Good day and welcome to the Golar LNG Limited Q3 2012 Results Presentation Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Brian Tienzo. Please go ahead, sir.

Thank you. Good afternoon, everyone and good morning to those over the Atlantic. Welcome to Golar LNG's third quarter results presentation. My name is Brian Tienzo and I will be talking you through the third quarter highlights as well as financial highlights. I'm joined here today by our CEO, Doug Arnell, who will take you through the business update and outlook section. So let's now turn to page 4 for the Q3 highlights. Reported consolidated operating income in Q3 has increased by 21% from Q2 to 70.2 million. Similarly, net income has increased by 26% to 44.7 million. Both of those two have been positively impacted by full quarter earnings contribution from NR Satu and Golar Viking. Also another good quarter, so the Board of Directors has declared an increase in dividends from $0.40 in Q2 to now $0.425 per share in Q3. Furthermore, it has been decided that an accelerated Q4 dividends of $0.425 per share will be paid also in December. In September, vendor financing of $222 million in respect of Golar Freeze from its dropdown from LNG Limited to LNG Partners last year was repaid following a successful NOK bond issuance by Golar LNG partners. More recently, Golar Partners raised a further $181 million in its second successful follow-on equity issue and proceeds for that was used to part fund the acquisition of the Grand of $265 million purchase price. We recently announced also a signed agreement with Keppel for the development of Golar's first Floating Liquefied Natural Gas Vessel. The FEED is continuing on that project with a conversation expected to commence in June 2013. Let's now turn to page 5 for our financial highlights. So our net operating revenues for the quarter at 117.8 million has increased from 103.9 million in Q2. In comparison, Q3…

Thank you, Brian and good afternoon and good morning everybody. If we start my part of the presentation on slide number 10, I first want to talk a little bit about the current situation in the shipping market, both short and long term. Slide 10 has a couple of graphics there talking about the short-term market in particular which in recent months certainly has reversed an upper trend that have been existing throughout the year. The reason for that is related to a weakening in Asian demand combined with high inventories in Asia and also compounded by unexpected production decreases of major production facilities. The graphic on the right-hand side of the page there is quite helpful to see what went on since kind of the summertime this year where you saw the arbitrage value between the Atlantic basin and Pacific basin weakening while spot rates were continuing their strong push as they did through the first part of the year. So although there was, you could say, a bullish sentiment in the shipping owner side of things, because there were very few vessels available, for vessels on the margin uncontracted going through this period of time, the weak activity certainty resulted in both a low number of fixtures happening and those fixtures that did happen, happening at quite a decreased rate for spot voyages. In recent weeks, we have seen the Asian LNG prices turning around, plus the arbitrage value starting to increase and we expect this trend to continue and improve things for our ship demand going forward. Over to page 11, the short-term market certainly was disappointing in the last quarter, in the last months that our view on long-term fundamentals remained unchanged. And those long-term fundamentals are driven by very visible increases in LNG production which…

Thank you, Mr. Tienzo and thank you, Mr. Arnell. The question-and-answer session will be conducted electronically. (Operator Instructions). We will now take our first question from Michael Webber of Wells Fargo. Please go ahead.

Good morning, guys. How are you?

Hi, Michael.

Hey. Just a couple of questions. I wanted to start off with the FLNG and Doug, can you maybe just give a little bit color, I guess, between the cost differences and the return differences between the conversion work and any sort of barge solution which I believe is really in the Douglas Channel? And then maybe, a little bit of color in terms of how you think about the options that you guys have for conversion there? And would you need to see a contract in place on the one you're doing on spec now before you think about exercising those options?

Yeah. In terms of the barge versus the conversion, yeah, I mean, barge is relevant to Douglas Channel, but there's other drivers that may push you towards the barge and that could be, for example, where there's existing LNG storage in a location where you don't need to bring along the storage that you would have with the conversion. There is some flexibility with the barge concept, because once you convert the Moss vessel to a floating LNG vessel, it's going to be quite difficult -- well, it won't be used as a carrier anymore. So if you build a barge and use -- and for example use one of the Moss vessels as floating storage, you certainly have the flexibility to when that certain application isn't needed anymore, which of course is one of the big benefits of this approach, then you have the vessel available for use as a carrier. But we think the best, most flexible, best kind of cost approach would be to with the combined -- using combined LNG production facilities onboard the converted vessel. And that's why we got that one as our favorite approach. It gives you the most flexibility for the types of markets I was talking about. For some of these offshore fields where we see stranded gas, it would be a pretty rare instance where you could design a barge to deal with the sea conditions that you might find there. So we just think the mass conversion vessels are going to be the most likely, most attractive startup project.

Got you. Just to kind of zero in there on the conversion, can you maybe; a, kind of quantify the level of interest you're seeing now? Obviously, it's very early. And then kind of jumping back to my earlier question on the options, is it fair to assume that you guys need to see a contract on that before you think about exercising those conversion option on the other two?

Well, in terms of the interest, I mean it is early days but we -- the FEED on this project isn't going to be hugely expensive, but it's real money. So we were pretty convinced and had seen a lot of opportunity churn ahead of signing up the agreement with Keppel. So we see the level of opportunity as really, really good. And since we made the announcement, we certainly had others coming through the door interested in talking to us about opportunities. It is early days, the -- for each opportunity, we have a lot of work to do to make sure that the design that we are implementing is going to fit the gas supply, the dependability of the reserves, putting the whole project together. But the opportunity flow is very good. I would say the most likely case is that we will have a contract in place before we move ahead with the full conversion. The conversion schedule, however, is -- it's 24 months, but it's kind of 18 to 20 months of procurement of the liquefaction kit followed by four or five months of installation and conversion on the vessel. So the one thing that I would see that we could likely do in order to speed up the execution without exposing ourselves to too much risk capital is to start the procurement process on some of the long lead items. The nice thing about the technology that we're going to employ here is that there's not really any bespoke equipment. The components of the liquefaction plants that will be used are somewhat fungible. So we can go ahead with procurement on long lead items without too much risk and speed up the execution model. The full conversion, because there are certain elements that need to be finally tailored to a specific location, what I would see is that we would know where the first conversion is going before we go fully into that and we're pretty optimistic that's going to happen on the timeline that we've laid out here.

Got you. No, that's very helpful. Just one more from me and I'll turn it over. And again, just kind of sticking with the liquefaction, can you maybe give an update on the timing of Douglas Channel right now? I know that process was delayed a little bit about a month ago, kicked back about a week. Can you maybe give an update in terms of where that process stands now?

Well, again, what we've got with Douglas Channel is the ship option for two vessels to go into that project. What we know about that project is that they are moving through the permitting phase still, looks very optimistic. They've got the long-term export permit, they've got a good position on pipeline supply that tied them into the big reserves. So, as far as we know, the target for that project is still to be on-stream in Q2 of 2015, which will certainly put it either tied for first or close second on -- or first alone on the first LNG exports from -- first new LNG exports from North America. But that's about all we know about the project at this point.

Okay, all right. Thanks for the time guys. I'll turn it over.

We will now take our next question from Herman Hildan of RS Platou Markets. Please go ahead.

Good afternoon, guys. First of all, there's some -- one of your competitors has spent two years and $60 million on their FEED for FLNG. Obviously, that's a very, call it, different type of asset. But could you give some sort of guiding on the cost that you expect to have on the FEEDs there?

I would say it will be less than 10% of that.

Less than 10%, okay. And I know it's quite early in the phase as well, but could you give some sort of indications on what kind of CapEx that you're looking at for 1 million, 2 million tonne vessel? Is it $0.5 billion for one tonne, approximately?

We haven't been releasing specific costs for a couple of reasons. It's kind of commercially sensitive to us. And the second reason is part of the purpose of the FEED is to confirm all that, so we don't want to get too ahead of ourselves. With what we know now, our goal is to be competitive with conventional land-based LNG. And I think there's a huge ability to do this and nobody should be surprised by it. The same thing happened on floating regas where you have all the advantages of a controlled environment to create this asset in a shipyard built on top of an existing vessel that's been depreciated. All of those same benefits will come into the Floating Liquefaction production project. So I think the bottom line thing to remember is that we are very optimistic about unit production cost for producing LNG being competitive with conventional solutions.

Okay. A final question. I mean, you mentioned you have -- that you're looking at quite a few different alternatives. Is it possible to get some sort of sense about what kind of cash cost you would have on, call it, 1 million Btu basis before taking into account shipping?

You mean a unit cost of the production in the…

The FLNG, yeah.

Well, I guess that would be similar to me divulging the cost. If you -- I mean, you can easily look up and know -- I mean, there have been announced deals in terms of what people are paying on a per unit basis, for example, in the US Gulf Coast, what they signed up to deals there. If we got that kind of equivalent totaling payment into one of our vessels, we'd be very happy.

Okay. Thank you very much.

We will now take our next question from Jon Chappell of Evercore Partners. Please go ahead.

Thank you and good afternoon guys.

Hi, Jon.

Just a question on the Maria. Can you give a little bit more detail on the third quarter what the off-hire time was or what the waiting time was, when it wasn't actually operating? And then also quarter-to-date in fourth quarter, has it had any cargos to-date yet, is it possible that Maria can go the entire fourth quarter without any operating days?

I think that in the third quarter, the Maria I mean was on-hire for the majority of the quarter, let's say that, and combined with the fact that, part of that -- one of those charters was done at a very, very high rate, it performed quite well in the quarter. I mean you've seen our total results for the quarter and Maria contributed to that. I think for the fourth quarter, there is little chance that the vessel will be off-hire for the entire quarter, but the vessel has been idle for most of the quarter-to-date.

Okay. And are you still thinking about operating the Maria in kind of a short-term until the broader market kind of picks up again, or is there any activity whatsoever for three- to five-year contracts at rates that you would view as attractive for that vessel?

Our approach on Maria has been consistent while we can secure very good spot rates for Maria, we may choose to prioritize that ahead of the longer term charters. No secrets about what just happened with spot rates through the last months and that certainly influences how we are marketing and thinking about Maria. I would say the opportunities that we have upcoming are more of the longer term nature. When I say longer term, it will be more than a three-year variety, that's where we're focused on now and we hope to have an announcement on the theme of that kind very soon.

Great. And then another FLNG follow-up. You talked about the two different regions, you're looking at the Americas versus West Africa. Can you talk about the risk and return dynamic differences of those two regions…

Yeah, it's actually quite interesting, because they are very different. They are very different in characteristics. In a situation we've got stranded gas or a gas cap that's being flared or the existence of that gas cap is constraining oil production, you essentially have negative value on the product. So your ability to extract returns on that type of opportunity works very, very good. However, in order to extract those returns you're probably going to have to realize some specific reservoir risks, because the project will essentially be tied to a single reservoir in a single country and a single location. So there's kind of that specific project risk. But, of course, depending on the project and the field you're talking about, that risk can be understood and managed and we can make a conscious decision whether the risk return balance is okay. In the Americas, you have a different situation generally where you are tying yourself into existing production and a wide variety of sources of gas and you need to be comfortable that where you're tying in, where you're sourcing your gas and how you're contracting for gas is that you've got security of supply. Certainly the Douglas Channel project is a good example of that where that project is tied into Northeast BC and Western Canadian Sedimentary Basin gas. Compared with the size of that project, you kind of have infinite access to reserves, but the reserve risk isn't great. I'd say the risk on that kind of project is -- that the permits come in clean and that your capital costs are managed property. So that's how I differentiate those two types of opportunities.

And just really quickly, as you look at the development of your FLNG business, are you thinking about a balanced portfolio of those two risk return profiles or is there one maybe the less risky one that you'd focus on first?

No, we'll do all of the ones that have the least risk in highest return back. I don't think there's really a natural balance between those two things. In other words, I don't think -- they are different risk profiles, but that doesn't mean you purposely would try to keep a balance in the portfolio of those. We will take the vessels to the first best opportunities. I would say that there's probably -- the Africa, Southeast Asia opportunity, they are probably at this point more of those in sheer number and the types that we're looking at. Then the kind of pipeline gas opportunities in the Americas, but maybe the quality and visibility of how you get to the finish line on the Americas projects are a little bit better. So I think that's how it's coming out. I think we'll end up doing both.

All right, great. Very helpful. Thanks, Doug.

We will now take our next question from Fotis Giannakoulis of Morgan Stanley. Please go ahead.

Yes. Hi, guys. Thank you for your time. I would like to ask a few more questions about the FLNG and if you can just confirm that -- I understand that Golar is not going to be taking any commodity risk, is that correct? Everything will be backed through long-term contracts?

No, I don't that's necessarily the case, Fotis. I think that with this -- with the FLNG vessel and our carrier portfolio and FSRUs, in one way or another, the whole idea is that because we can be responsible for putting a whole midstream chain together, I think we'd be willing to take some kind of commodity risk in some form in order to extract as much buyers possible from the LNG trade itself. That doesn't mean we'll take irresponsible risks or risks that we can't control. But I wouldn't at all limit the opportunity set that we are working on here to a straight leasing model. Of course, if someone -- we would absolutely lease the vessel out to a creditworthy party who is willing to pay enough to make it worthwhile to us. But we're definitely not ruling out some exposure to the inherent risk in the chain, because we'll be creating the whole chain. So our ability to manage that risk will be strong, so we'll be more willing to take on that risk in return for the value that's there.

Can you explain a little bit how shall we think over the supply -- the price that you will be paying for supplying yourself with natural gas and about the sale price of the LNG when it's going to be liquefied?

Well, again, the two different types of opportunities as I talked about have different characteristics. The one -- if you look at pipeline gas in the Americas or elsewhere, by definition those type of projects are taking gas out of a market that has a market price and a market dynamic. So depending on the location of the project, we'd be exposed or whoever leased the vessel, if that's how it was, would be exposed to whatever gas price dynamic that was. If that was a U.S. project, it would be Henry Hub or [ACO] in Canada or whatever the underlying value of the gas is. So in the offshore opportunities, that's very, very much a case by case basis, how badly does that gas want to get out of the ground will influence what value of that gas goes into the vessel. And then once we get through our vessel – through the production vessel, then it's exposed to where the LNG price is.

Is there a timing that you think that you might have a marketing agreement in place, is it going to be after the FEED process is completed?

No, I really believe that we'll have our first deal in place prior to the FEED being completed.

Okay. Will this project be, all be controlled 100% by Golar or there are also thoughts of potentially setting up a JV with one of the oil major, sort of one of the producers?

Yeah, we would certainly control the conversion process. I mean Keppel is responsible for executing the conversions, so you can say they are in control as well. But we will certainly -- when you say control, we will be very strict on maintaining control about how the conversion projects go. JV structures to implement a specific project are certainly on the table. We're open to that. We want to bring our carrier portfolio and have that added value and if possible, FSRUs. And once we get this going, by the way, I think floating power becomes a much more achievable concept. But -- yeah, a JV partnership, oil major I'm not sure. These are smaller projects, kind of 2 million tonnes or under. Question whether oil major specifically are interested in this kind of thing, we see the natural partner or supplier or JV partner to be more medium or smaller E&P player who with this type of project can have a big impact on their bottom line as well.

Can you also give us some estimate of a cost that we can assume some range potentially that you can give us? And if this range differs, whether this is going to be a pipeline gas project or an offshore project?

Yeah, I mean, someone asked that earlier. We aren't really disclosing even a range on cost. Again, it's very apparent to us in the same way the Floating Storage and Regas vessels ended up being much more economical than land-based solutions that the same thing is going to happen for Floating LNG. So, as I was saying, if you look around at some of the deals that we're -- tolling deals that have been done recently on new liquefaction production, we'd be very, very happy with that kind of deal on our 2 million tonne vessel. I honestly don't know which of the -- whether it will be an offshore field or a pipeline gas opportunity which will be our first, but I'm just pretty glad that we have both of those types of projects that we're pursuing now because both look very viable.

Thank you for that. One last question regarding the FSRU tenders. If I'm not mistaken, the previous quarter you mentioned that you were shortlisted for three potential projects. Now, you mentioned that you're for five. Can you let us know which are these two additional projects?

So Fotis, I mean the five will be Central East Java and Indonesia, the Q8 FSRU Emirates, LNG FSRU, Jordan and more recently the Shell-Reliance FSRU in India. So with the three that we mentioned last quarter, obviously there's been a bit of a delay in announcing those, so they continue to be a work in progress.

And can you remind us how many other parties are participating, except of Golar, in this tender process?

The shortlists are three or smaller.

Okay. Thank you very much for your time.

We will now take our next question from Erik Stavseth of Arctic Securities. Please go ahead.

Hi, guys. My question is sort of reverse back to FLNG again. I saw that Gandria has been taken off open vessel list. Is that a vessel that's been earmarked for conversion now or could you make a comment on that?

Well, the idea on Gandria on the reactivation was certainly that some of the money we would spend to reactive Gandria would be spent anyway in a future conversion. So it wasn't a very difficult decision, but the reactivation time was certainly to pick up on potential carrier charters. That hasn't gone as we would have liked, but we still have her positioned to hopefully take some opportunistic charters coming into this winter. But longer term, Gandria is certainly a conversion candidate for Floating production or FSRU.

In terms of commodity risk, if you were to take ownership in the volumes through one of the FLNG projects, would you be -- I mean it might be a specific, but would you be looking in locking in long-term contracts of the gas or would you be having some kind of spot exposure to Asian spot prices for example?

I think we're long ways from making those kind of determinations. That will be very much influenced as to what the structure on the pricing and nature of the reserves that are put against the project, our view on the market at the time. So I think it's too early to comment on how we might structure that. When we say take exposure to commodity risk, I guess that could be we have actual possession of volumes, but I mean the commodity risk can be structured into the deal as well without us actually moving the volumes ourselves. So the details structured on these projects that's all to come.

And final question, Golar Maria has been rumored to be fixed lately. Is the vessel still on -- I mean, you said it was open, is it on subjects right now?

Well, it's open until we have a firm charter. So when there is a firm charter, we'll make an announcement on that.

All right. Thank you.

(Operator Instructions). We will now take our next question from Oyvind Berle of DnB Markets. Please go ahead.

Good morning, guys. Could I ask you, what are the various components of cost of the Hull versus topside equipment, any subcategories within the topside equipment for FLNG, please?

Well, I guess, when you have cost it may be a matter of opinion on the value of the vessel that's been converted. But the vast majority of the cost, total cost for the FLNG vessel will be first the liquefaction process equipment itself followed by the actual value of the vessel and the yard bill for the conversion would be second and third along ways behind the liquefaction processing equipment.

Okay. Second question, could you provide the timeline of such a conversion? What are the most important processes and where could potential delays arise?

Well, I think one of the benefits -- if you look at why conventional LNG production land-based facilities get delayed, we're removing a lot of those risks from the project. The processing technology we're using has been built many, many times. This will be the first time it's used in a marine environment, but the exact setup has been executed and built many times around the world for peaking applications and other similar uses. So that part of the project is quite controllable. The conversion of the vessel is not too much more complicated than a conversion for FSRU purposes, and it's obviously in a controlled environment in the shipyard. So we're -- delay in the execution timing of the conversion is not very high up on our list of risks that we see.

Okay. Final question, a lot of investors are very concerned for the comparison with FPSOs. Our understanding is that the biggest cost driver was integration problems between various components for an FPSO. What are your plans to mitigating this risk?

Sorry, I missed the first part of the premise of that question.

A lot of investors are worried about the comparisons with oil FPSOs and the biggest challenge was integration between different components. How do you mitigate such risks?

Well, again, remember that the premise of this facility is quite a bit different from that in that the opportunities we're targeting are situations where we don't have a lot of specific clean up or byproducts that come out of the gas stream that we need to deal with. So the complications could arise and expensive solutions needed when you do a project like Prelude where -- that's a true offshore development, where you've got liquids handling, a lot of gas cleanup to do. So this is a long ways from that. This is quite a simple proposition where the gas is effectively ready to be liquefied in a process that everyone can understand and go into storage and load it on a carrier. So I think the analogy is a little bit misplaced.

Thank you so much for your time, gentlemen.

We will now take our next question from Michael Webber of Wells Fargo. Please go ahead.

Hey, guys. I know it's been a long call. I just wanted to hop back on for one more. Doug, maybe just from a high level, it's obviously been kind of a quarter transition for you guys and as you look at more FSRU tenders and you start ploughing money into FLNG, if you just kind of take a step back and maybe kind of look at Golar and where it's heading over the next three to five years. From an invested capital perspective, how do you think your asset mix is going to look? Is it a third, a third, a third? I mean, just kind of help us get a viewpoint in terms of how Golar is kind of transitioning away from just a spot vehicle towards a more integrated solution? Just from an invested capital perspective, how should we think about that pie?

Well, we've got a ways to go on FLNG, but we're entering that space because we feel it's going to be successful. So, when I look forward and I see, for example we've got three Moss vessels that are candidates for conversions. Certainly, I would see that all of those will be converted, a question mark whether they are three FLNG production vessels or whether we still have a FSRU conversion coming up. So that's where those vessels are headed. I'm not quite sure how to give guidance on this. I mean the underlying asset vessels of the carriers in the group, I don't think that we will exceed invested capital on FLNG production vessels by 2015 by any means. I think we'll be weighted towards the carriers still, but that could reach an inflection point as you look out into 2016, '17 or '18 type of thing. But I think that what I'm hoping investors see is that, there's a lot of value in the spread between gas and LNG value. And so with the production vessel, I think the easy way to think about it is we're trying to capture as much value as we can by linking low cost gas to high value markets. And we -- so from an invested capital point of view, the Floating LNG production is the one piece that we've put in place that really gets us there. So from -- in terms of value sources, I think the FLNG vessel could be a big trigger because it allows us to change how we exist in this space.

Got you, all right. That's really helpful. I'll take everything else offline. Thanks guys.

That will conclude today's question-and-answer session. I would now like to turn back over to Mr. Brain Tienzo, Chief Financial Officer or Doug Arnell, Chief Executive Officer for any additional or closing remarks.

Well, thank you everyone. That concludes our presentation and hope that everyone found again this presentation useful. We look forward to speaking to your again for our fourth quarter 2012 results. Good bye.

That will conclude today's conference call. Ladies and gentlemen, thank you for your participation. You may now disconnect.