Good morning, and good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to today's Golar LNG Limited 2Q 2019 Call. [Operator Instructions] I must advise you, the conference is being recorded today on the 29, August, 2019. I'd now like to hand the conference over to your first speaker today, Iain Ross, CEO. Please go ahead.

Good morning. Good afternoon, everyone. Thanks for joining the call today. My name is Iain Ross, CEO of Golar LNG. And today I'm joined by Graham Robjohns, CFO; and Stuart Buchanan, Head of Investor Relations. As Graham is calling in from outside the office today, we also have Brian Tienzo on the call to discuss any of the financials in the event that Graham has problems with his phone line. Okay. Turning to Slide 4 in the pack. We continue to act on shareholder feedback around the perceived complexity of the business, and we'll focus this discussion on the themes of simplicity, earnings stability, liquidity and near-term value. Today, we announced steps to improve simplicity of the business and provide near-term to shareholders through the use of dividend cash to buy back 3 million total return swap shares over a phased period. We have improved earnings stability in the carrier fleet by placing a number of our ships on either fixed or market like traits. We've improved liquidity and put in place access to an immediate $180 million in credit facilities. On the back of Hilli success, we continue to build out our FLNG pipeline, and as a result, have investment interests in our already contracted backlog from a number of infrastructure funds that see value in our FLNG contracts. Operationally, on Slide 5, we remain on track to spin out our ships before the year end, supported by the new fixtures I mentioned and subject to visible improvement in the market continuing. On FLNG, Hilli has produced 25 cargoes to-date. The Gimi conversion project is on track from both common schedule point of view. I'll give a little more detail on the FLNG pipeline later in the discussion, and we have made good progress on the downstream LNG distribution activities in Brazil, through our Golar Power business following on from the targeted year-end completion of the Sergipe gas project. With these highlights, I'll hand over to Graham to take you through the numbers before having a closer look at the business sectors. Graham?

Thank you, Iain and good day, everybody. I'd like to start on Slide 5, second quarter 2019 financial results. Total operating revenues were down this quarter $97 million from $140 million in last quarter, due to the seasonally weak Q2 shipping market, as well as the impact of dry docking at four of our ships. Lower LNG demand in Asia pushed U.S. volumes into Europe and reduced ton miles, whilst, at the same time, softer gas prices and elevated vessel deliveries combined to ensure that demand for spot tonnage was matched by sufficient vessel availability throughout the quarter. Having said that, our fleet utilization actually increased from 51% in Q1 to 66% in Q2. The Time Charter Equivalent rates were still down because of the lower day rates. Total fleet TCE therefore decreased from $39,300 in Q1 to $24,400 in Q2, although this was significantly negatively impacted by the scheduled dry docking of four vessels that each spent a portion of Q2 in the shipyard and saving to and from the shipyard. The TCE for our TFDE vessels have therefore been reduced, as a result of time getting term from dry docks and cool down those dry dock in Q2 and also preparing for docking in Q3, where we have a further three vessels docking. Chartering vessels lead into dry docks also leads to idle time. The reduction in shipping revenues was the key driver behind the reduced adjusted EBITDA at $40 million in addition to a $3 million write-off an OneLNG balance in other operating gains and losses, as compared to a $9.2 million gain in last quarter, relating to the final settlement of the Golar Tundra terminated contract. We are reporting a net loss of $113 million in Q2, due in part to the weak shipping results and…

Thanks, Graham. So turning to Slide 11 on FLNG, our operations on Hilli are going well with 25 cargoes now produced an 100% effective up-time. I discuss with our customer on increasing throughput and potentially duration of the contract continue. We remain optimistic that we will have this resolved by year-end. Hilli is performing well and ready to accept more FEED gas with additional CapEx modification required. Our customer however, has a responsibility to provide us with the gas and sell the LNG product. We believe there's a deal to be done that extends the volume and the duration of the contract, but I hope to have more detail in the next quarter. The Gimi conversion project is progressing well in Singapore and we remain on schedule and on budget. Most of the major equipment has been ordered and the life extension work and fabrication of the sponsons is progressing well. And it's great to see that so many of the people working on the project from Golar and from our contractors have worked previously on Hilli and are actively incorporating lessons learned from one project to the next. Earlier that's what our FLNG business is all about. As we build the portfolio, we're thinking about standardization and continues to improve whether that is a conversion or in fact there's a new build. And this is important to customers, financiers, contractors and suppliers who all take heart from reducing the risk in these projects through standardized designs and repeating assessable formula. Our portfolio continues to evolve and we have a number of negotiations and active agreement now in place with parties that are interested in exploring multiple locations for FLNG vessels. This gives us confidence in our product and the competitiveness it can offer our customers. Our FLNG strategy has…

[Operator Instructions] Your first question today is from the line of Jon Chappell from Evercore. Please go ahead.

Iain I want to start with the LNG spin off, and I just wanted a clarification. So you say it's subject to market conditions, but what I'm trying to understand is it subject to equity market conditions? Is it subject to LNG shipping market following the similar seasonal path that it has the last couple of years? And what's the structure to look like that to kind of help us frame how that's going to be kind of stripped off the consolidated? Is this just going to be shares to existing shareholders or are you looking to raise additional funds as part of this process?

So I think the answer to the first question is, of course, if we've got very poor equity market conditions, it will make it more challenging and equally, if we don't see the recovery in the shipping markets that we are looking to that we're expecting, then that is going to make it more challenging. Those are the two main criteria moving forward. We haven't quite finalized exactly the structure moving into the next phase, but we still are considering bringing in another ship owner into the entity and then listing that entity separately.

Okay, that's helpful. And then my follow up question is on just general liquidity and how you think about your growth pipeline? Clearly there's a lot of different irons in the fire, whether it's other FLNG or the expansion of your downstream in Brazil, and you added 180 million in this last quarter. Are you still fully financed for the projects that we have line of sight on today? And how do you think about your liquidity availability as you pursue some of these other projects down into the downstream or the upstream angles?

Do you want to comment Graham?

Yes, so Jon with the - as you said we got some additional liquidity with this new product in the margin line the 150 million facility, with the settlement of million facility, the amount that we already funded into the Gimi project we are - have funded on Gimi and new projects going forward predominantly in Golar Power. There will be some limited amounts of CapEx, obviously it's only 50% will come from us and as we said in the release of some of the cash flow that’s coming out of the Sergipe power station and the Nanook will promptly go into funding part of that CapEx. But we're in a pretty comfortable position as we stand now. Yes.

Okay, I think so, Jon if I can just add the other message that we would give is that, you know, as we look to this FLNG portfolio, the clear message is that we are recognizing that to lift the next project, we are going to need some investment partner in the project.

And is that what you. I'm sorry to added to be, but is that what you meant by expressions of interest from infrastructure funds? You would use them as a partner to pursue kind of long contracted FLNG business.

I think so, yes. But there's two parts to that. We have infrastructure funds interested investing in our existing assets, if you like, existing contracted assets. And equally, we have infrastructure funds and the like interested in working with us in future projects and sometimes overlap. It's the same entity and sometimes they're different.

The next question today is from the line of Randy Giveans from Jefferies. Please go ahead.

A few questions for me, I guess. First, any updated status for Hilli Train 3? I know three months ago you were in some detailed discussions seeing how those coming on and is Train 3 FID a possibility by themselves. Or do you expect it to be paired with Train 4.

So we remain in discussions with Perenco, and I really think there's a will from both sides to find a solution. And in terms of - I don't think there's an FID as such - I mean, basically we're ready to go. We have a vessel that's able and capable of producing anything up to 2.4 million tons per annum now. And it's up to our customers to determine how much additional gas they want to commit to. And I think that's where they're obviously wrestling, is this what is that commitment level and is it - is it going to continue to be in line with the existing contractual arrangement we have or something different. We've got a really good working relationship with Perenco. But one of the things to bear in mind is that a private company like Perenco doesn't have any obligation or need to publish any information on their properties, assets, expenditure plans or the like. And unlike a listed company, they can change their minds about those development plans without having to consider disclosure obligations. So we sometimes struggle to get the full story out of what's happening. And until then, we've got something more from - say, I'd rather not say anything more other than that, I still remain optimistic that capacity will be utilized and we stick to our target hopefully something in place by the end of the year.

I guess from my second question, just looking at the stock price down more than 50% from this time last year, basically at a nine year low. I know you announced a small kind of share repurchase, but at what point do you just take it private or at least aggressively kind of repurchase shares? And why unwind the total return swap versus just buying shares in the open market?

I’ll let Graham comment in a minute, but as part of the unwinding of the total return swap is - we also recognize the complexity that we've managed to build into this business over the years and it's a direct consequence of that as part of it. If you think about it as a buyback, it's the first place to look. Graham, do you want to comment further?

Well, I mean, I kind of agree what Iain said but if you're buying back shares, the obvious thing to do is remove the TRS that does create earnings volatility with movements in the loss to market valuation and it creates cash volatility and price. The share price moves, moves up and down. So Randy you kind of said it was a small amount, I mean 30% of shares out is not huge, but it's not small.

That's fair. I guess, going forward, could there be additional share repurchases just using your new liquidity? Or do you - would you need further suspension of dividend?

Well, I mean, I think we take that decision as we go along. I mean, the primary focus for the liquidity that we have raised is to continue to invest and build out our business.

The next question is from the line of Chris Wetherbee from Citi. Please go ahead.

James on for Chris. Just wanted to touch on what you're seeing in shipping rate so far in 3Q. And if they're going expectations, essentially trying to get a sense of the risks to the market, not hitting expectations in the fourth quarter and a potential delay in the spinoff.

So, what I would say is that we've seen an uptick from the end of quarter two into where we are at quarter three is that this spot rate, if you like, is somewhere 50%, 55%, 60% in a day. And of course that, the big thing with that is how that translates into TCE and the other element being utilization. So from our point of view, we have taken six of the 11 ships that are in the Cool Pool and increase their utilization to 100%, ranging from two fixed contracts, one that starts actually early next month beginning in September, the other one in mid-October. And those are both at rates well in excess of the number I mentioned. So that's one indication that we've got of fixing of charters for less than a year for those two, but they're significantly higher rates. So that's one indication that rates are going up. The second indication the rates are going up and our TCE will increase is that we have four further vessels on variable rate contracts. So these are contracts where they are linked to the prevailing spot rate. And two of those four have got floor in ceiling elements and two are floating at a very slight discounted rate. All different structures, the markets keen to explore different structures. I think for me, that's another indication that the charters are expecting the market to be increasing or else they would just sit tight and take ships on the spot. So we have confidence that this thesis and come back to the whole story about the number of ships needed to raise and move the cargos that have come on and are due to come on, there's a shortage and we think for the next couple of years that will play out. And we still we are seeing evidence in the rate structures and the fixtures that we've done most recently that's holding true.

And then just at a higher level, I just wanted to touch on the lower gas prices and getting your view on what you're seeing in the end market in terms of incoming demand around new projects and just basically get a broader comment about that. Thank you.

The lower gas prices - if you're sitting with a big onshore LNG facility in the U.S. and you're trying to get a liquefaction plant going lower gas prices are going to be a bit of a challenge. But there's a couple of things on that. First of all, none of the major customers that we're dealing with these customers that I mentioned before, none of them would be relying on today's immediate spot gas price to launch a 20 year project. They're taking a long term view on gas prices and the amount of demand that's going to come into the market and therefore provide they drive it come in price. But secondly as we discussed with what we’re trying to do with Golar Power. The switching of coal, heavy fuel oil, marine diesel and diesel for transportation to LNG to gas will create demand way in excess of the current wave of demand which has been driven primarily by basically the Chinese switch from coal-fired power stations to gas fired power stations. So we believe that when that transportation light switch in addition to the power switch starts to come through the demand rate will accelerate and therefore more LNG will be needed. So you may have a short-term fluctuation with low gas prices but medium to long-term we still see the pricing will get into balance the demand that has to satisfy. And then the final point on that is our solution in FLNG is highly competitive. So if it’s one project it’s going to get away it’s going to be one with a goal of FLNG vessel stuck on the end of it.

The next question is from the line of Espen Landmark from Fearnley. Please go ahead.

Just a question on the liquidity I mean there is a couple of moving parts on the balance sheet after quarter end I know with the margin loan, the new facility and the netting of the TRS. I guess all those are meaningful numbers and then you pointed that the release of the Letter of Credit potentially is 75 million. So I mean how much of unrestricted cash do you expect to hold by the end of 2019 versus the 140 you have by June?

Yes, we don’t typically give out forecast of thermal cash balances but just refer to the answer that I gave earlier to Jon’s question that when - the TRS is kind of self funding because we just need 30 million in unrestricted cash and that's coming as we said from the next two quarters distributions. And so, the 180 million from the margin lower than the new facility is all available free cash and as would indeed the 75 million if we - reach agreement on that with Perenco in the next month or so, and primarily that cash, the existing cash will be going to fund Gimi CapEx and a lot of projects.

And frankly the new 150 million facility is that linked to Gimi in any sense?

No Gimi in terms of security or I think is net-net.

The next question is from the line Chris Snyder from Deutsche Bank. Please go ahead.

So you talked about progress being made in the downstream Brazil opportunity with first users online by Q2 of next year. So you have 100 million contract of EBITDA over the next 25 years from certainly and the NERC, but how should we think about the EBITDA upside opportunity here from the downstream and how quickly can we maybe see EBITDA go above that 100 million run rate?

So the way that we’re thinking about that is the buildup of the elements. So first, is get the customer’s lineup get them signed up. Second to get the gas supply get it secured, third make sure we got access to the infrastructure so as the containers are shipping, trucking then we have to do we know what the pricing will be at that point. Then we have to understand and learn about what is costing us to provide that and from that we’ll able to extrapolate what the EBIT projection will be in reality we got estimates obviously. And then from there we can link it through scaling of the business. So it's a bit premature for us to be able comment on the speed of ramp up of that business but what we’re hoping is that we’ll have customers online by Q2 next year and they will be generating EBITDA in excess of that 100 million. What I can’t tell you yet is how faster that will scale up because we're still working on the plan.

But you think maybe by we could be exiting 2020 and amount maybe meaningfully above 100 million?

I'll let you know when I know.

And then just following up on the Perenco negotiation question from earlier you guys said in the release you plan to complete negotiations by year-end. Do this mean that you would expect an agreement with Perenco by year end or really just have a resolution by year end good or bad. And we can maybe start marketing T3 and T4 to someone to size Perenco?

I can plan what my customers are going to do I just I am going to repeat the fact that we're ready willing and able whenever they are to accept more gas. But what I am saying from a timeline point of view looking at the way the discussions are going seeing the enthusiasm of both sides to get something done. We’ll have something meaningful to report before the end of the year on the capacity of the vessel for Perenco’s plans are to use that and how we see that developing over the coming years. So I don’t think I can say anymore than that, but I expect and I expect we will have some form of agreement in place at least for any initial change before the end of the year.

And you’ve kind of I think you’ve disclosed that the strength of the economics are pretty similar to train 3 economics are pretty similar to train 1 and train 2. You guys were negotiating with Perenco could the train 3 economics change to maybe you know persuade them a little more. And has the soft LNG environment kind of been weighing on the ability to get this done over the near-term?

Well, think about again I think I made this comment earlier so Perenco have the obligation to sell the LNG once we've made it for them. So part of their dilemma is clearly they got two Baxter equation one where they are going to get the gas flow and can we convince themselves what’s the volume and for what duration they can provide this by gas. And second who do they sell that gas to and over what period. And obviously if you’ve there is an existing arrangement that they have with their off-taker and we can play inside that arrangement if you like. And if you got to generate a new arrangement it might be more difficult with a little bit softer gas prices to get that going. But I think you know I'm repeating myself again but let's see what our customer comes back to us and as soon as we know something that is firm we’ll tell you.

The next question is from the line of Alonso Guerra-Garcia from Scotia Howard Weil. Please go ahead.

So you made reference to these new couple of permits in Brazil for Golar Power. It sounds like there's still some moving pieces there. What is the time line for advancing those projects, I guess, as far as finalizing the permit commitments and then transitioning those to FID?

I don’t think really exciting we have - we are well advanced with permitting and we’re probably a couple of years ahead of anyone else that wants to give permits there. So that's the first thing and we do have permits for the construction of an FSRU terminal obviously that’s the first thing. As you know Brazil and we’ve been reporting over the years you need a permit for many, many things. So it's part of a little factory that we go and Golar Power is the ability to navigate this is permitting infrastructure. But I think the other development I think is quite encouraging is that we're not sitting back and waiting for the winning of a power project as we did with Sergipe. If you remember Sergipe we won the power project and that underpin the development of the terminal. We’re looking at this slightly differently now because we've uncovered the downstream infrastructure opportunity. And we believe that we don't necessarily need to have that power station to underpin on one of the projects we have a major customer that might take some off-take to get the terminal going. And on the other one it could be a small power station, but on both of them we have the opportunity for downstream distribution. So I wouldn't be surprised in terms of your question on timing that we try and get one of those ways in FID this year or at the latest early next year, because we don't have to wait for a power station to get going in the infrastructure. These are incredibly strategic assets and once we there it provides us with competitive advantage.

And then if I'm not mistaken, this is the first time you've talked about Mark III and the potential for a 5 mtpa capacity. Could you talk about this new development and maybe what you need to get done with the Leviathan interim agreement move towards FID there?

So I mean, the only reason we called there Leviathan, and a name is because the developers, proposed developers, Noble Energy partners put out a press release, so we would normally have called that out. But with Leviathan, it's just a design case on our mark III redesign, which we’re currently undergoing a fleet and essentially by the fourth quarter we will have an assessment of the Metocean conditions, the process design, the cost and the schedule and we will be able to go back and see if our vessels competitive in that environment. So we'll see what that yields but that’s definitely in progress.

The next question is from the line of Ben Nolan from Stifel. Please go ahead.

This is Frank Galanti on for Ben. I wanted to ask about the - hi, wanted to ask about the two new projects that you called out in the press release will be on the call, and I know there's been a couple questions asked about it but I'm trying to get a sense for the - I know you're going about it developmentally in reverse relative to Sergipe, but what vessels are you looking at to be able to use to - for the FSRU, do you need something the size of the Tundra, or could you use something like the Spirit, because there’s 66% free utilization for the new currently - just trying to get a sense for which vessels would be used in those Brazil projects?

So I mean, the Spirit is a good example of something that could be suitable and Tundra also could be suitable. Obviously, we are currently marketing Tundra for other FSRU and terminal opportunities around the world. So it's almost a case of whatever comes first, but if you think about - right now if we did nothing else, we have two vessels, we could deploy immediately under those FSRU terminals. The way to think about is, let's get one going, see how that goes and we definitely got one of those vessels to fit that. I am cautious about predicting which vessel go away, because the FSRU business, as you know, takes an impossibly long time for tendered FSRU contracts to materialize into anything that's been our experience anyway. So we have the vessels. We think it would be a good place to put them to work.

And then more Brazil questions, on upcoming power auction, I know that’s in October release, do you guys have any update on that any new thinking in terms of what the implications would be if you won it and kind of competitive nature around that bid, if you can give any color that would be helpful.

So I guess, what I'd say is we've got two or three projects lined up. The great unknown with these power auctions is that you don't know the demand until very close to the power auction. So we’ve got different solutions depending on the design from different places. Obviously, with the Sergipe expansion we can be very competitive because we’ve already got the FSRU, but equally we got at least two other locations that we can look at from. So, I don't think there’s any more I can comment other than we've got several options to remain flexible and therefore competitive depending on what the demand scenario looks like when it's issued.

The next question is from the line of Ken Hoexter from Bank of America. Please go ahead.

On the FLNG, Iain, maybe you can just talk about why you ended the Delfin discussions maybe provide some more color on where that the comment you made?

Okay, so if you if you referred to the screening criteria that I mentioned and that we need high-caliber customers, you can reliably provide fleet gas and put together an uptick that underpins the financing of the project combined with co-investors to lift the project with us,. we just didn't feel that the Delfin opportunity satisfied those criteria. And as we previously said, it's really important for us to put our investment money in resources into the opportunities that have the greatest chance of getting FID.

And then just switching subject, you talked there were interesting investments, but only in existing streams or some infrastructure projects won some of the new ones, maybe just talk about from your perspective and you know, how is that different than what you set up with the drop on the GMLP, would you think about restructuring, you've got GMLP and maybe spin the assets off or income streams are off to the infrastructure partners. How are you stepping back and thinking about those kind of comments?

I supposedly really think, I mean, I welcome Graham’s comments this as well. But I will look at it and thinking we have these FLNG opportunities are lining out, the portfolio is developing really well and we’re acutely aware of our need for capital discipline going forward. And therefore, we need investors to help us or call investors us and it's quite interesting because the discussions that we’ve been having on the existing facilities projects that we developed, there’s a definitely a premium to come there. And I think if we can convert one of these deals, it'll show the market what other people think the value of maybe the Hilli, maybe they give me and maybe another project is been development and that's been developed is and that should give it a bit more clarity on to the value of these contracts. So the real driver for me is that we need the capital support to lift the project.

Yes, I mean, kind of echo that Iain, and if you think about it in order for us to grow quickly or quicker we need capital and we need that support. If you think about in terms of - I know it’s tough, bit of a bad memory but when Schlumberger, we have within one LNG and we set up Schlumberger on 50-50 basis and you know at that point we would have had 50% of every FLNG project going forward. And, but that didn’t really have any impacts necessarily on whether they were future drop-down potentials for the MLP, we just had 50% of three projects instead of 100% of one project. I am not saying 50% is the modus operandi. I'm just using that as an example?

Right. But thanks for that insight Graham and Iain. But maybe just to wrap up on that the first part of the question. Would you think about restructuring, how you’ve drop the assets to GMLP or is this kind of a go forward on future structures only?

I don't think, I think they are unrelated. There are separate discussion really, Ken. I think my focus right now on this is what do I have to do to get a project lifted. So we’ve got a good customer, there go an opportunity how do I get it going in from a financing point of view, equity - equity and finance. That’s my immediate focus. If we have the opportunity to do something with it around the MLP or whatever later, that for me secondary. We got to get the project going first.

Which may be of interest to an investors as well.

You mean the risk upfront?

No, no. The dropdown at the later.

The next question is from the line of Craig Shere from Tuohy Brothers. Please go ahead.

[indiscernible]?

I mean it’s an interesting line of discussion, Craig. But I don't think it's just not appropriate that comment on any aspect of the negotiation that we are having. I don’t want to - but I just don’t think that’s appropriate. To the impact, I mean, obviously we’ve got more utilization of Hilli that’s perhaps of more value but yes, I don’t think it’s I just can’t say anymore on the subject, sorry.

Okay, I understand. If I can pick up on the Brazilian downstream question. I think the original guidance was that there was up to $100 million investment opportunity that would generate perhaps three times EBITDA or better over time, is that still correct and would a similar investment opportunity be available from a second FSRU, FID possibly in 2021?

So I think you're referring to comment that was made in the last quarter's release, where we - I think we said something like where we - if we could get a dollar spread on each mmbtu of excess capacity that was put through then that we deal $200 million to Golar Power. I think that was - it was of that order. I think what - we're trying to develop the business and update it. So that's like theoretical. We haven't carried out any of these negotiations and figured out how much of a spread we can actually get, nor do we have yet good feel for the ramp up of utilization of that vessel. So rather than continue, I mean, that's a theoretical envelope, if you like. I think the opportunity scale set is probably similar in the other vessels. But what I'm saying is that it's far too early for us to talk about the rate at which we ramp that up to and we we're working on that detail obviously internally.

And last on the bill. The press release kind of suggested that maybe power coming online in January, is the stretch sort of still billable, how much could that slip?

Well, we've lost a little bit time over the last three months but mostly from several small issues that tend to happen at this stage of a project, and also more recently we've had some bad weather and it slowed down the final hook up. But the way to think about it, the effective way is that we've used up not all but most of the float on the project, which just means that we have a plan that shows to get to the end of the year. We've got less float, and it's just normal on this type of project. And so we got less slack to take kind of minor delays. And if there are any further delays, we'd expect them to be of a short nature. So, I'm saying days, not months. And it's too early to say if there will be any. The next phase is we gas up the turbines. We'll determine how smoothly they go. And if you've ever been involved around commissioning of a large gas turbine plant, anyone that would like to predict that to any degree of accuracy is a braver man than me.

The next question is from the line of Lukas Daul from ABG. Please go ahead.

Just circling back on the spin-off that you're sort of indicating could happen by the end of the year, just to be crystal clear, do you sort of intend to realize any cash proceeds from that? And do you have a ownership threshold that you would like to keep in the new entity?

I don't think we're disclosing any of that. We're still working on the structure. And obviously, when we've get that finalized that, we'll be announcing.

And then on Brazil, is the commercial acceptance necessary in order to - for you to start realizing that $100 million in EBITDA? Or is it going to sort of going to be triggered by the 1st of January date, no matter the gas flows or…

No, we have to be commercially accepted. So we've got very detailed plans and the steps that we go through to get the plant ready, and then we run out a short acceptance test at the end, that's fairly well known and understood process to go through.

Next question is from the line of Michael Webber from [indiscernible]. Please go ahead.

Just a couple of questions for you. Iain, just kind of big picture, I guess focus but if I just kind of think about like Golar from a 30,000 and you guys have mentioned the idea of finding capital partners for these projects, which is kind of the best way to approach them right now with kind of maybe more limited capital availability. But then there's kind of a separate conversation that involves kind of fixing the cost of capital so that you don't have to do that, because I know you ultimately don't want to do that. So if I think about kind of streamlining the Golar structure and the starts as they get the total return swap and the carrier spend would kind of be the easier and more straightforward part of that equation, the downstream business and Golar Partners with shares assets, they're going to be much more complicated. I guess my questions are; one, has the experience with the carrier spend and kind of how long it's taken for the market - it's a market dependent process. So has your experience of that, increased the likelihood that any kind of simplification of the Golar structure is more of a grand bargain than a series of these kind of transaction that could take several years? And then - I'll stop with that question there. I guess, in terms of - I'll follow-up, but just in terms of the likely sequencing for a simplification of Golar, is it more likely we see a series of these transactions, or do you think the odds have gone up but eventually with sort of kind of grand bargain transaction where you kind of simplify the structure and get in the place where you want it?

So, Mike, I guess the first part is the experience around the shipping spinoffs; it hasn't actually been that bad. I mean, what's happened is that we've had - one of the first questions we were asked on the call, we've had two things going against us; one has been the capital markets and the other one's be the shipping rates. And they've either been counter cyclic to each other or in violent tandem. And we think we're coming out of the end of that to allow this to happen. But in terms of preparedness, getting the financing set up for the ships, all of that has been ready. So from that point of view, that's okay. In terms of the other elements of the jigsaw puzzle, our focus in Golar Power, which is the obvious other one to discuss, is really on building a big sustainable business. And that's the immediate priority. And if we do that, and if we are successful in building the business to the extent that we feel we can do with the downstream infrastructure and with multiple hubs for FLNG and gas distribution, then I think that'll be a nice discussion to see who the logical best owner of that business is at that time. But right now, our focus is we've got rebuild it rather than worry too much about that part of the future.

So more likely to see a downstream spend before like a GMLP simplification?

I don't think we've commented too much on GMLP simplification. What we have said is our Board has definitely approved spinoff of the ships and it's my intention to make that happen.

And just to Delfin, and I think you mentioned it a bit earlier in an earlier answer. The idea of kind of moving away from that project, did the current trading tariff situation play any kind of role and that's just in terms of the viability of the package deal with the Chinese yard export financing and offtake and kind of the value prop that I think most people associated with the project like Delfin?

We just didn't make enough traction around the two critical customer and financing elements. So our portfolio is really coming along nicely and we've got to drop off the ones that we don't think are going to get there in the near term.

The next question is from the line of Eric Haavaldsen from Pareto Securities. Please go ahead.

Just a quick one on the new $150 million facility. What's really the rationale behind you taking up that facility? And what kind of facilities, what type of funding?

The rationale is to give us a comfortable amount of liquidity to cover our Gimi CapEx and other things that we want to do over the next few months, just to put us in a comfortable position. What was the second part of the question?

Is it a bank facility or is it additional lease…

Yes.

Yes, it's a bank facility, okay.

The next question is from the line of Jason Gabelman from Cowen. Please go ahead.

I just wanted to go back to this discussion on our LNG rates. Given that the LNG market is oversupplied and the expectation is it's going to be oversupplied for the next couple of years outside of kind of seasonal demand peaks, it seems like [east harbs] could be closed especially outside of winter. How does that mindset kind of figure into the decision to spinoff the LNG carrier business? And I think you mentioned potentially listing it as a separate public entity, I mean, do you think that makes sense given potential - for rates to be volatile over the next couple of years?

So first point is, we don't necessarily show you a view that the rates are going to be poor over the next couple of years. There may be volatility, but we think because of the structural shortage of cargoes that need to be moved and ships that are available, noting that there are only so many deliveries due to come out of the yards. We will see this deficit, and that will force the rates into a more acceptable position. And the justification for us making this split, as we've said before is that we have some investors that really like our long-term sustainable EBITDA business with the 20, 30-year contract. And they don't like the fact that they have a cyclic shipping business associated with it. And equally, we've got investors who would like to invest in the shipping business and have exposure to the things that are coming up. But they see that we've got these fairly large capital intensive projects on the other side of the ledger. And the very strong feedback that we've had from the investment community is that our view to split the two is a sensible way forward.

And then just a quick question on the financials. It looked like there was a large cash outflow on accrued expenses that was about $60 million. What was that related to?

Yes, unfortunately, our customer statement is - you'll note from a few quarters ago that it reconciles from total cash, including restricted cash at the beginning and the end of the quarter. And therefore it includes a load of restricted cash movements that are in these verbal interest entities that the Chinese leasing bank subsidiaries that we have to consolidate, and we cannot give that information. So that particular movement related to a movement in restricted cash balance in one of those VIEs, not all of it obviously, but the majority of it. It's not a real movement, which just makes that statement not particularly helpful, but …

Thank you. And there are no further questions at this time, so I'll hand back to the speakers.

Thanks, operator. Well, I hope this session gave you some detail of our focus on simplicity, earnings, stability, liquidity and near-term value for shareholders. We can follow-up for more discussion via Stuart, the normal way. But in the meantime, I thank you for your attendance and questions and we look forward to updating you on our progress next time. Thanks and goodbye.

Thank you. That does conclude the conference for today. Thank you for participating. You may now disconnect.