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1 | 2017 1 | 2017 2018 | 1 Company Presentation January 2018
1 | 2017 1 | 2017 2018 | 1
Company Presentation January 2018
2 | 2017 2 | 2017 2018 | 2
• THIS PRESENTATION (THE “PRESENTATION”) HAS BEEN PRODUCED BY FLEX LNG LTD. ("FLEX LNG" OR "THE COMPANY”), SOLELY FOR PRESENTATION PURPOSES
AND DOES NOT PURPORTE TO GIVE A COMPLETE DESCRIPTION OF THE COMPANY, ITS BUSINESS OR ANY OTHER MATTER DESCRIBED HEREIN.
• THE PRESENTATION DOES NOT CONSTITUTE AN OFFER, INVITATION OR SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE OR SELL ANY SECURTIEIS. THIS
PRESENTATION IS STRICTLY CONFIDENTIAL AND MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON.
• NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION INCLUDED HEREIN IS GIVEN BY
THE COMPANY, AND THAT NOTHING CONTAINED IN THIS PRESENTATION IS OR CAN BE RELIED UPON AS A PROMISE OR REPRESENTATION BY THE COMPANY,
WHO DISCLAIM ALL AND ANY LIABILITY, WHETHER ARISING IN TORT OR CONTRACT OR OTHERWISE.
• THE PRESENTATION SPEAKS AS OF THE DATE SET OUT ON ITS FRONT PAGE. THE COMPANY DOES NOT INTEND TO, OR WILL ASSUME ANY OBLIGATION TO,
UPDATE THE PRESENTATION OR ANY OF THE INFORMATION INCLUDED HEREIN.
• THE CONTENTS OF THE PRESENTATION ARE NOT TO BE CONSTRUED AS FINANCIAL, LEGAL, BUSINESS, INVESTMENT, TAX OR OTHER PROFESSIONAL ADVICE.
EACH RECIPIENT SHOULD CONSULT WITH ITS OWN PROFESSIONAL ADVISORS FOR ANY SUCH MATTER AND ADVICE.
• AN INVESTMENT IN THE COMPANY INVOLVES RISK, AND SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE
COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY
STATEMENTS AND INFORMATION IN THIS PRESENTATION.
• THE PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS RELATING TO THE BUSINESS, FINANCIAL PERFORMANCE AND RESULTS OF THE
COMPANY AND/OR THE INDUSTRY IN WHICH IT OPERATES, SOMETIMES IDENTIFIED BY THE WORDS "BELIEVES”, "EXPECTS”, “INTENDS”, “PLANS”, “ESTIMATES” AND
SIMILAR EXPRESSIONS. THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION, INCLUDING ASSUMPTIONS, OPINIONS AND VIEWS OF THE
COMPANY OR CITED FROM THIRD PARTY SOURCES, ARE SOLELY OPINIONS AND FORECASTS WHICH ARE SUBJECT TO RISKS, UNCERTAINTIES AND OTHER
FACTORS THAT MAY CAUSE ACTUAL EVENTS TO DIFFER MATERIALLY FROM ANY ANTICIPATED DEVELOPMENT. THE COMPANY DOES NOT PROVIDE ANY
ASSURANCE THAT THE ASSUMPTIONS UNDERLYING SUCH FORWARD-LOOKING STATEMENTS ARE FREE FROM ERRORS NOR DOES THE COMPANY ACCEPT ANY
RESPONSIBILITY FOR THE FUTURE ACCURACY OF THE OPINIONS EXPRESSED IN THE PRESENTATION OR THE ACTUAL OCCURRENCE OF THE FORECASTED
DEVELOPMENTS. NO OBLIGATION IS ASSUMED TO UPDATE ANY FORWARD-LOOKING STATEMENTS OR TO CONFORM THESE FORWARD-LOOKING STATEMENTS
TO ACTUAL RESULTS.
• THIS PRESENTATION IS SUBJECT TO NORWEGIAN LAW, AND ANY DISPUTE ARISING IN RESPECT OF THIS PRESENTATION IS SUBJECT TO THE EXCLUSIVE
JURISDICTION OF THE NORWEGIAN COURTS.
Disclaimer
3 | 2017 3 | 2017 2018 | 3
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05
02
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01
04
05
02
03
01
04
About FLEX LNG
LNG Shipping Market Outlook
MEGI Propulsion
FSRU Market Development
Summary
Table of contents
4 | 2017 4 | 2017 2018 | 4
01
2017 | 4
About FLEX LNG
5 | 2017 5 | 2017 2018 | 5
FLEX LNG at a Glance
FLEX LNG: LNG Shipping and Regasification
FLEX LNG aims to become a leading provider of floating LNG
infrastructure with focus on LNG Carriers and FSRUs
• FLEX LNG is focused on offering safe, reliable, and cost
effective solutions in the LNG shipping industry
• The Company, listed on Oslo Stock Exchange
has built a strong market presence and successfully raised over
US$ 200m in 2017
FLEX’s fleet will provide Charterers with highly efficient tonnage to
lower fuel consumption and reduce boil off rate
• FLEX LNG has six 174,000 cbm MEGI* newbuildings under
construction at DSME and SHI for delivery in 2018 and 2019
• MEGI propulsion has ~30% lower fuel consumption than Tri-
Fuel Diesel Electric (TFDE) vessels
FLEX LNG is actively pursuing opportunities in the FSRU market
• FLEX LNG has a highly experienced commercial and technical
team to succeed in the FSRU market
FLEX ENTERPRISE: MEGI newbuilding under construction at DSME, South Korea
6 | 2017 6 | 2017 2018 | 6
2
1
1
1
6
0
1
2
3
4
5
6
Q1 2018 Q2 2018 Q3 2018 Q2 2019 Q3 2019
# Vessels
6 173,400 173,400
174,000 174,000
2 173,400 170,000
• 4 chartered-in TFDEs for 6 months period from Mar-17
• 2 vsls redelivered Sep-17, 2 vsls extended until Mar-18
• Building market presence, operational experience,
and relationships with key LNG charterers
• 6 LNG MEGI vessels on order
• Under contruction at DSME and SHI in Korea
• Delivering Q1-Q3 2018, Q2-Q3 2019
173,400 173,400
Owned Fleet Deliveries
Owed Fleet Chartered-in Vessels
FLEX LNGC Fleet Development
7 | 2017 7 | 2017 2018 | 7
FLEX LNG Fleet Breakdown – Owned and Chartered-In
Status Vessel Name Builder Prop. Built Capacity Head Owner Employment
1. Owned TBN FLEX ENDEAVOUR DSME MEGI 2018 173,400 m3 FLEX LNG Employed until Q2-19
2. Owned TBN FLEX ENTERPRISE DSME MEGI 2018 173,400 m3 FLEX LNG Available Jan 2018
3. Owned TBN FLEX RANGER SHI MEGI 2018 174,000 m3 FLEX LNG Available May 2018
4. Owned TBN FLEX RAINBOW SHI MEGI 2018 174,000 m3 FLEX LNG Available Jul 2018
5. Owned TBN FLEX CONSTELLATION DSME MEGI 2019 173,400 m3 FLEX LNG Available Jun 2019
6. Owned TBN FLEX COURAGEGOUS DSME MEGI 2019 173,400 m3 FLEX LNG Available Aug 2019
7. Chartered-in WOODSIDE REES WITHERS DSME TFDE 2016 174,000 m3 Maran Gas Chartered-out
8. Chartered-in PSKOV STX TFDE 2014 170,000 m3 Sovcomflot Chartered-out
8 | 2017 8 | 2017 2018 | 8
FLEX LNG FSRU Strategy Growth of FSRU Regas Capacity by Country
FLEX LNG’s FSRU Ambitions
FLEX LNG is actively developing several opportunities to leverage its
experience with the development and implementation of FSRU
infrastructure
• Opportunities may include FSRU newbuildings for long-term
charters and/or conversions of existing vessels
FLEX LNG has a highly experienced commercial and technical team to
succeed in the FSRU market
• Jonathan Cook (founding partner at Excelerate Energy and ex-Chief
Marketing Officer for Cardiff LNG) was appointed CEO in March
2017
• Thomas Thorkildsen (formerly head of business development at
Höegh LNG, responsible for FSRU opportunities) joined in February
2017 to lead business development efforts
• Øystein Kalleklev (formerly CFO at Knutsen NYK Offshore Tankers
involved in e.g. financing of FPSOs) joined FLEX in September 2017
The FLEX LNG team can draw on extensive technical FSRU
knowledge within the group
• Management has been involved in 13 of the existing 21 FSRU
projects worldwide (19 FSRUs including decommissioned projects)
Escobar FSRU, Argentina
0
20
40
60
80
100
2017E 2018E 2019E
mtpa India Chile Bangladesh Puerto Rico Uruguay
Brazil Russia Pakistan Turkey Ghana
Source: Reuters
9 | 2017 9 | 2017 2018 | 9
Functional Organizational Chart of FLEX LNG
A highly experienced team is in charge of LNG shipping
LNGC
Owned Fleet
(FLEX LNG)
Technical Mgt
(Frontline Mgt)
Newbuild Supervision
(Seatankers)
Crewing, Ship Mgt
(Bernhard Schulte)
Newbuild Design
(Ship Construction Strategies)
Chartering
(FLEX LNG)
Commercial Operations
(V.Ships)
Chartered Fleet
(FLEX LNG)
Chartering
(FLEX LNG)
Commercial Operations
(V.Ships)
Finance & Admin
(FLEX LNG)
Finance
(FLEX LNG)
Accounting
(Frontline Mgt)
Insurance
(Frontline Mgt)
FLEX LNG
Shared Services
Third Party
Providing technical management and support
services
• 160 vessels including LNG, tankers, dry
bulk, container, offshore supply
• Vessel construction, project management,
technical management, insurance, etc.
• HSE and Incident Response
Providing newbuild construction supervision
services
• 47 vessels under construction including
LNG, tankers, dry bulk, containers, offshore
Providing crewing and ship management services
• 600 ships under crewing and/or technical
management
• Dedicated LNG crew for FLEX LNG vessels
Frontline
Management Ltd
Seatankers
Management Ltd
Bernhard Schulte
Shipmanagement
Comparison of LNG Ship Types on UTC Basis*
10 | 2017 10 | 2017 2018 | 10
CEO
Jonathan Cook
Business Development
Thomas Thorkildsen
SVP B.D.
VP B.D.
Kent Paulli
Manager B.D.
FSRU Design
Alan Nierenberg
Commercial
Jonathan Cook
Comm. Analyst
Sara Stahl
Comm. Operator
Andrew Niven
Comm. Operator
Marijan Glavan
Operations
Fleet Manager
Mike O’Rourke
Marine Super.
Jason Ratcliffe
Fleet Personnel
Agnieszka Murawka
Technical
Olav Eikrem
Technical Director
Head of Newbuilding
Björn Westerberg
Project Manager
JS Narayanan
DSME
Site Team (19)
SHI
Site Team (14)
Fleet Manager
Ola-Petter Dahlen
Sr. Tech Super.
Calum Hickman
Technical Officer
Frank Shaw
Technical Officer
Adrienne Snowdon
Technical Officer
Vicky Gatherar
Electrical Super.
Finance/Admin/IR
Oystein Kalleklev
CFO
SVP Finance
Accounting/Tax
Tom Pryor (4)
Corp. Secretary
Georgina Sousa (2)
Insurance
Chris Walker
FLEX LNG - Organizational Chart
11 | 2017 11 | 2017 2018 | 11
Jonathan Cook (54) – Chief Executive Officer
• Previously Chief Marketing Officer for Cardiff LNG, where he managed the LNG commercial activities
• Mr. Cook was founding partner of Excelerate Energy from 2003 onwards, Mr. Cook was part of the leadership team that
pioneered new frontiers in LNG shipping and transportation, by developing and marketing floating storage and
regasification technologies to address the logistical challenges of importing and exporting LNG worldwide
• Mr. Cook has 30 years in the maritime and energy sectors with the last 16 years in the LNG sector
Øystein Kalleklev (38) - Chief Financial Officer
• Mr. Kalleklev joined FLEX LNG in October 2017, after serving as CFO of Knutsen NYK Offshore Tankers since 2013 and
Chairman of the General Partner of the MLP KNOT Offshore Partners from 2015-2017
• Previous roles include CFO of industrial investment company Umoe Group, Managing Director of Umoe Invest, Partner of
investment bank Clarksons Platou and Business Consultant at Accenture
• Mr. Kalleklev holds a MSc in Business and Administration from Norwegian School of Economics and a Bachelor in
Business and Finance from Heriot-Watt University
Thomas Thorkildsen (45) - SVP Business Development
• Previously Mr. Thorkildsen was the former head of business development at Höegh LNG. Furthermore, he was
responsible for various commercial roles such as commercial management, chartering etc.
• Mr. Thorkildsen has 20 years experience in the maritime industry with the last 14 years in LNG business development
• Prior to joining Höegh LNG he was employed by the Norwegian Ro-Ro specialist Wilh. Wilhelmsen Group. Mr.
Thorkildsen holds an MSc from Cass Business School, London
Executive Management Team
12 | 2017 12 | 2017 2018 | 12
Board of Directors
David McManus (64) – Chairman
• Mr. McManus has served on the Board since August 2011, and was elected as chairperson in September 2011
• David’s background as an international business leader in the energy industry brings exceptional experience and strong technical
and commercial skills with 39 years of at BG Group, ARCO, Ultramar, Shell and Fluor Corporation
• Mr. McManus is currently a non-executive director for a number of listed companies including Hess Corporation, Rockhopper
Exploration plc, Costain plc, and Caza Oil & Gas
Marius Hermansen (38) – Director
• Mr. Hermansen joined the Board in December 2015. Marius works for Frontline Management and is involved in S&P activities for
Frontline and all related companies
• Previously Mr. Hermansen worked for over 10 years at Fearnleys
• Mr. Hermansen was educated at the Norwegian School of Economics (NHH) in Bergen
Ola Lorentzon (68) – Director
• Mr. Lorentzon has been a Director on the Board since June 2017
• Ola served as Principal Executive Officer of Golden Ocean Group from 2010 to 2015 and held the role as Chief Executive Officer
of Frontline Management from April 2000 to 2003. He is currently a Director of Frontline Ltd.
• Mr. Lorentzon is also a Director and Chairman of Golden Ocean Group, Director of Erik Thun AB and Dir. of Laurin Shipping AB
Georgina Souza (67) – Director
• Mrs. Sousa has been a Director of the Company since June 2017
• Mrs. Sousa has served as Secretary of Golden Ocean Group Limited since March 2007. Prior to joining Golden Ocean, Mrs.
Sousa held the role as Vice President Corporate Services of Consolidated Services, a Bermuda management company having
joined that firm in 1993. From 1982 to 1993 she served as Senior Company Secretary at the law firm Cox & Wilkinson
Nikolai Grigoriev (43) – Director
• Mr. Grigoriev joined the Board in September 2017
• From 2008 to 2016 Nikolai served as Managing Director of Shipping and Logistics at Gazprom Marketing & Trading. Prior to
Gazprom, Mr. Grigoriev worked for BG Group in senior LNG shipping, commercial and corporate finance roles. Nikolai holds a
B.Sc. in Navigation from Admiral Makarov State Maritime Academy in St. Petersburg, Russia and an MBA from INSEAD
13 | 2017 13 | 2017 2018 | 13
02
2017 | 13
LNG Market Outlook
14 | 2017 14 | 2017 2018 | 14
Key Trends in the LNG Shipping Market
Natural Gas becoming
fuel of choice
Strong growth expected
in the LNG market
• Over the next 5 years LNG annual supply is projected to rise by at least 130 mt to ~418 mt in
2021, coming from both new liquefaction plants and existing projects ramping up capacity
• IEA predicts global energy demand will increase by 30% between by 2040. Natural gas
represents 25% of the world’s energy mix
• LNG grows seven times faster than pipeline gas trade and is expected to account for 50% of
globally traded gas in 2035 (up from 32% today)
• Both total consumption and the number of countries importing LNG are expected to increase
significantly over the next 10-15 years from 39 to 90 countries
LNGC fleet
development
• The LNG shipping market is expected to tighten significantly with an estimated decrease in
available tonnage of 57 vessel equivalents in the period until 2020 on conservative
assumptions
• 90% of the LNGC newbuildings built by 2020 are committed on long term charters
Activity in LNG
chartering market
continues to grow
• While activity in the LNG chartering market continues to grow, the average charter durations
fall
• Short-term fixtures (>6 months) picked up in 2016 as charterers began covering term
requirements from new project start ups
• Higher spot rates for MEGI propulsion vessels (estimated to be approx. USD 16-18k per day
premium for MEGI vessels)
1
2
3
15 | 2017 15 | 2017 2018 | 15
242 240 238 240 246 268
297 337
373 404 418
-
100
200
300
400
500
600
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Mt LNG Middle East Atlantic Asia-Pacific
LNG Trade to Increase by Over 50% by 2021
Supply by Region, 2011-2021
Sources: Affinity, IEA
Demand by Region, 2011-2021
11%
56%
Forecast Actual
242 239 238 239 247
267 297
337 373
404 418
0
100
200
300
400
500
600
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Mt LNG South America North America Europe Middle East Africa Asia-Pacific
56%
11%
Forecast Actual
16 | 2017 16 | 2017 2018 | 16
Total export
capacity
additions of
115+ mtpa by
2020
11.5
38
20
17
6
6
2
1
4
2
1
0
20
40
60
80
100
120
-
10
20
30
40
50
2018 2019 2020
mtpa mtpa
United States Australia Russia Malaysia Indonesia Equatorial Guinea Camaroon Cumlative Capacity
Source: Reuters
Supply Growth Driven by New Exports from U.S. and Australia
New LNG Export Capacity Under Construction
35.8 mtpa
27.5 mtpa
43.6 mtpa
17 | 2017 17 | 2017 2018 | 17
-
20
40
60
80
100
120
140
160
US$ ‘000/day ST Assessed Spot Charter Rates TFDE Assessed Spot Charter RatesTerm Fixtures: Existing Tonnage Term Fixtures: Newbuild Tonnage
(60)
(40)
(20)
-
20
40
60
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20
# Vsls Period of low to zero structural
availability
Speculative orders get
delivered Thin
Orderbook
173 165 150 155 185
205 220 220 245
212 202 202 201 208 200 185 180
-
50
100
150
200
250
US$ million
LNGC Construction Time: ~26-28 months
Ne
wb
uild
Pri
ce
s
Str
uctu
ral A
va
ilab
ility
S
po
t &
Te
rm R
ate
s
Uncommitted NB Deliveries
1 3 1 1 1 2 1 1 -
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Earliest Yard
Delivery
Available
Only 11 Uncommitted
Newbuilds on the Orderbook
Shipping market
starts to tighten
NB Prices
lowest since
2008
What does the New Supply mean for the LNG Shipping Balance?
18 | 2017 18 | 2017 2018 | 18
Tightening LNG Shipping Market on the back of New Supply
Overview of incremental LNGC vessel demand and supply through 2020
• The LNGC market is expected to tighten significantly with an estimated decrease in available tonnage of 60+ vessel equivalents in
the period until 2020 on conservative assumptions
• There is substantial upside to these estimates as the current low ordering activity makes it highly uncertain that 10/35 newbuild
vessels will be ordered with 2019/20 delivery
Source: Arctic Shipping
107
23
50
179
35
214
16
96
35
67
0
50
100
150
200
250
United States Australia Rest of World Vesselrequirement
Scrapping Demand afterrenewal
Delivered 2017to date
Orderbook Yard capacity2020
Net decrease inavailabletonnage
# v
ess
els
63m
tons x
1.7vsl/t
31m
tons x
0.7vsl/t
38m
tons x
1.3vsl/
19 | 2017 19 | 2017 2018 | 19
Right Ships at the Right Time
Only 11 open LNGCs out of 96 through 2020
Most of the vessels on the LNGC orderbook are committed to long term
charters
• Currently, there are 96 LNGC newbuildings under construction
• 90% of the LNGC newbuildings built by 2020 are committed for long
term charters
FLEX LNG owns 6 out of the 11 open LNG newbuildings, four of which
delivers in 2018 and two in 2019
• Limited ordering – only 16 LNGC newbuildings contracted over the
last two years
• Ramp up of LNG global supply is expected to drive strong demand for
term charters of modern tonnage
• Most of the recent long-term charters have been MEGI or
X-DF vessels
Source: FLEX LNG
# Vessels
55
20
10
5
6
0
10
20
30
40
50
60
70
2018 2019 2020
Long Term Employment Uncommitted
20 | 2017 20 | 2017 2018 | 20
FLEX LNG Shipping Strategic Summary
First U.S. LNG export project going live: Cheniere’s Sabine Pass
Qatar's LNG production to boost from 77 to 100 mtpa within 5-7 years
The LNG market is growing rapidly and 30-50 additional vessels are
expected to be required by 2020
• New export projects will add 25-30 mtpa of LNG per year over the
coming four years
• The current orderbook is insufficient to meet this demand for LNGC
FLEX LNG is well positioned with six high spec MEGI newbuildings
delivering in 2018-2019 to provide customers with superior transportation
efficiency
• Further newbuildings will be considered as the market evolves
• The chartered-in vessels allows FLEX LNG to build a market
presence and establish operational experience ahead of its owned
fleet
• Building relationships with Charterers creates opportunities for the
forthcoming newbuildings
21 | 2017 21 | 2017 2018 | 21
03 03 03
2017 | 21
MEGI Propulsion
Source: Cheniere
22 | 2017 22 | 2017 2018 | 22
41%
8%
5%
42%
2%
39%
2%
59%
26%
74%
2010 2015 2022
-
10
20
30
40
50
'72
'73
'74
'75
'76
'77
'78
'79
'80
'81
'82
'83
'84
'85
'86
'87
'88
'89
'90
'91
'92
'93
'94
'95
'96
'97
'98
'99
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
'16
'17
'18
'19
'20
ST DFDE/TFDE Other XD-F MEGI
LNGC Engine Evolution
Phasing out Steam Vessels: Technology Shift Leading to Increased Efficiency and Carrying Capacity
Source: FLEX LNG
Trend Towards Modern Vessels is Visible in the Orderbook
LNGC Fleet and Orderbook by Propulsion
23 | 2017 23 | 2017 2018 | 23
A Three Tier Market has Emerged that Favors Modern LNGCs
LNG brokers began publishing assessed two-stroke (MEGI and X-DF) spot charter rates in Jan 2017
Sources: Arctic Shipping, Affinity, Clarkson
Assumptions: Sabine Pass – Tokyo Bay Round-Trip, HFO price $330/ton,
Estimated boil-off savings based on 0.12% for TFDE vs 0.09% for MEGI
USD/day
Comparison of LNG Ship Types on UTC Basis*
MEGI Equivalent Spot Charter Rates(1) COMPANY SNAPSHOT Three Tier Broker Assessments
0
0.2
0.4
0.6
0.8
1
ST 138k TFDE 160k X-DF 174k MEGI 174k
$ / mmbtu
45,000
61,910
7 530
1,212 2,000 3,938
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
DFDE 160kcbm spot
rate
Fuel savings Boil-offsavings
ReducedOPEX
Sizeadjustment
(+9%)
MEGIequivalentspot rate
USD/day
There are currently ten MEGIs on the water (all under term TC contracts)
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
ST TFDE MEGI/X-DF Assessment
24 | 2017 24 | 2017 2018 | 24
U.S. Gulf - Far East via
Panama 9,279 nm
U.S. Gulf -
Northwest Europe
4,961 nm
Arabian Gulf –
East Asia
5,760 nm
Arabian Gulf - Northwest
Europe
via Suez 6,377 nm
US$ / mmbtu
N.B. US$70,000 per day applied as charter hire across vessel classes, LNG boil-off priced at US$5.50 / mmbtu
UTC Breakdown by Trade Route
Source: Poten & Partners
Unit Transportation Cost (UTC) Analysis - Critical Trade Route Summary
Critical Trade Routes Summary
0.50 0.30
0.18 0.26 0.16 0.10
0.34 0.20 0.13
0.30 0.18 0.11
0.19
0.17
0.15 0.18
0.16 0.14
0.19 0.16
0.14
0.19
0.16 0.14
1.09
0.95
0.83 0.58
0.52 0.45
0.74
0.66
0.58
0.67
0.59
0.52
0.02
0.01
0.01
0.01
0.01
0.01
0.01
0.01 0.01
0.01
0.01
0.21
0.20
0.20
0.21
0.20
0.19
0.0
0.5
1.0
1.5
2.0
2.5
145k ST 160k TFDE 180k MEGI / X-DF 145k ST 160k TFDE 180k MEGI / X-DF 145k ST 160k TFDE 180k MEGI / X-DF 145k ST 160k TFDE 180k MEGI / X-DF
U.S. Gulf - Far East via Panama U.S. Gulf - NW Europe Arabian Gulf - Northwest Europe via Suez Arabian Gulf - East Asia
Boil Off Port Charges Charter Hire Fuel Canal Fees2.01
1.63
1.37
1.23
0.85
0.70
1.49
1.17 1.05 1.04
0.79
0.95
25 | 2017 25 | 2017 2018 | 25
0.10 0.17 0.26
0.15 0.16
0.18
0.49 0.40 0.28
-
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
180k MEGI Newbuilding 5 Yr Old 160k TFDE 10 Yr Old 145k ST
Dominant Vessel Classes
Fuel
Charter Hire
Port Charges
Boil Off
Source: Poten & Partners
…However MEGI Vessels Offer a Substantial Competitive Advantage
UTC Equivalent Breakdown of Charter Rates for Dominant Vessel Technologies Over 7 Year Term
58,400
35,800 18,500
16,600
18,700
15,500
-
10,000
20,000 30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
180k MEGI Newbuilding 5 Yr Old 160k TFDE 10 Yr Old 145k ST
Dominant Vessel Classes
Est. Average OpexRate
Est. Average CapexRate
Gross Charter Rate (US$ ‘000 / day)
Operating UTC (US$ / mmbtu)
0.74 0.74 0.74
54,500
75,000
34,000
$
69,300
51,100
$
UTC Equivalent
Charter Rate
IRR Equivalent
Charter Rate
Operating UTCs Based on Balancing Charter Rates - Round Trip U.S. – NW Europe Basis
26 | 2017 26 | 2017 2018 | 26
04
2017 | 26
FSRU Market Development
27 | 2017 27 | 2017 2018 | 27
The FSRU market is poised to grow substantially over the next five years
• Growth of LNG supply, low LNG prices, energy deficits, security of
supply issues and fuel switching due to mandated emissions
reductions are prime drivers
• NB FSRU are flexible, efficient and cost competitive compared to
conversions (with current yard prices)
• Based on the current supply-demand outlook, there is potential for
12-15 new FSRU projects contracted by 2021
FLEX LNG has a highly experienced commercial and technical
team to succeed in the FSRU market
• FLEX LNG is actively pursuing FSRU opportunities and plan to
establish a presence in the FSRU market
• FLEX LNG will consider placing orders for NB FSRU to meet the
demand of fast track projects
• FSRU newbuildings can be delivered in 27-30 months
FLEX LNG FSRU newbuildings will have state of the art design
incorporating latest technologies and lessons learned
• Newbuilding prices of FSRUs have fallen and compete favourably
with conversion economics
LNG Imports: FSRUs vs. Land-Based Terminals
FSRU Gaining Market Share Over Traditional Import Terminals
Sources: Reuters, Affinity Shipping
Market Share: FSRU vs. Onshore Terminals
10% 10% 10%
10% 13% 14%
14% 16%
17% 19% 20%
(100)
100
300
500
700
900
1,100
2010 '11 '12 '13 '14 '15 '16 '17 (E) '18 (E) '19 (E) '20 (E)
Mtpa
Onshore Regas Capacity Floating Regas Capacity
28 | 2017 28 | 2017 2018 | 28
Up to 34 FSRU Projects Expected Operational by 2020
There are 21 active FSRU projects globally and 13 awarded projects (expected to begin operations in the next 3 years)
FLEX LNG team has
been involved in 13 of
the 21 existing FSRU
projects globally
Sources: FLEX LNG, Affinity Shipping
Awarded FRSU projects:
2017: Russia, Pakistan
2018: Pakistan (2), Bangladesh,
Ghana, Uruguay, Puerto Rico
2019: Chile, Turkey, India
2020: Brazil
Existing
Awarded
Existing &
Active:
21
Awarded:
13
Proposed:
50+
29 | 2017 29 | 2017 2018 | 29
FLEX LNG – NextDecade Alliance About NextDecade
Strategic Partnership with NextDecade
FLEX LNG and NextDecade signed an HoA in December 2016 to
create a full value chain solution for LNG to international customers
• FLEX LNG will provide FSRU and dockside solutions to assist LNG
importing customers
In July 2017, NextDecade signed a MoU with the Port of Cork for a
new FSRU and associated LNG terminal infrastructure
• As Owners of the FSRU, FLEX LNG would charter out the unit under
a long-term contract FLEX LNG will provide FSRU and dockside
solutions to assist LNG importing customers
NextDecade is a leading US-based development and management
company of onshore and floating LNG projects
• NextDecade’s key project is the Rio Grande LNG export project
under development in Brownsville, Texas
• The Rio Grande LNG export project is expected to have a capacity
of six liquefaction trains, each with a nominal LNG capacity of 4.5
mtpa, yielding a total capacity of 27 mtpa
• FERC approval application filed in 2015, FID targeted for Q2 2018
with first cargo expected in 2022
Next Decade’s proposed Rio Grande liquefaction terminal, Brownsville, Texas Port of Cork, Ireland
30 | 2017 30 | 2017 2018 | 30
05
2017 | 30
Summary
31 | 2017 31 | 2017 2018 | 31
FLEX LNG has a modern and efficient fleet of LNGCs available from 2018 offering Charterers
significant fuel savings and reduced boil-off rate over older vessels
• FLEX LNG has established proven operational capabilities and developed relationships with key Charterers in
the LNG market by chartering in and trading third party LNGCs
Majority shareholder Geveran Trading has a long history in the LNG industry and is committed to
building FLEX LNG into a major provider of LNGCs and FSRUs
• As part of the Fredriksen Group, FLEX LNG benefits from a wide range of commercial and technical expertise,
strong financial backing and access to competitive financing
The FSRU market is forecasted to grow substantially over the coming years, driven by growth in LNG
supply, low LNG prices and fuel switching driven by emission cuts
• Based on the current LNG supply-demand outlook, there is potential for 12-15 new FSRU projects
contracted by 2021
The FLEX LNG team has significant experience in developing and operating FSRU projects globally
• FLEX LNG is actively pursuing opportunities in the FSRU market and is engaged in discussions
with multiple counterparties across various projects
LNG Carriers
FSRUs
Summary
The LNG market could experience significant shortage of tonnage from 2018
32 | 2017 32 | 2017 2018 | 32
Thank You December 2018
