Ladies and gentlemen, thank you for standing by, and welcome to the New Fortress Energy First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Josh Kane with Investor Relations. Please go ahead.

Thank you. I would like to welcome you to the New Fortress Energy first quarter 2021 earnings call. Joining me here today are Wes Edens, our CEO and Chairman of the Board; Chris Guinta, our Chief Financial Officer; and Ken Nicholson, Managing Director of Fortress Investment Group and CEO of our new hydrogen venture. Throughout the call, we’re going to reference the earnings supplement that was posted to the New Fortress Energy website. If you’ve not already done so, I’d suggest that you download it now. In addition, we will be discussing some non-GAAP financial measures during the call today. The reconciliations of those measures to the most directly comparable GAAP measures can be found in the earnings supplement. Before I turn the call over to Wes, I would like to point out that certain statements made today will be forward-looking statements including regarding future earnings. These statements, by their nature, are uncertain and may differ materially from our actual results. We encourage you to review the disclaimers in our press release and investor presentation regarding non-GAAP financial measures and forward-looking statements and review the risk factors contained in our quarterly report filed with the SEC. Now, I would like to turn the call over to Wes.

Great. Thanks, Josh, and –everyone. As Josh said, that we posted the supplement to the webpage, that’s why I refer to as we go through it. So let’s jump right into it and go to the Page 4. The quarter that just ended has been a historic one for us. It’s been an incredibly busy quarter and a productive one. We completed the acquisition of the Hygo company from Golar, as well as the MLP that we bought at the same time $5.1 billion we did not issue additional equity. It grows our base of operations dramatically. And I’ll talk about that a lot down the road. Very importantly is that the growth of the company that we now envision, we believe can be internally generated, the equity that we need to grow the company we can generate from asset sales and I’ll talk about that. We expect to close our first asset sale here this quarter. And with this the total summation of all this activity, this does firmly establish this as the leading LNG to power company in the world and put this wall on our path to kind of our growth targets we’ve talked to you about before. Meaning in very simple terms, the way I think of it is the combination of number one, the terminals that we’re acquiring in Brazil, which we think are extraordinary footprint in one of the fastest growing countries in the world. Number two, the impending turn on of our terminals that we’re building in the La Paz andNicaragua both of which we expect to be operational in the next 60 days or less. Number three, the addition of all the logistical infrastructure that we need to make this all happen. So the ships and the FSRUs and all the equipment…

Great. Yes, happy to do that. Thank you very much, Wes. It’s Ken Nicholson here by way of a quick background. I’ve been working with Wes here at Fortress for just over 15 years. We’ve invested over $30 billion in infrastructure, transportation and energy companies. And I’m thrilled to be helping to lead this new venture at NFE. I think we have an enormous opportunity in front of us to make some highly compelling investments and at the same time, do a very good thing for the environment along the way, and I’m excited to join the team. I’m going to go to Page 18. Our goal is to make these two investments that Wes mentioned immediately. To do that, we’re forming a new joint venture with FTAI that will combine NFE’s development and technology know how with FTAI’s transportation experience and infrastructure assets. FTAI provides three critical needs. One, efficient logistics for feedstock supply. Two, access to land in key markets. And three, immediate access to low cost tax exempt financing that enables us to find our investments quickly and efficiently. The picture on the right side of the page is an image of FTAI’s terminal in Beaumont, Texas, which is the site we’re planning for our first two investments. I personally have been deeply involved in the development of Jefferson. It’s an incredible terminal with connectivity to all modes of transportation, plenty of space for additional development, and the track record of obtaining extremely low cost financing in the tax exempt markets. Flipping to Page 19. As Wes said, we plan to be in a position to reach FID on our first two projects by the end of this summer. One project that produces renewable diesel and jet fuel, the other that produces carbon free hydrogen and ammonia. For both of the projects, the technology is well known and readily available. As it’s the feedstock, we’re now focused on securing the offtake for the projects, which we expect to do in the coming months. The box on the right illustrates the attractive economics around these investments, each project represents capital costs in the range of $200 million to $300 million, and after a roughly 24 month development timeframe should generate annual cash flows of $50 million to $75 million. As I said, we expect to finance both projects largely with tax exempt debt requiring minimal equity investment, which should in turn result an extremely attractive equity returns. Finally, to realize that value creation, our goal will be to separate Zero Parks ultimately into a standalone public company through an IPO of the business.

Great. Back on Page number 18, we look at the – the Jefferson terminal. Ken is actually being quite modest here, when we first got involved in this terminal. It basically was a muddy piece of ground, a 100% of what you see represented in that picture. He oversaw the development of and when we looked at getting into the fuels business, of course, the most obvious place to start with a fuels terminal, because number one, you need all the logistics on either side of it. Because you need to bring things in, so you can actually create what you’re going to create and then bring things back out fuels terminal actually accomplishes that. Number two, you need the access to the lands, you have enough space to build what it is that you intend to build. And we have a substantial amount of land, both after development and adjacent to development, which is great. And number three, it’s a bit of a superpower is that the ability to finance yourself on a tax as employerbasis. So we have done a number of tax exempt financings on this development. It’s a tried and true methodology for us, it allows us to in a fairly capital light manner, be able to turn these projects into a reality. And as Ken said, our goal then is if you’re a NFE shareholder on the phone here right now, our goal would be that you – for every NFE share that you get, you essentially get a share of this company as well. And I think that the impact of this the economic impact to shareholders could be material. When you look at the sustainable projects and companies that are public right now, the vast majority of them are not economically based. So…

Yes. Thanks, Wes. Good morning, everybody. I’m excited to provide an update on our business and financial results for the first quarter of 2021. If you turn to Page 21, and taking a quick look, this is our familiar operating statistics summary, which demonstrates the business’s strong track record of execution. The key take away from this page is that we continue to execute best in class operational performance and service to our customers, while maintaining a focus on safety and reliability. Also as we continue to be a global leader in LNG truck and ship transfers, and we’re eager to step up our activities later this quarter as our terminals in Mexico and Nicaragua come online. In a moment, I’ll talk more about the financial performance during the quarter, but one key data point that we’re tracking is our maintenance outages, which are estimated to be within 5% of our expected downtime. This exceptional operating performance is a direct result of the continued hard work and tenacity exhibited by our team. As a company, we’re expanding rapidly with over 600 employees now quickly approaching 1000 by the end of the year. Our world class team of professionals now spans the globe and is helping to accelerate energy transition on five continents. If you turn to Slide 22, I find this is a very helpful page that demonstrates what Wes was talking about earlier. Once our infrastructure is in place, the ensuing cash flow is right around the corner. Sometime in the second half of 2021, we will have all six terminals fully ramped, which sell around 3 million gallons per day. These terminals will produce approximately $600 million of operating margin and combined with the margin from the shipping fleet, NFE generates over $900 million in operating margin. Moving…

Great, that’s the end of the prepared marks. So operator, let’s open up for questions, please.

[Operator Instructions] And your first question comes from the line of Alonso Guerra-Garcia with Scotiabank.

Hey guys, good morning. Congrats on the on the Zero Parks JV. Understand this opportunity is much more near-term in regards to what your zero division was looking to accomplish previously. I wonder if you can elaborate on your first two projects there? Well, both of those projects leverage that infrastructure at the Jefferson Terminal in Beaumont. And I guess, what sort of line of sight do you have to additional opportunities beyond these two projects?

I’ll let Ken answer specifically in a second, but the answer specifically is that they both leverage greatly the existing terminal. So we think the renewables project, the focus for us right now is on feedstock. So finalizing feedstock arrangements and figuring out how to get them into the port, obviously, what you have at this terminal are rail lines, pipelines, so there’s truck lines, there’s a lot of different modality forms that come into the terminal that bring stuff in. And then once you create your fuels, they need you to ship it out like any other fuel, whether it goes out in a pipeline or it goes out in a barge, it goes on a truck. So it absolutely uses the infrastructures in place. And that’s why such a critical part of it. In terms of the timing of it, Ken.

Yes, I think we’re confident by the end of the summer. We’ll be ready to go and be FID on both of these projects. You also asked I think, what the pipeline was for additional projects. I mean, I would say right now, we are evaluating in the double digits north of 10 individual projects. The first two are very near-term, but we do expect to do several of these things over the next six to 12 months.

Yes. Clean and renewable fuels less than 1% of the entire fuel spectrum, 99s a long ways to go. So there’s a very, very long list. The power of proof-of-concept is very, very strong. And so actually getting to FID, getting our construction, getting fully financed is a huge milestone, a huge step for any company, but especially company in a new sector like this. So we think that that actual will catalyze all kinds of incremental opportunities.

Got it. Great. And then maybe one on the terminal side, notice the Southeast Asia is marked with first gas for September this year. Is that project under construction at this point, I guess, what’s left to do there and any update on progress with Shannon.

On the Southeast Asia, we’re making great progress on the agreements in place, we haven’t officially announced, that actually continues to move very well. The initial gas that will come existing power plants. So that’s why the timing is – in between final commitments and actually the first gas is a relatively short period, because there’s a very straight pole just to bring in gas for the first terminal. Then down the road, there’s expected to be additional power built and a more permanent put in place. That’s that. On the Shannon, Ireland, we continue to make great progress. I think that, our goal is to file for permits here in the very near-term. We think that the characteristics of that terminal will look quite similar to the terminals in Brazil, and it’ll be hook directly into a very, very well developed pipeline system. And so it’ll have the profile of higher volumes, such as we have expected to get in Brazil, lower margins, but on balance a very, very attractive proposition. So we don’t have a final date of FID on that project in Ireland. And we won’t have that until we actually file officially the permits, but expected that’s coming in the coming…

Great. Thanks, guys. That’s all I had.

And your next question comes from the line of Sean Morgan with Evercore.

Hey, Wes. Just a quick question on Brazil, when we look at the volume opportunity in Sergipe, which my understanding was Golar kind of had that up and running. It’s obviously smaller than some of the opportunities seeing in places like Suape. And so for those of us that aren’t that familiar with the Brazilian market and kind of the coastal cities and regions there. Why is that there’s like a smaller footprint opportunity in the existing terminal? And then what else can be done to sort of grow that, because from my understanding, it’s already somewhat established?

Yes. So it’s a really good question. So big picture, Brazil’s roughly two-thirds of the population in the United States uses about 5% as much natural gas. So the biggest of the big picture, as we think the opportunity in the country is gigantic. It is service by two pipelines that run up and down the East Coast. They stopped short of Barcarena. So the Suape, Sergipe and Santa Catarina are all on pipelines that are significant pipelines. And so to a large extent, it’s just a geography question of like, what user is closest to which of the terminals, because there’s somewhat ubiquitous with respect to, where you connect on that. The volumes that we expect that are significant out of the pipelines are really anchored it either end by Suape and by Santa Catarina, but they could also be serviced from Sergipe as well. Assuming the Sergipe Terminal has been connected to the pipeline. It’s about a 30 kilometer pipeline poles as a fairly short and straightforward pole from Sergipe into that pipeline. And then you can send gas either north and south depending on what you want to do. With Sergipe itself, specifically, right now, the volumes are relatively low, because the nature of the contract is one that does not really allow readily for merchant business. So what is – we get a significant capacity payment, and then there’s a 60-day window, they have to provide notice for you, in order to be dispatched. So it’s really intended to be a backup power generation source, which I think really under utilizes the assets significantly. In a country that actually has significant needs of power production on a daily basis. We have 1.5 gigawatts of power, that’s expected to run a fairly small amount of the time. That’s what the volumes are small there. So one of the very first things that we are doing with the technical teams there is evaluating what we would need to do to bring that into a merchant power production as well and thus generate a lot more volumes and a lot more revenue as a result. So there’s a lot more on that to follow. But I think the Sergipe Terminal is really two things. It’s one is that 1.5 gigawatts shiny new beautiful power plant. And it’s also a possible pipeline connection that would connect into the pipeline. It’s the same pipeline that is hooked in Suape. So…

Yes. That’s helpful. And then on the last quarter, I think everyone’s kind of aware that gas prices saw pretty aggressive spike there at the end of really the start of the last of the first quarter. So I get the gas costs kind of going up, but what the cost plus contracts in places like Puerto Rico and Jamaica. Why don’t we see that? The volumes are somewhat consistent quarter-over-quarter. So why don’t we see a bigger bump in revenue as that gas pass through commensurate with what you saw in COGS?

Hey, Sean. I mean the short answer is that we’ve already purchased for LNG prices. So we knew how much we needed and we bought it in over the course of the end of 2020. And so in the market seeing new LNG supply at all during Q1. We aren’t really in Q2, we have maybe two cargoes in that. So we would need the rest of the year. So we have a pretty known cost of LNG for the remainder of 2021. And as we talked about before, we’re largely purchasing the Caribbean Basin for 2022 plus, and have a little bit of exposure still in the Pacific Basin for 2022, which we intend to use FLNG to supply.

But you’re protected as a company in that about 75%, about three quarters of our contracts on the offtake side are also indexed to Henry Hub. So where we are indexed on the supply side, we’re indexed on the other side of it. It does I mean that it’s interesting. It’s a good question, though, and that gas prices definitely went higher both on LNG as well as on Henry Hub over the course of the – especially in the last month or so. And it does really underscore this point of the FLNG. So to the extent, we can really successfully deploy those assets on largely fixed price gas. We have changed our operational risk perspective dramatically. And also we then have the potential of offering more certain prices to our customers, which I think can have a huge impact in terms of some of our downstream uptake. So it’s more to follow, but it’s all good.

Okay. But just to clarify some of those contracts on the revenue side or more Henry Hub base, which we did see was kind of stable versus your COGS, which are bought somewhat in advance, but in the spot market on a deliberate LNG basis, there’s going to be more variants there. And that’s why we saw that kind of margin decrease a little bit in the quarter.

But as we’ve said, Henry Hub is a direct pass through. So Henry Hub – we buy Henry Hub plus we sell at Henry Hub plus in the contracts in the Caribbean. Going forward, we would expect to be able – what we want to provide is clarity and visibility into our cost of LNG, which then gives you confidence in the margins that we’re projecting.

But in any change in margin, really, it was just – that’s just the timing perspective, there’s not really a material risk factor for that law. And it should really work itself out quarter-over-quarter.

That’s right. And we forecasted the increase in LNG costs for Q1 versus what we experienced in Q4. And that is the biggest component of the margin change.

Okay, so maybe just a little volatility in the quarter there. All right. All right. Thanks, Chris.

And your next question comes from the line of Devin Ryan with JMP Securities.

Okay, great. Good morning, everyone. Maybe I want to start coming back to the JV with FTAI. I’m sure I’ll get some questions from investors since I covered that also. Just love to maybe get anything more you can provide around just the structure and split and how capital investments and economics will work in terms of what you will provide versus FTAI. And then it sounds like there’s a number of projects, potentially behind the two that are about to going to FID. So I’m just kind of curious around the development timeline more broadly. And kind of thought of kind of what it would take for this business to be ready to be split off or taken public.

Yes, well, the relationship with FTAI one that will be formalized during this period when we go FID in the first two projects. So the specific answer is that we’ll have great clarity on that when it’s finalized over the next 90 to 120 days. We started LOI with them, that is conceptual. And the concept would basically be they provide land, and they provide access to their terminals and operational support. And we provide all the technical and commercial activities. And our estimate today is that the appropriate split of the company would be 75% for NFE, 25%, for FTAI. That’s rough justice for what we think is being contributed either side. Once that number is established, and we have agreed on it, then the capital provided would basically flow commensurate with that. So if it was 75% with us and 25% for them, and there was $100 of capital needed, you would split along those lines. So that’s something that is yet to be determined. But I think that I expect that the final numbers to be along those lines. And we think it’s a – we get great benefit by being associated with these terminals, because we think that it’s actually meaningful logistics and land and access to capital, they get great benefit from our operational and technical teams and commercial teams. And so the two of those, that’s a that’s a fair transaction. We think that has the makings then of a public company. That is a very, very exciting one. And we’re talking earlier and looking at the different estimates of what we think this could be worth. Again, when you look at the clean tech universe, there are very few examples of companies that are actually commercially viable produce significant amounts of cash flow,…

Yes, that’s great color, Wes, and definitely interesting. Maybe just for the follow-up kind of a high level question, so I think the vertical integration with the Fast LNG is incredibly disruptive. And now that it’s been out there for a couple of months, in terms of when you guys started talking about this. I’m just curious kind of what the market reaction has been and how that maybe is impacting potential additional deal flow coming to NFE. And if there are other markets that are kind of interesting, where kind of the arbitrage opportunities is most compelling, I’m just kind of curious that I’m sure this created some reaction in the market, just given the kind of disruptive nature of it and love to just maybe get a little color on maybe additional opportunities that are coming about as a result of it.

Yes. We have a very active dialogue with a number of upstream providers, right. I’d say that, especially the deep water solutions, which are going to be more technically challenge – are definitely the most lucrative or the ones that long-term payoff are the most values, because when you are far offshore, and you’re producing oil, and there’s associated gas with it. There’s not really much to do with the gas. You have to build material amounts of infrastructure and a pipeline to take it to shore, it takes a lot of capital to do, it takes a lot of time to do that. So that’s the place where gas is re-injected, or it’s flared, or it’s really viewed as a liability not an asset, that’s clearly going to be where we’re going to find the cheapest resource, and have the biggest impact. But even in the onshore basins and from that map, you can see there is many of those around the world. And there are similar situations that occur there as well for gas as either being flared, or it is being re-injected or it’s not commercialized. And that’s where we really want to play apart. I think in the short-term, I’m very focused, we’re very focused on getting proof of concept of the infrastructure deployed. So we’re looking at what we think are some kind of shorter cuts and easier transactions that we think will be good representations of what the production might be. But there are many, many offshore upstream opportunities for us to be a partner of and we’re talking to a number of the firms. It’s also very good timing, and that many of the oil majors, independent oil companies are looking to divest assets are looking to commercialize them in some way, shape, or form. And so there’s a lot more to come on that. But this is without a doubt, my single biggest focus on a daily basis. And we’re only showing a $2 as margin expansion for one of these projects that we think the upside could be materially higher than that. But that’s a good representation as the 350 versus 550 kind of numbers that’s in our financial projection on just the first of these. As I said, if you look at that, that one page, if you took the – all of our production, you replace it all with FLNG at $2 generates $1 billion incrementally, at $3 or $4 it’s obviously even higher than that. So the impact to us on an earnings perspective is potentially very dramatic.

Yes, appreciate it. Okay. Thanks, Wes. I’ll leave it there.

And your next question comes from the line of Spiro Dounis with Credit Suisse.

Hey, good morning, everybody. First question is a two part question on zero parts. First of all, can you talk a little bit about what your target customer base looks like and what your unique offering? Is it seems like either at FI or NFE, those kind of found an edge or way to develop a better mousetrap curious what that is here. And then on contract structure, you anticipate this being a fee based business with long-term contracts similar to NFE or something else.

Yes. Hey, Spiro, I mean target customer base in the renewable fuel space is just about everything. I mean the products are immediately interchangeable and immediately replace any fuel the technologies that where we’re likely going to be announcing take multiple feedstocks and produce anything from renewable diesel, automotive gasoline, jet fuel. So it’s a broad, broad customer base. I think for the blue ammonia, the broad – the biggest customer base is the shipping market. Ships today consume practically no renewable fuel over the next 20, 30 years, that’s going to transition to over half of their fuel needs being from renewable sources, at least according to the IMO standards that are being implemented.

Got it. And on contract structures is something that – if you based in long-term or…

Yes. No, no, absolutely. I mean fixed feedstock supply, with guaranteed pricing and off take. And to the degree, we’re selling some of the supply out to the fuels markets in the event, so some of that you are a price risk taker. But at the same time, you can enter into a variety of arrangements to kind of effectively, synthetically fix that price. So, yes, largely a fixed cash flow business with upside as you grow volumes.

Got it, perfect. That’s helpful, Ken. Second question just on asset sales, Wes, you mentioned zeroing in on one soon. So curious if you’ve got an updated sort of target amount or asset sale figure that you expect to sort of close on this year?

Yes, we’re actually quite close to finalize in the first of these and the second one is in progress. I think that in our base case numbers, we think it’s between $600 million and $900 million in asset sales. So there’s substantial numbers. And one of the things that we are going to work on is a way a representative or financial statements that are actually accurate, because the accounting standards for sale leaseback have changed dramatically in the last year or so. So and we want to conform this and show I mean, I have a very simple financial metric that I think of as the money. And we’re – when you get cash flow from these, and you don’t pay tax on them, because they’re a financing, it generates a certain amount of capital, how best to represent that. I mean in the past, the real estate businesses and whatnot have used measures like FFO or like cash available for distribution or whatever. And so we need to come up with something I’m not a big fan of non-standard accounting measures. And so that is one limiting factor. But by the same token, you’re going to get a substantial amount of liquidity and cash flow from these asset sales. And they’re going to be sold, I think on balance at prices higher than what we paid or created them. And so representing that fairly is something that, that we need to do some real work on. But you’ll see some gain, that we think that the end of the day are kind of base proceeds number up the middle for us is around $900 million. The basis of those assets that we are potentially selling is about $350 million less than that. They won’t show up as an operating gain, nor will we pay tax on it, but it will show up as in the register. So we just have to figure out what the right way is with our finance – with our accounting people and then work with you also make sure that we represented your models correctly.

Got it. That’s helpful. One last quick clarifying question, I think in a previous question, you’re asked with respect to zero parts becoming a standalone company. Are there any sort of specific major milestones you need to see before, I guess starting that process? I don’t know if it’s a specific EBITDA amount you need to get to or maybe it’s something well absorbed before that?

No, no, I expect that we will actually create a separate public company for us really the minute that we’re FID on these two projects. So when we can says we’ve got 90 to 120 days is what – its an aggressive, we think achievable goal, given where we are today on both of these projects. And then we would look to have that be a capitalized and on – and suffered loud immediately. And there’s a number of different forms and ways that we could achieve that. But we actually are working on that now. So that’s not something we will wait to do until then, but actually take that down the past. We end up with something. I think getting that as a standalone company giving us an identity, getting the shares directly into the hands of the shareholders. Those are all the right objectives. And I’m very focused on doing that in the near-term, because I think that’s the right thing to do.

Got it. Very helpful. Thanks for the time today, guys.

Your next question comes from the line of Ben Nolan with Stifel.

Thanks. Hey guys, I wanted to shift the bucket to Brazil, you guys about FID on the three incremental projects there and appreciate that sort of your internal investment decision. But are there any hurdles or anything that needs to take place with respect to regulatory or commercial before you actually break ground and start spending money in that kind of thing.

No, it’s actually the – we’re very fortunate the team that we inherited, we bought the company that Golar assembled is incredibly capable. So we had the whole squat up here Monday and Tuesday, Ben and basically what we’re looking to do is marry up kind of our expertise and our operating experiences with what they have been doing. And I think on balance, I’m very, very pleased with what that group has accomplished thus far, kind of where we are. So Barcarena where EPC designed in the next handful of days, that is actually very much in production. Suape like finalizing agreements with the port moving the PPAs into Suape and converting them from diesel to natural gas that’s something that obviously the government’s very, very supportive of. Santa Catarina, we are deep and conversations there. That is something that is a very straightforward development. And we expect to sign EPC on that in a very, very – as well. So they’re always permits and processes to go through. I’d say unbalanced, given our experiences, I would rate these very low, where they are right now. And the timing to accomplish may appear to be aggressive when you look at Q1 of next year. But really you have to backtrack several years to get to where we came to honest. So these were years in the making, productively moved along, great technical teams at each one place. So I feel very confident that we’re going to hit these timelines. And really the commercial side of that Ben we have just scratched the surface of. I mean we just really have barely started to really go after an aggressively commercializes that. I’ll be in the north of Brazil on Sunday. And we’ve got – we think some really, really interesting things there. We signed up the LOI on that first terminal with Norsk Hydro, but that is a – that’s the mouth of the Amazon River, the Amazon River has gigawatts of power. It’s the highest power prices in Brazil. They are all heavy fuel oil and diesel base. So I think it’s got potential economically to be tremendous. And you’re also de-carbonizing power in the Amazon. I mean that’s winning, right. That’s the best thing you can imagine. I think that the commercial activity will follow, I think you’ll get a lot of updates, in terms of announcements on things that are going on there. There’s big commercial groups that are down there. But we know that as projects get closer to completion, that’s when the commercial activity really ramps up, that – effectively that’s what happened to us in Mexico, right. So we’re very, very close to it to now being completed in La Paz. And it’s not a really surprise that’s actually what was – the CFE showing up and signing the contract with us and looking at other opportunities there. So commercially, this stuff is going to be I think extremely, extremely productive.

Okay, great. And then shifting to the other side of the equation a little bit on the FLNG side here sort of getting closer to commercial agreements, are those – I’m curious, are those on a fixed gas price basis? And the reason I asked there is a lot of places don’t like to give up upside economics, especially developing markets. So I’d like to give up upside economics are rethinking really fixed price, or there’s drove an excellent part of that equation.

Yes, you’re 100% right. I think they don’t but of course, for the most part, they’re very focused on the oil right, a lot of these cases associated gas is a byproduct of it. And I think that in the end, there will be a number of different structures there. My goal is to end up with as much certainty as possible on the gas price that’s good for our core business and is good ultimately for our downstream customers. And so that’s obviously the goal, but there can be many patients of what that looks like. And probably at the end, it’s – there’ll be some combination where you’ll have some fixed pricing, you’ll have some indexation. And but unbalanced, I think it’ll tend more towards the fixed price side, just given the nature of the resource that we are extracting. Look I think the other material factor for a lot of the resource extraction is we are not just a resource extracting company. We are a problem solver from the power side, because really all these countries in some shape or form want incremental gas, want incremental power onshore. And that’s something we can also accommodate and do in a very, very competitive and expeditious way. So I think there’s a lot more to come on this. I think the reality of having the first of these is something that we’re now kind of really like seeing the benefit is with our conversations, but we’ll get the first one deployed, and hopefully, there’ll be a lot more to follow.

All right, sounds good. Appreciate that. Thanks, guys.

And your final question comes from the line of Craig Shere with Tuohy Brothers.

In question, Wes, can you talk more about the – or Ken, can you talk more about the technology used for carbon sequestration? And are you working with chart on that as well?

No, not specifically working with anyone. Yes, in particular, there are multiple technologies, some that sequester the carbon in terms of carbon capture, and some that actually capture the carbon and convert it into usable products. It’s the ladder that I think is actually more relevant for our first project. Pretty interesting technology is continuing to emerge, but actually pretty straightforward process. But I think it’s more likely on the carbon capture side to be a technology, where we both capture the carbon and actually convert it into something that is usable and has market value.

Yes. I mean there’s obviously a huge focus on carbon capture in Houston, Texas, right. So type of big oil companies down there, there’s a lot of interest in trying to be a part of it. I think the most straightforward use of it is to – use it underground. But I think that that really undersells what the benefit of it. The CO2 itself is a very, very useful product in pure form. You can create lots of products for it. There’s lots of things that you can do with it. And so we’re much more focused on that. Because that we think that that’s another incremental part of the value chain that you can capture. But there’s – there are many, many different folks that are looking to participate in that, that have a lot of expertise in the upstream businesses that we think are good folks to talk to. So that that’s part of the process of going in finalizing that on the technology for our first plant here over the next few 90 to 120 days.

Great, thanks. And one last one, on Fast LNG, where are you in terms of procuring additional oil filled infrastructure with the use of semi submersibles involve any greater complexity than the liquefaction at top jack ups. And now that the market knows what you’re using it for is the pricing starting to change?

Well, the first two rigs we bought paid a total of $31 million to rigs, the new cost just over $0.5 billion. So we say penny is in the dollar is literally penny is the dollar, what they are, and there’s – with all that has happened in the world, there is an abundance of offshore infrastructure, which is available, and basically scrapped values. And so that’s a good thing. We focused on the jack up rigs, because we think that that’s just an easier installation the first time around. As I said earlier, it probably is not the highest value when you compare it to some of the offshore opportunities, but it’s still a substantial value. And so it’s a good place to start. Then the semi submersibles are the deepwater stuff, that’s where I do believe that the greatest benefits will be, because that’s the so many times if you want to make a great fortune, find a big problem and solve it. And the offshore gas is a big problem. I mean offshore development focuses on the oil, the gas, and the infrastructure that is needed to deal with that is takes a lot of capital, which is not that available and a lot of time. And so this is a big solution for it. And but our technical team, which is a very, very capable one. They think that the offshore installation is very much will follow the same pattern. So the modularization, if that’s a word I might have made that up, but I mean modularizing the liquification gas treatment, all those things and making them fit into smaller spaces. That’s my – description for what these guys actually do in a very, very – that works the same on the deck of a semi submersibles on the deck of a jack up rig. So a lot of those things we think obviously morning systems how it all connects and whatnot there’s different things you have to account for. But we very much feel like the application will work in both shallower as well as deeper water eventually.

Thank you.

I would now like to turn the call over to Wes Edens for closing remarks.

Great. Well, thanks everyone for dialing in this morning. There’s a lot going on. And it’s fun to have a chance to update you. And as I mentioned earlier, I think we’re going to have a road trip sometime this summer. And I think it’ll be fun to get people give them a chance to see some of our operations in business. I mean we’re a busy operating company today that is transitioning from this development company to operating company. The pace of that is going to intensify as we now open these new terminals in Nicaragua and in Mexico. And I think it’d be a great opportunity to get people in front of it and have a chance to interact with our operational folks and see what’s going on. We’re very, very happy with kind of what is going on down there and be great to share it. And I think there’s a lot more to follow on, on all these different fronts, but thanks very much for your…

This does conclude today’s call. You may now disconnect your lines.