Flex Lng Ltd. · NYSE:FLNG
Flex Lng — Investor Presentation (January 2019)
18 slides from Flex Lng's investor presentation, January 2019
Slide 1: Market Update
Market Update January 2019 11 | | 2017 2018
Slide 2: Company Highlights
Company Highlights • During 2017 and 2018, Flex LNG has raised $629m of equity and $473m of debt financing to increase its fleet from two to thirteen LNGCs • All thirteen LNGCs are large 174k cbm fifth generation vessels fitted with slow speed two stroke dual fuel engines (ME-GI and XDFs) resulting
Slide 3: Unique fleet comprising of 13 modern large 5th generation LNGCs
Unique fleet comprising of 13 modern large 5th generation LNGCs ME-GI and X-DF vessels are the most fuel-efficient and technically advanced LNGCs High Pressure Low pressure ME-GI with Partial ME-GI with Full X-DF ME-GI Reliquefaction System Reliquefaction System Ranger (2018) Endeavour (2018) Relian
Slide 4: The leading owner of 5th generation LNGCs
The leading owner of 5th generation LNGCs Flex LNG is the largest owner of 5 th gen LNG vessels Unit transportation costs (round-trip US gulf to China) $/MMBtu 14 Open: 13 On Order 3,5 Trading 12 Open: 0 3,0 Open: 0 Open: 5 10 2 2,5 9 Open: 4 8 2,0 7 Open: 0 6 1,5 9 Open: 2 Open: 0 Open: 0 9 4 8 4 1
Slide 5: LNG transportation in early phase of recovery
LNG transportation in early phase of recovery Estimated weekly average LNGC spot rates Natural Gas Prices by Region and Arbitrage US -> Asia Spot $/Day $ / Mmbtu 250 000 25 200 000 20 150 000 15 100 000 10 50 000 5 0 0 Apr-18 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Aug-11 Aug-12 Aug-13 Dec-
Slide 6: Steep nameplate capacity growth going in to 2019
Steep nameplate capacity growth going in to 2019 Mmtpa-Post FID Incremental LNG capacity growth 2018-2021 80 Cameron LNG Export T1-3 Cameroon FLNG 70 Coral FLNG Corpus Christi LNG T1-3 60 Elba LNG Freeport LNG T1-3 50 Ichthys T1 Petronas FLNG (Sabah) 40 Sabine Pass T2-5 Tangguh LNG T3 Wheatstone LNG
Slide 7: Resulting in glut of LNG coming to the market
Resulting in glut of LNG coming to the market Year on Year Change LNG Export Volumes Post FID AND Likely LNG Export Projects Mmtpa Mmtpa-Post FID 40 600 35 Other 500 30 North America 25 Russia 400 20 Africa 15 Indonesia 300 10 Malaysia 200 5 Australia - Qatar 100 (5) (10) 0 2008 2009 2010 2011 2012
Slide 8: Tonnage demand by key LNG export areas
Tonnage demand by key LNG export areas ~2,2 x Vsl ~2,2 x Vsl ~1,5 x Vsl ~1,4 x Vsl ~0,8 x Vsl ~1,2 x Vsl 2018 2019E # of Vessels needed to deliver 1 MT of LNG Vessel New % split gradually increasing as especially US and Country / Region % of Supply Multiplier New Export MT Demand Supply 0,70 Norther
Slide 9: Why 1.3x multiple for LNGC?
Why 1.3x multiple for LNGC? Sample routes Basic assumptions: 14 000 3,5 • Average size of 155,000 cbm is capacity of 12 000 3 68,350 tonnes 10 000 2,5 • Shipping multiple Average sailing distance: 4,000 nautical Nautical miles miles 8 000 2 • RT 8,000 nautical miles 6 000 1,5 • Average speed (ballas
Slide 10: Half of US cargoes going far east in 2018
Half of US cargoes going far east in 2018 US cargo destinations for 2018 6% 13% 52% 29% Asia Lat America Europe Middle East 10 || 2017 10 2018 Source: Poten and Reuters
Slide 11: Larger than usual movement in inventories
Larger than usual movement in inventories World Exported less Imported LNG Balance 2,00 (Adjusted for boil-off) 30,00 1,50 20,00 1,00 10,00 0,50 Vessels MT/M - - # (0,50) (10,00) (1,00) (20,00) (1,50) (2,00) (30,00) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 vsl 5y Avg vsl 2018 5y avg • In
Slide 12: El Nino conditions have resulted in higher temperatures in Pacific
El Nino conditions have resulted in higher temperatures in Pacific Sea Surface Temperature anomaly December 2018 12 || 2017 12 2018 Source: Australian Bureau of Metrology
Slide 13: Very few uncommitted vessels available before H2-2020
Very few uncommitted vessels available before H2-2020 Order book for large LNG carriers Average sailing distances (laden) Committed Open 18 4 800 16 4 600 14 12 4 400 1 Nautical Miles # Vessels 7 10 6 4 200 17 8 4 9 6 2 4 000 11 2 4 6 3 7 6 3 800 5 5 2 2 4 1 2 2 1 1 1 0 3 600 Qtr1 Qtr2 Qtr3 Qtr4 Qtr
Slide 14: Ketchup effect on ordering
Ketchup effect on ordering LNG Contracting activity 80 70 60 # No of Vesels 50 40 30 20 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 187 vessels 110 vessels 14 || 2017 14 2018 Source: Poten
Slide 15: Switching to LNG is as much health policy as energy policy
Switching to LNG is as much health policy as energy and/or environmental policy • In South Asia, air pollution larger health risk than tobacco, cancer, water sanitation and on par with dietary risk • If the air pollution improves from China's level to the American EPA standard level, that means that
Slide 16: 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. 16 || 2017 16 2018 Source: WHO/FT
Slide 17: Summary
Summary Four LNGCs on the water and nine LNGCs under Right Ships construction, all fitted with 5th generation propulsion (two-stroke low-speed engines) providing substantial fuel savings and larger parcel size The market have re-balanced and is now in early phase of Right Time recovery with higher c
Slide 18: Q&A
Q&A 18 || 2017 18 2018 2018