Business Context and Reporting Period
This Form 6-K filing by Golar LNG Limited covers the month of August 2013 and reports on a press release dated July 31, 2013. The company, a provider of Floating Storage and Regasification (FSRU) services, announced the execution of a firm time charter agreement with the Government of the Hashemite Kingdom of Jordan.
Key Financial Metrics
The filing does not provide current period revenue, profit, cash flow, margins, debt, or liquidity figures. It focuses on the projected financial impact of the new contract:
- Contract Duration: 10 years.
- Projected Annual EBITDA (Years 1-5): Approximately USD 46 million.
- Projected Annual EBITDA (Years 6-10): Approximately USD 43 million.
- Revenue Commencement: Expected during the first quarter of 2015.
Material Changes and Contract Details
The primary material event is the execution of the Jordan FSRU Time Charter Party. Key operational details include:
- Vessel: Golar Eskimo.
- Location: Moored at a purpose-built structure off the Red Sea port of Aqaba, constructed by the Aqaba Development Corporation.
- Capacity: Storage of 160,000 cubic meters of LNG; delivery up to 500 MMSCFD with a peaking capacity of 750 MMSCFD.
- Infrastructure: Connection to the Jordan Gas Transmission Pipeline to supply power plants.
- Termination: The Government holds an option to terminate after year five, subject to an early termination fee.
Outlook, Management Commentary, and Risks
CEO Doug Arnell stated the agreement reconfirms Golar's leading position in FSRU services and will assist Jordan in ensuring gas supply security. Management indicated the vessel will be offered for sale to Golar LNG Partners, a transaction expected to release significant cash for Golar LNG and generate growth and dividend potential for the Partners.
Risks and Contingencies: The filing includes standard forward-looking statements warning that actual results may differ materially due to uncertainties and contingencies beyond the company's control. The commencement of earnings is contingent on the construction of the mooring structure and regulatory approvals.
Investor Verification Checklist
- Verify the construction timeline and completion status of the purpose-built structure in Aqaba to confirm the Q1 2015 revenue start date.
- Confirm the status of the proposed sale of the Golar Eskimo to Golar LNG Partners and the associated cash release.
- Review the specific terms of the early termination fee applicable after year five.
- Assess the creditworthiness and payment history of the Government of Jordan as the counterparty.