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1 | 2017 1 | 2017 2018 | 1
Company Presentation June 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
02
03
01
04
About FLEX LNG
LNG Shipping Review
MEGI Propulsion
Summary
Table of contents
Summary
4 | 2017 4 | 2017 2018 | 4
01
2018 | 4
About FLEX LNG
5 | 2017 5 | 2017 2018 | 5
FLEX LNG at a Glance
Focus: LNG Shipping and Regasification
FLEX LNG aims to become a leading operator in
LNG shipping markets
• FLEX LNG is focused on offering safe, reliable, and
cost effective solutions for the LNG shipping industry
• The Company is listed on Oslo Stock Exchange and
successfully raised over US$ 200m in 2017
FLEX’s fleet of eight LNG carriers will provide
Charterers with highly efficient tonnage to lower fuel
consumption and reduce boil off rate
• FLEX took delivery of their first two LNG carriers in
Jan-18
• The Company has six vessels under construction at
SHI (2), DSME (2), and HHI (2). These will be
delivered throughout 2018-2020
• All FLEX vessels have two-stroke propulsion (MEGI
or XDF) – the most fuel-efficient and technically
advanced LNG carriers in the world with ~30% lower
fuel consumption than TFDE vessels
FLEX ENTERPISE
FLEX RANGER
6 | 2017 6 | 2017 2018 | 6
2
8
1
1
1
1
1
0
1
2
3
4
5
6
7
8
Q1 2018 Q2 2018 Q3 2018 Q2 2019 Q2 2020 Q3 2020 Q3 2019
# Vessels
6 173,400 173,400
174,000 174,000
• In 2017, FLEX chartered in four TFDE vessels and traded these
in the spot and short-term markets
- The purpose was to establish a market presence, operational
experience, and foster relationships with key LNG charterers in
anticipation of FLEX own fleet delivering
- The last of the TC-in vessels were redelivered in Q1-18 as
FLEX’ focus shift to owned tonnage
• 8 LNG carriers (MEGI and X-DF)
- 2 vessels delivered in January 2018
- 6 vessels under construction del. 2018-2020
173,400 173,400
Fleet Deliveries
FLEX LNG Fleet Chartered-in Vessels
FLEX LNGC Fleet Development
174,000 174,000
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. Existing FLEX ENDEAVOUR DSME MEGI 2018 173,400 m3 FLEX LNG Employed until Q2-19
2. Existing FLEX ENTERPRISE DSME MEGI 2018 173,400 m3 FLEX LNG Spot Market
3. Newbuilding TBN FLEX RANGER SHI MEGI 2018 174,000 m3 FLEX LNG Available Jul 2018
4. Newbuilding TBN FLEX RAINBOW SHI MEGI 2018 174,000 m3 FLEX LNG Available Jul 2018
5. Newbuilding TBN FLEX CONSTELLATION DSME MEGI 2019 173,400 m3 FLEX LNG Available Jun 2019
6. Newbuilding TBN FLEX COURAGEOUS DSME MEGI 2019 173,400 m3 FLEX LNG Available Aug 2019
7. Newbuilding HULL NO. 8010 HHI X-DF 2020 174,000 m3 FLEX LNG Available Q2 2020
8. Newbuilding HULL NO. 8011 HHI X-DF 2020 174,000 m3 FLEX LNG Available Q3 2020
8 | 2017 8 | 2017 2018 | 8
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)
Ship Mgt, Crewing
(Bernhard Schulte)
Newbuild Design
(Ship Construction Strategies)
Chartering
(FLEX LNG)
Commercial Operations
(FLEX LNG)
Chartered Fleet
(FLEX LNG)
Chartering
(FLEX LNG)
Commercial Operations
(FLEX LNG)
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 ship management and crewing
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*
9 | 2017 9 | 2017 2018 | 9
Marius Hermansen – Interim Chief Executive Officer
• Mr. Hermansen joined FLEX LNG Board in December 2015. Marius works for Frontline Management and manags S&P
activities for Frontline and all related companies
• Prior to FLEX and Frontline, Mr. Hermansen worked over 10 years at Fearnleys
• Mr. Hermansen was educated at the Norwegian School of Economics (NHH) in Bergen
Øystein Kalleklev - 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
Executive Management Team
10 | 2017 10 | 2017 2018 | 10
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
11 | 2017 11 | 2017 2018 | 11
02
2018 | 11
LNG Shipping Review
12 | 2017 12 | 2017 2018 | 12
Key Trends in the LNG Shipping Market
Natural Gas becoming
fuel of choice
Strong growth expected
in the LNG market
• Over the next three years, LNG annual supply is projected to rise by at least 130 million
tonnes (mt) to ~420 mt in 2021, coming from both new liquefaction plants and existing
projects ramping up
• IEA predicts global energy demand will increase by 30% by 2040. Natural gas represents
25%
of the world’s energy mix
• LNG is currently growing 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 80+ countries
Transformation of
LNGC fleet
development
• The LNG shipping market is expected to tighten significantly as new LNG export projects
from primarily US, Australia and Russia becomes operational and soak up tonnage
• ~90% of the LNGC newbuildings on the orderbook are committed on long-term charters
• Modern two-stroke tonnage (MEGI and X-DF vessels) brings significant advantages to
Charterers in form of fuel savings and reduced boil off rates
Activity in the LNG spot
shipping market
continues to grow
• The LNG shipping market has transitioned from traditional long-term chartering contracts
to an increasingly liquid spot market led by portfolio trading and more destination flexibility
in supply contracts
• The level of spot chartering in LNG topped 300 fixtures in 2017 (up from 230 in 2016),
which corresponded to ~25% of all LNG produced globally
1
2
3
13 | 2017 13 | 2017 2018 | 13
LNG Shipping Market Balance
COMPANY SNAPSHOT
Source: Affinity
(150)
(100)
(50)
-
50
100
150
200
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2018 2019 2020
# Vessels Vessel Demand Vessel Supply Shipping Balance
Note: All vessel figures normalized to 165K m3, 35 years useful life, excludes vessels in layup and FSRU/FLNG/FSU
Underfunded LNG NB Orderbook Shipping market begins to tighten
The LNG shipping market is expected to gradually tighten from the end of 2018, with Australia, the U.S. and Russia being the
driving forces for soaking up tonnage
• Q3 2018 shipping balance is forecasted to increase due to delivery of newbuildings ahead of project start-up. On the other hand,
new volumes from e.g. Cove Point and Yamal LNG may counter this effect
• Q4 2018 / Q1 2019 the shipping balance starts to tighten as new export capacity comes to the market and outdated tonnage
comes off charter and will result in vessel replacement
• By 2020, additional export projects starts producing, triggering vessel demand against a thin orderbook
14 | 2017 14 | 2017 2018 | 14
Right Ships at the Right Time
Majority of uncommitted tonnage delivers in 2020 – but market expected to tighten 2H 2018
Source: FLEX LNG
# Vessels
Majority of LNGC orderbook remains committed to long
term charters
• Currently, there are 92 LNGC under construction
• Traditionally majority of orders are basis long-term
employment to dedicated projects or portfolios
FLEX LNG is one of the few Owners with uncommitted
tonnage delivering in 2018-2019
• Shipping market is expected to tighten as projects from
US, Australia and Russia continues to ramp up
• Incremental LNGC demand 30-50 vessels by 2020
• Fleet renewals likely to add to demand for modern
efficient LNGCs
• Earliest shipyard delivery for LNGC is Q1 2021
Most Charterers prefer larger & more efficient LNGCs
• Most of the recent long-term charters have been MEGI or
X-DF vessels
39
20
10
2
7
14
0
5
10
15
20
25
30
35
40
45
2018 2019 2020
Long Term Employment
Uncommitted
15 | 2017 15 | 2017 2018 | 15
03 03 03
2018 | 15
MEGI Propulsion
16 | 2017 16 | 2017 2018 | 16
A Three Tier Market is Emerging that Favors Modern LNGCs
MEGI and X-DF vessels are the most fuel-efficient and technically advanced LNG ships
USD/day
COMPANY SNAPSHOT Three Tier Broker Assessments
-
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
Introducing Two Stroke Propulsion for LNG Carriers
• For many years steam turbines was the only propulsion
system available for LNG ships, even though its efficiency
was considerably lower than diesel engines
• However, with the introduction of the reliquefaction plant
and gas-driven diesel engines, it is today possible to install
high-efficiency diesel engines as prime movers, and
thereby significantly cut fuel costs
• Owners and Charterers are provided with maximum fuel
flexibility and, depending on the relative price and
availability of gas and fuel oil, are free to choose the most
competitive fuel as the engine operates with the same
efficiency on both gas and fuel.
• The Diesel-cycle ensures stable gas combustion under all
weather conditions, such as heavy weather and high
ambient temperatures, without any risk of misfiring or
knocking.
• For a typical long-haul trade the new and more efficient
twin screw LNGC design with MEGI engines will have an
average daily fuel consumption [gas and fuel oil] of ~30%
less than the TFDE LNG carriers. This corresponds to a
saving of more than 35 tonnes of fuel per day in HFO
equivalents at 16 knots.
17 | 2017 17 | 2017 2018 | 17
-
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
0
0.2
0.4
0.6
0.8
1
ST 138k TFDE 160k X-DF 174k MEGI 174k
$ / mmbtu
Ship Fuel Consumption Comparison
Transition Towards Modern Vessels is Visible in the Orderbook
LNGC Existing Fleet and Orderbook by Propulsion
Comparison of LNG Ship Types on UTC Basis*
Tons of FOE / Day (Laden)
Speed (knots) MEGI
174k
X-DF
174k
TFDE
160k
ST
145k
19.5 91.2 106.0 136 190
16.0 52.4 71.1 88 145
13.5 33.6 45.2 68 112
18 | 2017 18 | 2017 2018 | 18
MEGI / X-DF Leads LNG Fleet Evolution on Size and Efficiency
COMPANY SNAPSHOT
Source: Affinity LNG
120
160
200
240
280
- 5 10 15 20 25 30 35 40 45
Siz
e (
‘00
0 c
bm
)
Age (years)
ST TFDE & Other MEGI & X-DF
324
vessels
71 vessels
Existing LNGC Fleet:
450 vessels
19 | 2017 19 | 2017 2018 | 19
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
20 | 2017 20 | 2017 2018 | 20
04
2018 | 20
Summary
21 | 2017 21 | 2017 2018 | 21
FLEX LNG has a modern fleet of LNG carriers offering Charterers significant fuel savings
and reduced boil-off rate
• Fleet of 8 MEGI and X-DF vessels - the most advanced LNG ships on the water – delivering
during an attractive time when demand for tonnage is predicted to be high
• LNG shipping market is expected to gradually tighten on the back of new supply from export
projects coming onstream over the next three years
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 John Fredriksen Group, FLEX LNG benefits from a wide range of commercial
and technical expertise, strong financial backing and access to competitive financing
FSRUs
Summary
LNG shipping market could experience significant shortage of tonnage from the end of 2018
22 | 2017 22 | 2017 2018 | 22
Thank You June 2018
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