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Höegh LNG - The FSRU provider
Presentation at Pareto Oil & Offshore Conference 2017Sveinung J.S. Støhle
President & CEO
Forward looking statements
2
This presentation contains forward-looking statements which reflects management’s current expectations, estimates and projections about Höegh LNG’s operations. All
statements, other than statements of historical facts, that address activities and events that will, should, could or may occur in the future are forward-looking statements.
Words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,” “forecast,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue” or the
negative of these terms and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance
and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results
may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this presentation. Unless legally required, Höegh LNG undertakes no obligation to update publicly any forward-looking
statements whether as a result of new information, future events or otherwise.
Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changes in LNG transportation and
regasification market trends; changes in the supply and demand for LNG; changes in trading patterns; changes in applicable maintenance and regulatory standards;
political events affecting production and consumption of LNG and Höegh LNG’s ability to operate and control its vessels; change in the financial stability of clients of the
Company; Höegh LNG’s ability to win upcoming tenders and securing employment for the FSRUs on order; changes in Höegh LNG’s ability to convert LNG carriers to
FSRUs including the cost and time of completing such conversions; changes in Höegh LNG’s ability to complete and deliver projects awarded; changes to the
Company’s cost base; changes in the availability of vessels to purchase; failure by yards to comply with delivery schedules; changes to vessels’ useful lives; changes in
the ability of Höegh LNG to obtain additional financing, including the impact from changes in financial markets; changes in the ability to achieve commercial success for
the projects being developed by the Company; changes in applicable regulations and laws; and unpredictable or unknown factors herein also could have material
adverse effects on forward-looking statements.
Agenda
3
Company overview
Markets
Summary
Höegh LNG at a glance
▪ Sector: Maritime energy infrastructure – Floating Storage & Regasification Units (FSRU)
▪ Business model: Construction, ownership and operation of FSRUs on long-term
contracts
▪ Largest, most modern and most efficient FSRU fleet in the market
▪ Listings:
OSE / HLNG: MCAP / EV USD 800 million / USD 1.7 billion
NYSE / HMLP: MCAP / EV USD 610 million / USD 1.1 billion
13.5 years
Average remaining contract
length
USD 6.3bn
Revenue backlog
OSE
HLNG NO
Listed OSE since 2011
NYSE
HMLP US
Listed NYSE since 2014
115 / 500
Onshore / offshore
employees
Significant earnings growth driven by long-term contracts
5
27.0 26.5
31.2
36.7 37.7
2Q16 3Q16 4Q16 1Q17 2Q17
USDm EBITDA
10.0 10.0
12.5 12.5 12.5
3Q16 4Q16 1Q17 2Q17 3Q17
USDc Dividend per share
Regasification is the critical link in the global natural gas supply chain
Regasification/
infrastructureConsumptionTransportationLiquefactionProduction
The natural gas value chain
Natural Gas Liquefied Natural Gas Natural Gas
Focus for new
investments
▪ 7 FSRUs delivered
▪ 3 FSRUs under
construction
▪ 2 LNGCs on long-
term contracts
Höegh LNG activities
The fleet at work – providing our clients with industry leading regas services
7
Independence
PGN FSRU Lampung
Höegh Gallant
Höegh Grace
Neptune
FSRU NB
FSRU NB
FSRU NB
Arctic Lady
Arctic Princess
GDF Suez Cape Ann
99.87% 99.70% 99.95% 99.94% 99.74% >99.50 %
2013 2014 2015 2016 2017TD Target
Technical availability
1.07
0.44
0.73
0.00 0.00
<1.00
2013 2014 2015 2016 2017TD Target
LTIF1
Counterparts
Long-term employment in place, continued focus on backlog expansion
8
2017 2018 2019 2020 2021
FSRU #10
Höegh Giant Ghana, 20 years, EBITDA USD 36m
FSRU #8 Chile, 20 years, EBITDA USD 36m
FSRU #9, Pakistan, 20 years, EBITDA USD 36m
FSRUs and current contract allocation
FSRU opportunities and bridging options
LNG shipping market as fallback option
FSRU contract renewals
New FSRU contracts
Additional newbuildings
Solid earnings and dropdown pipeline
9
Q1 2017 annualised EBITDA
Source:
0
50
100
150
200
250
300
350
H1 2017 ex. Grace Höegh Grace Höegh Giant FSRU #9 FSRU #8 FSRU #10
US
D m
illio
n
EBITDA trajectory, current assets and orderbook
Höegh LNG Partners remains an integral part of HLNG’s strategy
▪ Höegh LNG Partners:
Yield of around 9%
Distribution growth 8% p.a. since listing
Coverage ratio 1.1x
▪ Acquisition of Neptune FSRUs
in August 2017 adding to
distribution growth and
coverage
▪ Drop-down of remaining 49%
ownership in Höegh Grace
next in line
10
0
20
40
60
80
100
120
140
160
180
2014 2015 2016 1H 2017 annualized
US
D m
illio
n
HMLP proceeds to Höegh LNG
Equity release MLP distribution IDR
Critical success factors for winning FSRU contracts
11
FSRU on order
Access to capital
FSRU experience and reputation
Höegh LNG has a solid platform for securing new FSRU contracts
Höegh LNG
✓
✓
✓
Nakilat alliance a confirmation of Höegh LNG’s leading market position
12
Nakilat / Höegh LNG FSRU alliance
▪ MoU signed with the objective to
create a platform to develop new
FSRU projects
FSRUs instrumental in order for Qatar to
establish markets for new LNG supply
Alliance to further enhance Höegh LNG’s
market position
▪ Access to new FSRU opportunities
▪ Access to attractively priced capital
Agenda
13
Company overview
Markets
Summary
Qatar expansion with the most competitively priced LNG
14
Source: GIIGNL, other
0
20
40
60
80
100
120
Qatar Australia USA Malaysia Russia Algeria Nigeria Indonesia T & T Egypt
millio
n t
on
nes
LNG exports and capacity and additions, top ten exporters
2016 production Unutilised nameplate capacity, end-2016 Expansions
FSRUs are key in opening up new markets for LNG
15
-
5
10
15
20
25
30
35
40
45
mil
lio
n t
on
nes
South Korea China India FSRU
Source: Wood Mackenzie
More FSRUs needed in order for Pakistan to cover LNG deficit
16
Excelerate
FSRUBW FSRU
GEI/Höegh
LNG FSRU site
Port Qasim, Karachi, PakistanPakistan LNG import ambitions in context
Source: Wood Mackenzie
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020->
Un
its
Global FSRU contracts in operation
Other Höegh LNG Höegh Committed Other committed Under development/potential
Strong industry fundamentals - FSRU demand increasing steadily
17
Manageable orderbook
18
1) Only committed orders and conversions
78
6
1 1
1
1
21
1
4
1
1
2
0
2
4
6
8
10
12
Höegh LNG Excelerate Golar LNG BW Gas Other
Un
its
FSRU fleet and orderbook1 by owner and employment
Committed Available Committed NB Uncommitted NB
Agenda
19
Company overview
Markets
Summary
Höegh LNG investment considerations
20
▪ Solid earnings growth trajectory
▪ Leading market position
▪ Strong industry fundamentals
▪ Proven access to diversified funding sources