's a Cess of decision.
We um, are obviously shareholders of cessa, so the current plan is to initially lock in the off, take for the hilly volumes.
Um for um a a decent period of time and their we're pleased to see the activity level level and interest for that off. Take
As well earlier explained, the world is looking to diversify sources of LNG.
And the attractiveness of Argentina sitting on the world's second largest Shale discovery.
Um is very interesting because it will be a long-term and very significant. Um exporter of lmd for the coming decades so we see very strong interest from
All the big industrial and trading houses for that volume.
We do expect them to sign the first of their contracts within this quarter.
Right, thank you for that. Um, just turning to the the donor vessels at the moment, they seem to be relatively cheap. Um, that being said, there's a little bit of cost inflation as you as you probably. Um, saw here on Long lead items and also from the shipyards just being relatively full. So with that in mind. Um, can you comment if if the future projects could Target a similar potential capex, EBA ratio of 5.5 as you noted in the slides here, or is that calculation a bit different, um, with recent costs. And if you could comment on where total capex stands today on, on some of the new potential projects,
I, I think it's fair to say that the
Uh, top side equipment. So the top side equipment cost inflation and uh construction time offsets the saving of the donor vessel and more. So the cost inflation pressure is higher than than what you say on the ship. Even if they do partly net of each other but stronger pressure on the upside to put it that way.
However, we're pleased to see that that also the case for um, liquefaction fees.
and we,
are planning or or targeting to do a new projects with similar economics on capacity with our ratios versus, um,
The existing project.
Up the shipyard, um, would that be locked in at the similar price of the Fuji, or has there been some cost inflation that could impact that as well?
It's you have a cheaper donor vessel than the Fuji you have uh as higher a long lead items. But the overall price I would say for this context is broadly in line with the slight increase.
But broadly in line with the existing Fuji.
That's my question is. I'll turn it over.
Thank you, Chris.
Thank you.
Your next question comes from the line of Evan cosgard from Clarks and securities. Please go ahead, your line is open.
Thank you. So I have a question related to give me, uh, and the capacity of that ship, I know you have answered something similar before and touched upon it in your presentation, but all of your partners is very well. Cool about the potential for the racing. The the capacity of that ship, I think this specific number is like 10 to 20% about the current name that capacity.
so, if you don't have any comments or color on that statement,
And if it's possible.
Yeah. Hey so when you make reference to name plate, there's a few different numbers. So let's let's talk about name plate. The name plate, capacity of gimme is 2.7. Mtpa.
The contracted volume is 2.4, mtpa.
so, when we say that the unit makes 215 million dollars of annual ebita,
that's with reference to the 2.4 mtpa, which is 90% of the 2.7.
Is it possible that you can produce more than 2.44 and up towards 2.7? Yes. Absolutely.
Is it possible that we can produce more than 2.7?
We are evaluating that through the debottlenecking exercise that I mentioned. During the call that could include upgrading certain equipment, the magnitude and percentages over and Beyond 2.7. We are not in a position to have a clear stance on today.
The way it works is that if you change 1 single component that component itself could be like, 15 or 20%,
Uh, production increase, but then you face a bottleneck elsewhere in the liquefaction plant.
So, you know, it's a knock-on effect and you need to to go through the entire system, to really engage the total potential, the bottleneck, um, potential. So for now producing more than 2.4, whether that's feasible. Yes, we think. So it's subject to operations upstream and ambient temperature.
Are we if it possible to do over the the sign name plate, perhaps, but that's through the debottlenecking percentages until that exercise is done.
Okay, thank you so. Well, my second 1 is on the market for flgs. As you've said, there's been a growing number is of lmgs and interest in that market. But we also see new companies that are doing flgs like sales in mg and on on Google LG
And these product companies are private. So we don't really know much about the capex or contract structures.
That they get for the the callings Etc.
But do you, do you have any information when it comes to? How does this these units compared to yours and in terms of competitiveness and are you, are you also seeing more competition when it comes to potential projects that you are looking at?
So we're pleased to see that more people adopt flng technology. I don't think I want to go into any of the specific projects uh, that that you mentioned, but we're pleased to see increased adoption. I think it's still fair to say that there are more PowerPoint flng companies than real, uh, flng companies.
But even including the projects that you mentioned. None of them are offering flng as a service.
All of them are utilizing gas that they control or in areas where they control. They're not offering this.
To to um, an upstream partner.
An external option partner.
So, do we see increased competition for Shipyard slots? And long leads? Yes.
Do we see competition for flng as a service right now? No.
Thank you. That's all for me.
Thank you.
Thank you. We will take our next question. Your next question comes from the line of sparrow Donis from City. Please go ahead. Your line is open.
Its operator. Good morning team. Um, first question wanted to hit quickly, um, the, the buyback, um, probably back was linked to to those notes. You did earlier this summer, curious how you're thinking about deploying this program and what metrics you'll be. Looking at each quarter to decide how much you're going to repurchase.
Oh, hi Spyro. This is Eduardo here. So uh as we stated during the call over the last 4 and a half years, we we bought back over 9.3 million shares,
I think we have taken a, a pretty uh, uh, opportunistic approach to that.
Following the convertible bonds, we bought back 2 and a half million shares in the previously approved uh program had then been being exhausted.
So I think we have received the approval yesterday from the board for a new program of up to 150 million dollars, which we will continue to actively and the opportunistically, uh, execute in the market, in the coming months, but I think we will not change our our approach to to buy backs. As we have been consistently doing over the last 4 and a half years.
Got it so it's great to hear. Uh second question, maybe just moving to the fourth flng unit. Um, curious if you could put a finer point, maybe some of the gating items here to moving forward. I realize you talked about some of them uh but you also mentioned uh going back to potential customers. You had spoken to before curious how big that list is and maybe why they're stronger candidates Now versus not prior.
So, uh, well, the list of existing client is very obvious. It's Penco BP Cosmos and the C partnership, I think
Uh, we're obviously uh with hilly departing in Cameroon. Cameroon has more gas reserves. Uh, that
Are currently not being monetized the day we leave. There will be no LNG experts from Cameroon.
I think we have a proven operating model there. Uh, it's been a very successful partnership across all the parties and we will be pleased to uh continue to work in Cameroon if we can find the right resource and agree the the right terms.
uh, I think for the GTA project many, um, options are are being evaluated to enhance the unit economics of that project, which could include increased equation capacity,
Um, we so those are are obviously the existing clients. There were other clients that were or other prospective clients that
Were competing for the mark 2 and Hillier. Uh, some of them have now developed further, uh, since uh, sort of, uh, losing Health to the argentinians last year.
And and have have gotten gas approvals export rights, and so forth that make the project more mature and more positioned to to lock in an FG.
So those are the ones we develop. In addition to the continuous Business Development, our our BD team continues to develop and some of them are are in areas where currently not operating in as well.
And, and we do see strong demand tool obviously from West Africa and South America. But it would be interesting to see if it would be possible to open other areas as well that we're currently in discussions for.
Great. I lived there for today. Thank you, gentlemen.
Thank you. Thank you.
Thank you. Your next question comes from the line of John McKay from Goldman Sachs. Please go ahead. Your line is open
Hey guys, thank you for the time. Maybe, I'll just pick up on on that last 1. It sounds like you are lining up for, you know, a fourth vessel order effectively before we we know exactly where it's going, similar to what you did last time, makes sense. But I guess my question is, you know, going going with the Mark 1 or Mark, 2 or Mark 3, each of those kind of has a different Market where it could end up going. So I was just wondering if you kind of talk about, you know, where you're seeing the commercial opportunities relative to each of those 3 options.
Yeah. Hi John. So
Uh, you're you're right. As we said in the prepared remarks, we are planning to narrow the design in the coming months.
Call box. The difference is the magnitude of how many turbines you order for a different designs?
When we make the slot reservation and commitments to the long Lids, it is interchangeable. And therefore, the reason for going ahead with that now is that that's still flexible to design.
Subject to the deciding the sign in the next coming months and that's where we're targeting.
Where we see uh the smaller ones or the Mark 1, that's West Africa business the way we see it.
Uh, Mark 2 is more versatile in terms of geographical, uh, or geography.
Uh, and and Mark III. Uh, effectively currently has 2 projects that we're working on
Um, so that it's fewer projects for for Mark 2 than not sorry for Mark III than the other 2. But um, yeah. So we're now planning to narrow that range to to um, decide on which vessel to go for.
I appreciate that. Thanks quick. Second 1 for me. Just can you remind us the status of the pipeline for Argentina? Kind of what we should look for next? When we kind of need to see something moving forward, any updates there.
So there are, there are 2 relevant pipelines. The, the the list, um, cumbersome 1 is the 1 that connects the existing grid to the hilly, that's on the construction. And and very much on track the 1 you are referring to is the new pipeline from the vakama to the Gulf of San Matias.
That pipeline is a Sessa work. Stream is independent of our contracts because we are paid as long as we're on site and available irrespective of where the liquify or not.
Um, however, uh it's obviously important for us that that pipeline is built because that is what speaks to the upside, and the overall, uh, economics.
Cesa is now in an active round or where they are auctioning out the EPC contract, and or a tariff, based service agreement subject to, to which model they go for. And our understanding is that they expect to enter into a contract and the word. It in the first half of next year, the construction time of the pipeline is less than 2 years.
Hence, that should be well within the timeline for, um,
Mark, tus arrival.
Um they're also in parallel working on all the regulatory uh framework needed including uh right away. IGI protection and so forth.
The good thing is that the absolute majority of the, the the distance, the the pipeline will go next to the oil pipeline that was approved last year. Hence, right away is already, uh, that path has already been laid because you can just go exactly next to it.
So we think this is a repeat and we understand that um cesa is happy with the engagement from the potential EPC providers of that pipeline.
Clear, thank you.
Thank you.
Thank you.
Your next question comes from the line of Alexander Bidwell from Weber research and advisory. Please go ahead. Your line is open.
Good morning. Uh, appreciate the time. Uh, just wanted to pick up on, uh, just a couple of the previous questions on, uh, some of the commercial demands or rather uh, demand for flng units. Um, are there any pockets of demand that uh surprised you? Or any specific regions where you feel commercial, discussions have picked up more so than than others.
I I I don't think surprised is the right word. These are very large infrastructure projects that require a lot of stakeholder and a lot of time. So to say that it's surprising, I I don't think it's right the characteristic, but what we do see is that
As we've said a few times on the call there's an increasing industry. Adoption people are not scared of deploying an e anymore and it's a bit like uh you know if your neighbor has 1 you want 1 too and
if you just look at where FL and Gs are deployed or being planned to be deployed in terms of of contracts already sanctioned and just look at the neighboring countries, they all have pretty much the similar reserves. Why would your neighbor do something and make
You know, billions of dollars of LNG cash flows a year when you're not. And that dynamic is now ongoing, stronger than previously, because more people are adopting the projects.
Interesting. That's a, that's a great analogy. Um, uh, and for my second question, uh,
Or debottlenecking at, uh, or on the Gimme. And then once, uh, you approve or decide the path forward, could you walk us through, um, how the actual work might be executed? Could there be any potential impact to production? Uh, Etc?
Uh the question is probably just as well placed to to be pure Cosmos, but the way this works is it's an interaction, right? So the gas comes is lifted from the ground, then goes through, a BP operated fpso, then the gas is sent to uh, the Gimme then circulated on on a hub that's BP operated and and then offloaded.
So when you talk about the bottlenecking, it's not just give me. It's the whole process from the gas being lifted until it's loaded onto a ship.
um, for example, 1 of the key, uh, performance measure of an flng is the quality of the gas entering the unit and ambient temperature,
Now, ambient temperature is a little bit tricky to to play around with, but you can do smart things, like air, Inlet, Cooling and so forth.
So when you talk about the bottlenecking, it's not just on the flng on its itself. It's through the value chain and and where does each dollar deployed make the maximum output and how do we work together to optimize that output?
So, um, for now that's the discussion, maybe you can tweak tweak, the gas, uh, treatment on the fpso.
To send a more optimized gas stream to the flng and thereby increase throughput as an example.
Right. So the work we are currently. Uh, discussing does not require any movement of gimme, she stays where she is,
It might, um, entail.
Uh, maintenance shutdown of the trains, but you never shut down all 4. You just do, like, we shut down a train for 1 week. Maybe do certain upgrades or change. Some of the equipment. You get that back up and running before you do the next 1 and that would obviously be in accordance with with the Upstream to to boost output and then the MPV of that would be massively positive if not nobody's incentivized to do it because it's working today. So this is an opportunity set which could benefit everybody.
All right. Thank you. Uh, I'll turn it back over.
Thank you. Your next question comes from the line of Liam Burke from B Riley Securities. Please go ahead your line is open.
Thank you. Hi Carl. Hi dardo. How are you today?
We are well, how are you?
Just fine. Thank you. Um, you're talking about future projects and you pretty much have an idea of what the cost of the of the flng is when you're looking at the implicit Returns, on that project. Are you looking at just tolling agreements or do you factor in some sort of, uh, commodity premium on the, uh, on the cash flow generations of future? LGs?
The latter.
So to to, to explain, we do not want to be in any project, if the cash Break, Even of the project is not competitive, then it's a partnership that's set up for failure over time.
And by competitive, we mean competitive to US exports.
So, the way we try to structure the project is to charge.
What we think is a fair, but also attractive to goler firm. Tolling, um, part.
And then a commodity upside, if the, uh, Pho achieved fob price or significantly, overshoots the the cash Break. Even of the project. In that way, we can make a project with an attractive cash Break, Even to all the stakeholders and the line structure on
Making money together. If and when gas prices go up, the only thing we know is that over the next 20 years, nobody knows where gas prices are going; it will be volatile. So it's important to have an attractive cash break-even and capture the upsides when they're there.
Great. Thanks Carl. Um, in terms of the Gimme, uh, operational efficiencies and deep bottlenecking, are you gleaning anything from that process that can help you on future flng projects?
Yes.
So if you look at our units, they're they're getting more efficient.
The game is slightly more efficient on the helium. Mark 2 is quite a bit more efficient than they give me, both in terms of fuel consumption.
As well. Now it looks very similar but it's got a nicer radio better sound system and whatever else it has better headlights.
It's the same car, but it's nicer.
Okay, I'll be sure to consider that when looking at a golf, but, uh, thank you, Carl.
Thank you. We will take our final question. The final question comes from the line of Sharif Alma grabby from btig, please go ahead. Your line is open.
Hi, thank you. Uh, so the buyback program was reloaded in Q3 and in the past, you've shown some flexibility regarding how to reinvest in the company.
So, my question is, how are you thinking about shareholder returns through BuyBacks, versus that outstanding 30% interest in the Gimme, uh, given where the stock is today?
Uh, that's for us. Uh, so the 150 is set for for share BuyBacks, right?
Um, when it comes to to the Gimme, that's obviously, the 30% stake is owned by Capri Capital. If that can be acquired accretive to where we can do other flng growth and or where we are trading on the market, we will for sure, consider it, if
Uh, is not we don't need to buy it.
Got it and then, um, turning to the fleet if we fast forward a year and you've secured a contract for a fourth flng, uh, but the order book for gas turbines is obviously grown.
Do you have a sense of how that affects delivery timelines for a fifth unit? You know, is it a few months more than I think you said up to 48 months for a Mark 3 for example.
Okay. To, to just give you an example up. Until June this year, the delivery time for a gas turbine was 24 months.
In June, some of these are are down to almost single suppliers in June 1st, a letter to all. Its clients saying, lead times just went from 34 nought to 24 to 36 months.
So that's a 1 year delay.
Um, if you're an existing client and you have an existing program, maybe you can sneak in in the, in the middle there somewhere, but you're talking significant potential delays, unless you lock in the long Lids, which is why we're going ahead now. Because in developing these projects, you need to know when you start up to drive a commercial value and if you keep letting the critical items slide, even if the shipyard is ready on everything else, if you can't get the top side equipment, there you don't get the ship.
that's,
All right, thank you call.
Thank you. This concludes today's question and answer session, I will now hand back for closing remarks.
Thank you all for dialing in. Um, as we said, we, we're now in Bermuda Eduardo and I will head to New York later today and hope to see some, some of you, um, there over the course of today and tomorrow.
Other than that, thank you for listening in and um we're pleased to stay in touch. Thank you. Have a good day.
This concludes today's conference call. Thank you.
For paying, you may.
No disconnect.