Flex Lng Ltd. · NYSE:FLNG
Flex Lng — Investor Day (February 2020)
92 slides from Flex Lng's investor day presentation, Feb 26, 2020
Slide 1: Q4-19 and Investor Day
Q4-19 and Investor Day February 26, 2020 1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS MATTERS DISCUSSED IN THIS PRESENTATION MAY CONSTITUTE FORWARD-LOOKING STATEMENTS. THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES SAFE HARBOR PROTECTIONS FOR FORWARD-LOOKING STATEMENTS IN ORDER TO ENCOURAGE COMPANIES TO PROVIDE PROSPECTIVE INFORMATION ABOUT T
Slide 3: Agenda
AGENDA 1. Introduction 2. Financial review 3. Market status 4. Market outlook 5. LNG as commodity 6. Sustainability and emissions 7. Summary and Q&A 8. LNG technology perspectives 9. Carbon capture 3
Slide 4: Agenda Investor Day
AGENDA INVESTOR DAY Time (CET) Activity Presenter 14:30 Registration and coffee Investor Day presentation including interim Øystein Kalleklev, CEO Flex LNG Management 15:00 report for Q4-2019 and full year 2019 Harald Gurvin, CFO Flex LNG Management Øystein Kalleklev, CEO Flex LNG Management 16:15 Q
Slide 5: Fourth Quarter Highlights
FOURTH QUARTER HIGHLIGHTS Revenues of $52.0m vs. $29.8m for Q3-19 and in line with guidance of $50-55m Time Charter Equivalent(1) rate of $94kpdr vs. $58.2kpdr for Q3-19 Adjusted EBITDA(1) of $41.9m vs. $21.8m for Q3-19 Net Income of $23.9m vs. $0.5m for Q3-19 Earnings per share of $0.44 i
Slide 6: Status and Near-Term Outlook
STATUS AND NEAR-TERM OUTLOOK LNGCs Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Flex Endeavour Spot Flex Enterprise Variable TC Options to Q1-2024 Flex Ranger Fixed TC Fixed TC Option Q2-2022 Flex Rainbow Variable TC Options to Q1-2021 Flex Constellation Spot Flex Courageous Spot Flex Aurora Yard
Slide 7: Q4 Back of Envelope Return Analysis
Q4 BACK OF ENVELOPE RETURN ANALYSIS 6 SHIPS ~$190m ~$130m ~$130m ~$70m In operation during Average book value of Average gross debt per Cash holdings at end of Average equity per ship quarter and 7 under ships in operation ship in operation year i.e. about $10m in operation when construction with no
Slide 8: Brand New State-of-the-Art Fleet
BRAND NEW STATE-OF-THE-ART FLEET High Pressure Low pressure ME-GI with Partial ME-GI with Full ME-GI Reliquefaction System X-DF Reliquefaction System Ranger (2018) Endeavour (2018) Artemis (2020) Aurora (2020) Rainbow (2018) Enterprise (2018) Resolute (2020) Amber (2020) Constellation (2019) Freedom
Slide 9: Agenda
AGENDA 1. Introduction 2. Financial review 3. Market status 4. Market outlook 5. LNG as commodity 6. Sustainability and emissions 7. Summary and Q&A 8. LNG technology perspectives 9. Carbon capture 9
Slide 10: Income Statement
INCOME STATEMENT Unaudited Figures in thousand of $ Three months ended Full year • Revenues of $52.0m vs. $29.8m for Q3-19 Dec 31, 2019 Sept 30, 2019 2019 • Adjusted EBITDA(1) of $41.9m vs. $21.8m for Q3-19 Vessel operating revenues 51,994 29,814 119,967 • Vessel operating expenses impacted by plann
Slide 11: Balance Sheet
BALANCE SHEET Unaudited Figures in thousand of $ Dec 31, 2019 Sept 30, 2019 • Solid liquidity of $129.1m as per Dec 31, 2019 • Assets consist of six vessels in operation and seven Assets newbuildings under construction Current assets Cash, restricted cash and cash equivalents 129,098 56,554 • Vessel
Slide 12: Cashflow
CASHFLOW Unaudited Figures in thousand of $ Three months ended Full year • Net cash flow from operating activities of $37.3m in Dec 31, 2019 Sept 30, 2019 2019 Q4-19, up from $8.4m in Q3-19 Net income/(loss) 23,856 468 16,967 • Net cash flow from operating activities of $51.5m Working capital adjust
Slide 13: Diversified Sources of Financing
DIVERSIFIED SOURCES OF FINANCING $442m $629m $344m Lease finacings(1) Bank facilities (1) ECA facility (2) • ~$1.3 billion in attractive financing secured in 2019 • Diversified funding between lease financing, bank financing and ECA financing • Expanded relationship with leading international financ
Slide 14: Limited Remaining Newbuilding Capex
LIMITED REMAINING NEWBUILDING CAPEX $m 1,400 1,200 349 1,000 800 600 1,286 629 400 56 200 126 - 126 (1) Newbuilding capex Pre-paid capex Financing 2020 NBs Net capex 2020 NBs Capex 2021 NBs • Pre-paid capex of $349m • 30% of purchase price ($275.4m) for Artemis/Resolute/Freedom/Volunteer/Vigilant •
Slide 15: $629M ECA Facility – 2020 Newbuildings
$629M ECA FACILITY – 2020 NEWBUILDINGS • Total facility of $629m for NBs Artemis/Resolute/Freedom/Aurora/Amber • Korea Eximbank (KEXIM) to provide $379m in direct loans and guarantees • Commercial banks to provide $250m loan • Accordion up-size option of up to $50m ($10m per vessel) in case of long-
Slide 16: $300M Lease Financing
$300M LEASE FINANCING • 10-year sale and time-charter transaction with Hyundai Glovis for Endeavour and Enterprise • $300m net consideration to Flex LNG • $420m aggregate gross sales price • $120m non-amortizing and non-interest bearing seller’s credit • Fixed monthly payment structure giving annuit
Slide 17: $157.5M Lease Financing
$157.5M LEASE FINANCING • 10-year sale and leaseback with Asian based lessor for Rainbow • Interest at LIBOR + 3.50% p.a. • Repayment profile of 20 years • Annual re-purchase options from second anniversary • $78.75m purchase option at expiry of lease • Limited financial covenants: • Max borrowings:
Slide 18: $250M Term Loan Facility
$250M TERM LOAN FACILITY • $250m bank financing for Constellation and Courageous • Interest rate of Libor+2.35% p.a. • Loan tenor of five years from final delivery in August 2019 • Repayment profile of 20 years • No requirement for fixed employment of vessels • Financial covenants linked to balance
Slide 19: $100M Term Loan and Revolving Facility
$100M TERM LOAN AND REVOLVING FACILITY • $100m bank financing for Ranger • $50m term loan • $50m revolving credit facility • Revolving facility provides flexibility in cash mgt. • Interest rate of Libor+2.25% p.a. • Loan tenor of five years and repayment profile of 19 years • No requirement for fixe
Slide 20: Staggered Debt Maturity Profile
STAGGERED DEBT MATURITY PROFILE $m 350 300 250 200 150 100 50 - $m 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 $300M Sale and Charterback $157.5M Sale and Leasback $100M Term Loan $250M Term Loan $629M ECA Facility • Long funding secured with first loan maturity in July 2024 • S
Slide 21: Agenda
AGENDA 1. Introduction 2. Financial review 3. Market status 4. Market outlook 5. LNG as commodity 6. Sustainability and emissions 7. Summary and Q&A 8. LNG technology perspectives 9. Carbon capture 21
Slide 22: Spot Market Review
SPOT MARKET REVIEW 240,000 40 1. Wide arbitrage spread between Europe to 35 Asia as well as higher netback US to Asia 200,000 than Europe. Chinese buyers very active with 30 floating storage build-up. 160,000 2. JKM correction due to El Niño weather 4 25 conditions resulting in Chinese over- TC rate
Slide 23: 2019 Trade Flows Summarized
2019 TRADE FLOWS SUMMARIZED Trade flows 2018 vs 2017 North Import • In 2018 Asia took ~93% of new production. With Asian Asia Europe America Russia RoW growth basin in deficit due to strong Chinese demand, it Asia 7.8 2.9 6.2 0.9 11.4 29.2 absorbed most volumes from North America and RoW Europe -0.1
Slide 24: The European Sink Absorbed ~34MT LNG in 2019
THE EUROPEAN SINK ABSORBED ~34MT LNG IN 2019 Europe was 8 of top 10 LNG growth markets in 2019 Low gas prices and high carbon prices spur European demand UK China France Spain Italy Bangladesh Netherlands Belgium Portugal Greece 0 2 4 6 8 10 MT 1) Source: Shell, Kpler 24
Slide 25: LNG Product Market from Backwardation to Contango
LNG PRODUCT MARKET FROM BACKWARDATION TO CONTANGO 12.0 Oil linked (JCC 13%) is basis for ~70% of delivered cargoes 10.0 8.0 $ / MMbtu 6.0 4.0 2.0 0.0 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 NBP Europe
Slide 26: We Focused on Five Factors Prior to Winter Market
WE FOCUSED ON FIVE FACTORS PRIOR TO WINTER MARKET September 2019 presentation 1) Hard winter Europe & Asia (high demand) 1) Mild winter Europe & Asia (less demand) 2) Mild winter US (low HH price and higher spreads) 2) Hard winter US (higher prices and lower spreads) 3) US / China trade conflict end
Slide 27: Main Short Term Drivers
MAIN SHORT TERM DRIVERS 1. Weather 2. Politics 4. Events 3. Economics 27
Slide 28: 1. The Weather
1. THE WEATHER • 2019 began with a El Niño causing a rather warm winter which transitioned to ENSO neutral conditions by July. • Overall 2019 was the 2nd warmest year on record • Global land and ocean surface temperature departure from average of +0.95 ֯C, only 0.04 ֯C less than the record in 2016 •
Slide 29: 2. Politics
2. POLITICS US-China Phase One Trade Agreement Russian pipelines • US and China signed Phase One trade agreement January 15, • On December 30, 2019 Naftogaz, GTSOU and Gazprom signed a 2020 where China undertakes to increase energy imports set of agreements to ensure Russian gas transit over the nex
Slide 30: 3. Economics
3. ECONOMICS Asian LNG again below coal adjusted for efficiency stimulating coal to gas switching 15.0 12.5 10.0 USD / MMbtu 7.5 5.0 2.5 0.0 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Aussie coal(USD/mmbtu) Brent(USD/mmbtu) LNG price Asia Coal adj. Eff
Slide 31: 4. Events
4. EVENTS Coronavirus (COVID-19) outbreak in China Expected impact of Coronavirus on Chinese LNG demand • Wood Mackenzie expect that the Coronavirus will affect Chinese 10.00 LNG demand adversely by 2.6 to 6.3 MT in 2020 compared to base line level prior to the outbreak. 9.00 • BNEF expect China gas
Slide 32: Agenda
AGENDA 1. Introduction 2. Financial review 3. Market status 4. Market outlook 5. LNG as commodity 6. Sustainability and emissions 7. Summary and Q&A 8. LNG technology perspectives 9. Carbon capture 32
Slide 33: ~25MT of Volume Growth Expected in 2020
~25MT OF VOLUME GROWTH EXPECTED IN 2020 380 Global LNG Exports New nameplate capacity start-up (12m rolling-sum) 362.05 40.0 90.0 360 35.0 80.0 340 70.0 30.0 14.3 320 60.0 25.0 MMtpa 50.0 300 MMtpa 20.0 15.4 40.0 280 15.0 11.0 CAGR: 11% 30.0 16.8 260 10.0 1.2 2.2 20.0 4.5 5.0 1.5 240 8.6 7.8 10.0 1.
Slide 34: 2019 Was Record Year for FID of New Capacity
2019 WAS RECORD YEAR FOR FID OF NEW CAPACITY FID of new volumes in 2019 Main contenders for FID in 2020/21 Volume MMtpa Likely FIDs Country (Mmtpa) 80 Golden Pass: 15,6 Mmtpa, brownfield 70 Sabine Pass T6: 4,5 Mmtpa, brownfield, Woodfibre LNG 2.1 Mozambique : 12,9 Mmtpa, greenfield Calcasieu Pass :
Slide 35: LNG Price of ~$7/MMBtu Required for Filling Supply Gap
LNG PRICE OF ~$7/MMBTU REQUIRED FOR FILLING SUPPLY GAP Distribution of gas reserves <$3/MMBTU 1) Source: McKinsey, SNAM Global Gas Report 2019 35
Slide 36: LNG Is the Transition Fuel
LNG IS THE TRANSITION FUEL LNG is the main transition fuel LNG becomes the main mode of international trade 20,000 40 % 9% 5 000 16 % 5% -10 % 37 % 15 % 43 % 45 % 16,000 4 000 12,000 3 000 BCM BCM Energy demand 1% CAGR Gas demand 2% CAGR 8,000 2 000 4,000 1 000 0 - 2019 Domestic Pipeline LNG Imports
Slide 37: Asia Will Continue to Be the Main Import Area
ASIA WILL CONTINUE TO BE THE MAIN IMPORT AREA Asia will continue to be the main driver for LNG demand Asia’s demand growth becomes less dependent on China 1 000 9% 750 48 % 8% 9% 74 % 800 600 28 % 600 450 23 % 1% BCM BCM 400 300 LNG demand 4% CAGR Asia LNG demand 4% CAGR 200 150 - - 2019 Asia Europe
Slide 38: The Demand Drivers
THE DEMAND DRIVERS LNG demand expected to double by 2040 Multiple drivers for increased demand MT MT 1) Source: Shell LNG Outlook 2020 38
Slide 39: India, China and Bangladesh Adding ~85MTPA Regas Capacity
INDIA, CHINA AND BANGLADESH ADDING ~85MTPA REGAS CAPACITY Global liquefaction capacity by region Global regasification capacity by region 1) Source: Affinity 39
Slide 40: Agenda
AGENDA 1. Introduction 2. Financial review 3. Market status 4. Market outlook 5. LNG as commodity 6. Sustainability and emissions 7. Summary and Q&A 8. LNG technology perspectives 9. Carbon capture 40
Slide 41: Market for Seaborne LNG Transport Maturing
MARKET FOR SEABORNE LNG TRANSPORT MATURING “LNG 1.0” : 2000: ≈100MMtpa “LNG 2.0” : 2010: ≈200MMtpa “LNG 3.0” : 2020: ≈400MMtpa • 1960s to mid-2000s • Mid-2000s to yesterday • The way of the future • Traditional liner model (P2P) • Portfolio players • Commoditization of LNG • Back2back contracts 20yr
Slide 42: LNG 3.0: The Granular View
LNG 3.0: THE GRANULAR VIEW 80 70 LNG 2.0 3rd/4th gen D/TFDE + QMAX/FLEX + Hybrid ~240 ships 60 50 LNG 3.0 # of Vessels 5th gen MEGI/XDF+Arc7 ~170 ships 40 LNG 1.0 1st/2nd gen steam ~210 ships 30 20 10 0 DFDE/TFDE MEGI/X-DF SSD Steam STGE/RHST/UST • Older steam tonnage becoming increasingly obsolete
Slide 43: LNG's Road to Commodity
LNG’S ROAD TO COMMODITY 1. Availability 5. Global prices Destination flexibility, portfolio contracts Regional rather than global prices 2. Supply/demand determines price 6. Derivative market De-linked LNG from oil price JKM, HH, TTF derivatives growing 3. Marginal cargo follows the money 7. Low tra
Slide 44: Maturing LNG Contracts Will Facilitate Spot Market
MATURING LNG CONTRACTS WILL FACILITATE SPOT MARKET • Stage 1: Spot market is the residual market for excess cargoes • Stage 2: Spot market becomes the marginal market for cargoes • Stage 3: Physical market start functioning in parallel with derivative market • Stage 4: Spot market turns into the 1 2
Slide 45: Agenda
AGENDA 1. Introduction 2. Financial review 3. Market status 4. Market outlook 5. LNG as commodity 6. Sustainability and emissions 7. Summary and Q&A 8. LNG technology perspectives 9. Carbon capture 45
Slide 46: The IMO GHG Emissions Roadmap Summarized
THE IMO GHG EMISSIONS ROADMAP SUMMARIZED 1) Source: DNV GL 46
Slide 47: There Is No Silver Bullet to Meet the IMO 2050 Challenge
THERE IS NO SILVER BULLET TO MEET THE IMO 2050 CHALLANGE 1) Source: DNV GL 47
Slide 48: LNG Is the Best Technical and Commercially Available Fuel
LNG IS THE BEST TECHNICAL AND COMMERCIALLY AVAILABLE FUEL Assessment of the various fuel options LNG is a technical mature and commercially ready solution Natural gas won’t decarbonize shipping, but the fuel is here to stay “I see LNG as the best available solution over the next 20 years. If we want
Slide 49: LNG to Become the Dominant Maritime Fuel
LNG TO BECOME THE DOMINAT MARITIME FUEL Market share in 2050 • In all three pathways modelled by DNV GL, liquefied methane (LNG) ends up dominating the fuel mix (40%–80% in 2050), but the primary energy source of the methane varies between fossil, biomass and other renewables. 1) Source: DNV GL 49
Slide 50: What Seems to Be on Everyone's Lips: Methane Slip
WHAT SEEMS TO BE ON EVERYONE’S LIPS: METHANE SLIP Warming effect from emitting Combined effect: worsening in more CO2 in the short term. the long term Cooling effect from avoiding short-term warming gases, such as CH4. Methane (CH4) have a half life of ~12 years while CO2 stays in atmosphere for cen
Slide 51: The Global Methane Budget
THE GLOBAL METHANE BUDGET 1) Source: Global Carbon Project 51
Slide 52: About 40% of Methane Emission Reductions Are Profitable
ABOUT 40% OF METHANE EMISSION REDUCTIONS ARE PROFITABLE Profitable to eliminate 1) Source: IEA 52
Slide 53: Methane Emissions Are on Top of Agenda for Gas Companies
METHANE EMISSIONS ARE ON TOP OF AGENDA FOR GAS COMPANIES • The Oil and Gas Climate Initiative (OGCI) member have agreed a target to reduce by 2025 the collective average methane intensity of its aggregated upstream gas and oil operations by one fifth to below 0.25%, with the ambition to achieve 0.20
Slide 54: Methane Emissions - Not Just a Natural Gas Issue
METHANE EMISSIONS - NOT JUST A NATURAL GAS ISSUE Tonnes of CO2 e/toe Estimated emission reduction for natural gas vs. coal Additionally, the global average efficiency of natural gas Coal is responsible for 40% of global SOx emissions fired plants are 52% vs. 42% for coal fired plants resulting in an
Slide 55: Air Pollution - A Glocal Problem
AIR POLLUTION - A “GLOCAL” PROBLEM • 9 out of 10 people breathe unhealthy air. • 6.5 million pre-mature deaths every year caused by outdoor and household air pollution. 55 Source: WHO/FT
Slide 56: Implemented SASB ESG Reporting
IMPLEMENTED SASB ESG REPORTING • Flex LNG has implemented the Sustainability Accounting Standards Board (SASB) guidelines and will publish a yearly ESG report based on this framework. The report includes information about: » Environmental Footprint of Fuel Use » Ecological Impacts » Business Ethics
Slide 57: Agenda
AGENDA 1. Introduction 2. Financial review 3. Market status 4. Market outlook 5. LNG as commodity 6. Sustainability and emissions 7. Summary and Q&A 8. LNG technology perspectives 9. Carbon capture 57
Slide 58: Summary
SUMMARY • We deliver our best ever financial results with revenues of $52m in line with guidance of $50-55m and EPS of 44 cents per share • LNG freight market affected near term by combination of glut of LNG and reduced demand from China following Coronavirus outbreak • Anticipate Q1-20 TCE close to
Slide 59: Q&A
A Q&A FLEX LNG we ~~ ——.
Slide 60: Agenda
AGENDA 1. Introduction 2. Financial review 3. Market status 4. Market outlook 5. LNG as commodity 6. Sustainability and emissions 7. Summary and Q&A 8. LNG technology perspectives 9. Carbon capture 60
Slide 61: LNG Technology Perspectives
LNG Technology Perspectives Lars Pedersen, MD Flex LNG Fleet Management AS 61
Slide 62: Cost Efficient Organization
COST EFFICIENT ORGANIZATION CTO`s Office Shared functions (including digital platform & IT) Wet Flex LNG NewBuildings Drybulk & (Tankers & Fleet Sea Team and Projects Container LPG) Management Contracting & Strategic Procurement HSEQ & Vetting Human Elements Budget & Cost Performance Controlling & A
Slide 63: Brand New State-of-the-Art Fleet
BRAND NEW STATE-OF-THE-ART FLEET High Pressure Low pressure ME-GI with Partial ME-GI with Full ME-GI Reliquefaction System X-DF Reliquefaction System Ranger (2018) Endeavour (2018) Artemis (2020) Aurora (2020) Rainbow (2018) Enterprise (2018) Resolute (2020) Amber (2020) Constellation (2019) Freedom
Slide 64: Managed >300 Newbuildings Last 15 Years
MANAGED >300 NEWBUILDING LAST 15 YEARS Our group newbuilding department has managed over 300 newbuilding projects since 2004 with currently 31 vessels under constructions Control of the entire newbuilding process from contract specifications to delivery and commissioning of vessels Dedicated s
Slide 65: Why We Bring Fleet Management In-House
In-house Asset Management Why we bring fleet management in-house: • LNG is complex • Long term perspective of assets • Business driven Document of Compliance achieved from DNV GL on October 17, 2019 65
Slide 66: Ship Management in a Nutshell
SHIP MANAGEMENT IN A NUTSHELL Safety, People & Environment • We want everyone to return safely & zero spills at sea Lean & Efficient management team • Keep it simple and focused We are taking Ship Build credibility with charterers, Management in- investors & financiers • Reliable & cost competitive
Slide 67: Milestones for Flex LNG Fleet Management
MILESTONES FOR FLEX LNG FLEET MANAGEMENT October 2019 – Document of Compliance November 2019 – Flex Enterprise transfered to FFM January 2020 – Flex Rainbow transfered to FFM January, 2020 – Flex Endeavour transfered to FFM February, 2020 – Flex Courageous transfered to FFM Flex Enterprise: Successf
Slide 68: People & Safety
PEOPLE & SAFETY • Safe and efficient performance relies on competent and empowered crew. • Our crew are an integral part of our strategy. Our core values Future-Driven Leadership Empowering eXceptional We deploy a We are committed to We encourage and We want to make a simplicity mindset the highest
Slide 69: The Maritime Eco-System
THE MARITIME ECO-SYSTEM Get in Front VERACITY by DNVGL Operational insight through analytics Smart search and data management See our marketplace at oor vesoey x) ” oe : FRONTLINE 69
Slide 70: Veracity by DNV GL
VERACITY BY DNV GL TA ‘cee |{RGNEE| tow | emer | MP li Vetting Performance Overview Ww x Total Vessels Total Vetting Inia Risks Final Riskw = Resolved 68 650 1797 7™ 1221 ia ere) r - ait - = aate Z 7 a — © |S - spn" : your entire > ~ ~ i ‘eet with . reevant F 999 999 am 9 = 999 Personnel Customer- C
Slide 71: Newer Vessels Are Much More Efficient
NEWER VESSELS ARE MUCH MORE EFFICIENT Fuel consumption/day Boil off ratio • Improved propulsion design has reduced fuel (tons) @ 19.5 knots (%) 0.15 consumption and boil off rate over recent years 220 200 • Two-stroke ME-GI and XDF engines have plateaued the 180 consumption development for now 160 0
Slide 72: Newer Motor Ships Have Less Methane Slip
NEWER MOTOR SHIPS HAVE LESS METHANE SLIPS • Steam vessels has no methane slip, but have a high fuel CH4 emissions from main engine g/kW@ 85% engine load consumption due to their inefficient combustion system with 5 thermal efficiency of ~35% 4 • Shift to (diesel) motor ships represent more efficient
Slide 73: Responsible Operations
RESPONSIBLE OPERATIONS • Flex LNG is committed to responsible operations • Our operations are built on a long-term value creation approach and include environmental, social and governance criteria Actions Commitments KPIs • Application of ESG criteria to our operations • Transparent industry specifi
Slide 74: Agenda
AGENDA 1. Introduction 2. Financial review 3. Market status 4. Market outlook 5. LNG as commodity 6. Sustainability and emissions 7. Summary and Q&A 8. LNG technology perspectives 9. Carbon capture 74
Slide 75: CO2 Capture Technology at a Glance
CO2 Capture technology at glance A presentation for Flex LNG Investor day, Oslo 236th of Feb 2020
Slide 76: Agenda
Agenda • A couple of ways to reduce CO2 emissions • Why gas is one of the ways • The 3C technology at glance
Slide 77: Man-made emissions sum up to 36 billion tonnes CO2/year
Man made emissions sums up to 36 bill tonne CO2/year
Slide 78: There is a lot of ways to reduce CO2 emissions
There is a lot of ways to reduce CO2 emissions Change of attitude Increased efficiency The use of green energy Capture
Slide 79: Compact Carbon Capture
COMPACT Ko) CARBON CAPTURE
Slide 80: Modern increased efficiency
Modern increased efficiency
Slide 81: World primary energy supply by source
World primary energy supply by source Units: EJ/yr = eS =| = Gi = ai) = = 1980 1990 2000 2010 2020 2030 2040 2050 Historical data source: IEA WEB (2018) Wind Solar PV Solar thermal Hydropower Biomass Geothermal Nuclear fuels Natural gas Oil Coal We are approaching a future where the world will need
Slide 82: Slide 82
Slide 83: How much backup power is needed when all is renewable?
How much backup power is needed when all is renewable? 440 Mw 9
Slide 84: Slide 84
Slide 85: How CO2 capture works
CO2 cooled before How CO2 capture works storage Solvent cooled before use Solvent absorbs CO2 from flue gas
Slide 86: TCM Mongstad
COMPACT K®) CARBON CAPTURE
Slide 87: A model of 3C in industrial scale
A model of 3C in industrial scale
Slide 88: We are solving several challenges
We are solving several challenges Available space: 75% reduction in size CAPEX: 50% reduction Modulebased Scalability Opex and effectiveness The Total refinery in Antwerp, Source: www.total.com
Slide 89: Soon to be ready for market
COMPACT CARBON CAPTURE xo)
Slide 90: 3C is revolutionary for many markets
3C is revolutionary for many markets
Slide 91: We are young but experienced
We are young but experienced Energy Innovation Pioneer 17
Slide 92: Thank you for the attention!
Thank you for the attention! for Torleif Madsen – tkm@fjelltg.com www.compactcarbon.com Torleif Madsen – CEO tkm@compactcarbon.com Tel: +47 920 43 429 www.compactcarbon.com