GOLAR LNG LTD (Form: 6-K, Received: 09/29/2017 10:26:47)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the month of September 2017

Commission File Number: 000-50113

GOLAR LNG LIMITED

(Translation of registrant's name into English)

2nd Floor

S.E. Pearman Building

9 Par-la-Ville Road

Hamilton HM 11

Bermuda

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F [ X ] Form 40-F [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ].

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ].

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Included is the Overview and Operating and Financial Review for the six months ended June 30, 2017 and the unaudited condensed consolidated interim financial statements of Golar LNG Limited (the "Company" or "Golar") as of and for the six months ended June 30, 2017 .

Exhibits

The following exhibits are filed as part of this report on Form 6-K:



4.1	Purchase and Sale Agreement by and among Golar LNG Limited, KS Investments Pte. Ltd., Black & Veatch International Company and Golar Partners Operating LLC, dated August 15, 2017
101	The following financial information of Golar LNG Limited formatted in Extensible Business Reporting Language (XBRL):
	i. Unaudited Consolidated Statements of Income for the six months ended June 30, 2017 and 2016;
	ii. Unaudited Consolidated Statements of Comprehensive Income for the six months ended June 30, 2017 and 2016;
	iii. Unaudited Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016;
	iv. Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016;
	v. Unaudited Consolidated Statements of Changes in Equity for the six months ended June 30, 2017 and 2016; and
	vi. Notes to the Unaudited Condensed Consolidated Financial Statements.

The information contained in this Report on Form 6-K is hereby incorporated by reference into the Company's registration statement on Form F-3 ASR (File no. 333-219095), which was filed with the U.S. Securities and Exchange Commission on June 30, 2017.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	GOLAR LNG LIMITED
	(Registrant)


Date: September 29, 2017	By:	/s/ Brian Tienzo
	Name:	Brian Tienzo
	Title:	Chief Financial Officer

UNAUDITED CONDENSED INTERIM FINANCIAL REPORT

Forward Looking Statements

This report and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. When used in this report, the words "believe", "anticipate", "intend", "estimate", "forecast", "project", "plan", "potential", "may", "should", "expect", and similar expressions identify forward-looking statements.

The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. As a result, you are cautioned not to rely on any forward-looking statements.

In addition to these important factors and matters discussed elsewhere herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include among other things:


•	changes in liquefied natural gas, or LNG, carrier, floating storage and regasification unit, or FSRU, or floating liquefaction natural gas vessel, or FLNG, market trends, including charter rates, vessel values or technological advancements;


•	changes in our ability to retrofit vessels as FSRUs or FLNGs and in our ability to obtain financing for such conversions or our joint ventures on acceptable terms or at all;


•	changes in the timeliness of the Hilli Episeyo (the " Hilli ") conversion, commissioning and delivery;


•	changes in the supply of or demand for LNG carriers, FSRUs or FLNGs;


•	a material decline or prolonged weakness in rates for LNG carriers, FSRUs or FLNGs;


•	changes in the performance of the pool in which certain of our vessels operate and the performance of our joint ventures;


•	changes in trading patterns that affect the opportunities for the profitable operation of LNG carriers, FSRUs or FLNGs;


•	changes in the supply of or demand for LNG or LNG carried by sea;


•	changes in the supply of or demand for natural gas generally or in particular regions;


•	failure of our contract counterparties, including our joint venture co owners, to comply with their agreements with us;


•	changes in our relationships with our counterparties, including our major chartering parties;


•	changes in the availability of vessels to purchase and in the time it takes to construct new vessels;


•	failures of shipyards to comply with delivery schedules or performance specifications on a timely basis or at all;


•	our ability to integrate and realize the benefits of acquisitions;


•	changes in our ability to close the sale of the equity interests in Hilli on a timely basis or at all;


•	changes in our ability to sell vessels to Golar Partners, or our joint venture Golar Power Limited, or Golar Power;


•	changes in our relationship with Golar Partners, Golar Power or our joint venture OneLNG S.A;


•	changes to rules and regulations applicable to LNG carriers, FSRUs, FLNGs or other parts of the LNG supply chain;


•	our inability to achieve successful utilization of our expanded fleet or inability to expand beyond the carriage of LNG and provisions of FSRUs particularly through our innovative FLNG strategy and our JVs;


•	actions taken by regulatory authorities that may prohibit the access of LNG carriers, FSRUs or FLNGs to various ports;


•	our inability to achieve successful utilization of our expanded fleet or inability to expand beyond the carriage of LNG and provision of FSRUs, particularly through our innovative FLNG strategy, or FLNG, and our joint ventures;


•	changes in our ability to obtain additional financing on acceptable terms or at all;


•	our ability to make additional equity funding payments to Golar Power and OneLNG to meet our obligations under each of the respective shareholders' agreements;


•	increases in costs, including, among other things, crew wages, insurance, provisions, repairs and maintenance;


•	changes in general domestic and international political conditions, particularly where we operate;


•	a decline or continuing weakness in the global financial markets;


•	challenges by authorities to the tax benefits we previously obtained under certain of our leasing agreements; and


•	other factors listed from time to time in registration statements, reports or other materials that we have filed with or furnished to the Securities and Exchange Commission, or the Commission, including our most recent annual report on Form 20-F.

We caution readers of this report not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward looking statements are not guarantees of our future performance, and actual results and future developments may vary materially from those projected in the forward looking statements.

All forward-looking statements included in this report are made only as of the date of this report and, except as required by law, we assume no obligation to update any written or oral forward-looking statements made by us or on our behalf as a result of new information, future events or other factors. If one or more forward-looking statements are updated, no inference should be drawn that additional updates will be made.

The following is a discussion of our financial condition and results of operations for the six months ended June 30, 2017 and 2016 . Unless otherwise specified herein, references to "the Company", "Golar", "we", "us", and "our" refer to Golar LNG Limited and any one or more of its consolidated subsidiaries, or to all such entities. References to “Golar Partners” or the “Partnership” refer to Golar LNG Partners LP and to any one or more of its direct and indirect subsidiaries. References to “Golar Power” refer to Golar Power Limited and to any one or more of its direct and indirect subsidiaries. References to “OneLNG” refer to OneLNG S.A. You should read the following discussion and analysis together with the financial statements and related notes included elsewhere in this report. For additional information relating to our operating and financial review and prospects, including definitions of certain terms defined herein, please see our annual report on Form 20-F for the year ended December 31, 2016 , which was filed with the Commission on May 1, 2017.

Overview

We are a midstream LNG company engaged primarily in the transportation, regasification, liquefaction and trading of LNG. We are engaged in the acquisition, ownership, operation and chartering of LNG carriers and FSRUs and the development of LNG projects, such as FLNGs, through our subsidiaries, affiliates and joint ventures.

As of September 29, 2017 , we, together with our affiliates Golar Partners and Golar Power, have a combined fleet of 26 vessels, comprised of seven FSRUs and 19 LNG carriers. Of these vessels, six of the FSRUs and four of the LNG carriers (including the Golar Grand ) ⁽¹⁾ are owned by Golar Partners and are mostly on long-term time charters. Three of our vessels are undergoing or being contemplated for conversion into FLNGs, including the Hilli (with target completion during the second half of 2017), the Gimi and the Gandria . Ten of our LNG carriers (including Golar Power's two vessels) are participating in the LNG carrier pool, referred to as the Cool Pool. In addition, our affiliate Golar Power has one newbuilding commitment for the construction of a FSRU, which is scheduled for delivery in the second half of 2018.

We intend to leverage our relationships with existing customers and continue to develop relationships with other industry participants. Our goal is to earn higher margins through maintaining strong service-based relationships combined with flexible and innovative LNG shipping, FSRU and FLNG solutions. We believe customers place their confidence in our shipping, storage, regasification and liquefaction services based on the reliable and safe way we conduct our, our affiliates’ and our joint ventures’ LNG operations.

⁽¹⁾ Under the Option Agreement executed in connection with the disposal of the Golar Grand to Golar Partners in 2012, we are obligated to charter back the vessel from Golar Partners until October 2017.

Recent Developments

Since January 1, 2017 , the significant developments that have occurred are as follows:

Convertible bonds - 2017

On February 17, 2017, we issued a new $402.5 million 2.75% senior unsecured convertible bond due in 2022. The conversion rate for the bonds will initially equal 26.5308 common shares per $1,000 principal amount of the bonds. This is equivalent to an initial conversion price of $37.69 per common share, or a 35% premium on the February 13, 2017 closing share price of $27.92. The conversion price is subject to adjustment for dividends paid. To mitigate the dilution risk of conversion to common equity, we also entered into capped call transactions costing approximately $31.2 million. The capped call transactions cover approximately 10,678,647 common shares, have an initial strike price of $37.69, and an initial cap price of $48.86. The cap price of $48.86, which is a proxy for the revised conversion price, represents a 75% premium on the February 13, 2017 closing share price of $27.92. Including the $31.2 million cost of the capped call, the all-in cost of the bond is approximately 4.3%. Bond proceeds, net of fees and the cost of the capped call, amounted to $360.2 million.

Golar Crystal refinancing

On March 14, 2017, we completed the refinancing of the Golar Crystal . The financing structure funded 60% of the market value of the Golar Crystal . At funding, the vessel was simultaneously bareboat chartered by the Company at a fixed rate for a firm period of 10 years.

Margin Loan Facility

We entered into a loan agreement, dated March 3, 2017, among one of our wholly-owned subsidiaries, as borrower, Golar LNG Limited, as guarantor, Citibank, N.A., as administrative agent, initial collateral agent and calculation agent, and Citibank, N.A., as lender. We refer to this as the Margin Loan Facility. Pursuant to the Margin Loan Facility, on March 3, 2017, Citibank, N.A. provided a loan in the amount of $150 million. The Margin Loan Facility has a term of three years, an interest rate of LIBOR plus a margin and is secured by our Golar Partners common units and their associated distributions, and in certain cases, cash or cash equivalents. The Margin Loan Facility contains conditions, representations and warranties, covenants (including loan to value requirements), mandatory prepayment events, facility adjustment events, events of default and other provisions customary for a facility of this nature. The loan was primarily used to pay a portion of the amounts due under our 3.75% convertible senior secured bonds due March 2017, or the Prior Convertible Bonds. Concurrently with the repayment of the Prior Convertible Bonds, the trustee for these bonds released our Golar Partners common units that had been pledged to secure them. In connection with the entry into the Margin Loan Facility, we pledged 20,852,291 Golar Partners common units as security for the obligations under the facility.

Golar Tundra

In February 2016, we entered into a purchase agreement for the sale of our equity interests in the company (“Tundra Corp”) that is the disponent owner and operator of the Golar Tundra to Golar Partners. The Golar Tundra was expected to commence operations under a time charter with West Africa Gas Limited (“WAGL”) in the second quarter of 2016. However, due to delays in the project, this has not yet occurred, primarily due to the required infrastructure, including a connecting pipeline, jetty and breakwater, not yet being in place. The Golar Tundra remains anchored off the coast of Ghana and the project has made limited progress. In light of this, on May 30, 2017, Golar Partners elected to exercise its Put Right to require us to repurchase Tundra Corp at a price equal to the original purchase price (the “Tundra Put Sale”) Golar Partners paid in its acquisition of Tundra Corp (the “Purchase Price”). In connection with the exercise of the Put Right, we and Golar Partners have entered into an agreement pursuant to which we have agreed to purchase Tundra Corp from Golar Partners on the date of the closing of the Tundra Put Sale (the “Put Sale Closing Date”) for an amount equal to approximately $107 million (the “Deferred Purchase Price”) plus an additional amount equal to 5% per annum of the Deferred Purchase Price (the “Additional Amount”). The Deferred Purchase Price and the Additional Amount shall be due and payable by us on the earlier of (a) the date of the closing of the acquisition of the Hilli Shares (as defined below) and (b) March 31, 2018. Golar Partners have agreed to accept the Deferred Purchase Price and the Additional Amount in lieu of a cash payment on the Put Sale Closing Date in return for an option (which Golar Partners have exercised) to purchase an interest in the Hilli .

The Hilli

On August 15, 2017, we entered into a purchase and sale agreement (the “Hilli Sale Agreement”) with Golar Partners for the disposal (the “Hilli Disposal”) from Golar and affiliates of Keppel Shipyard Limited (“Keppel”) and Black and Veatch (“B&V”) of common units (the “Disposal Interests”) in Hilli LLC, which will, on the closing date of the Hilli Disposal, indirectly own the Hilli . The Disposal Interests represent the equivalent of 50% of the two liquefaction trains, out of a total of four, that will be contracted to Perenco Cameroon (“Perenco”), Societe Nationale de Hydrocarbures (“SNH”) and the Republic of Cameroon (together with Perenco and SNH, the “Customer”) under an eight-year liquefaction tolling agreement (the “Liquefaction Tolling Agreement”). The sale price for the Disposal Interests is $658 million less net lease obligations under the financing facility for the Hilli (the “Hilli Facility”), which are expected to be between $468 and $480 million. Concurrently with the execution of the Hilli Sale Agreement, we received a further $70 million deposit from Golar Partners, upon which we will pay interest at a rate of 5% per annum.

The closing of the Hilli Disposal is subject to the satisfaction of certain closing conditions which include, among others, the execution and delivery of the Liquefaction Tolling Agreement by the parties thereto, receiving the consent of the lenders under the Hilli Facility, the closing of the previously announced Tundra Put Sale (described above), the delivery to and acceptance by the Customer of the Hilli , the commencement of commercial operations under the Liquefaction Tolling Agreement and the formation of Hilli LLC and the related Pre-Closing Contributions as described further below. In addition, in connection with the closing, Golar Partners expect to provide a several guarantee of 50% of Golar Hilli Corp’s ("Hilli Corp") indebtedness under the Hilli Facility.

Prior to the closing of the Hilli Disposal, we, along with Keppel and B&V, will contribute our equity interests in Hilli Corp, the entity that owns the Hilli , to the newly formed Hilli LLC (the “Pre-Closing Contributions”) in return for equity interests in Hilli LLC. Membership interests in Hilli LLC will be represented by three classes of units: Common Units (“Hilli Common Units”); Series A Special Units (“Series A Units”); and Series B Special Units (“Series B Units”).

The operating agreement of Hilli LLC, which is expected to be entered into effective as of the closing date, will provide that, within 60 days after the end of each quarter, we, in our capacity as the managing member of Hilli LLC, shall determine the amount of Hilli LLC’s available cash and appropriate reserves (including cash reserves for future maintenance capital expenditures, working capital and other matters), and Hilli LLC shall make a distribution to the members of Hilli LLC (the “Members”) of the available cash, subject to such reserves. Hilli LLC shall make distributions to the Members when, as and if declared by us, provided, however, that no distributions may be made on the Hilli Common Units on any distribution date unless (i) Series A Distributions (defined below) for the most recently ended quarter and any accumulated Series A Distributions in arrears for any past quarter have been or contemporaneously are being paid or provided for and (ii) Series B Distributions (defined below) for the most recently ended quarter and any accumulated Series B Distributions in arrears for any past quarter have been or contemporaneously are being paid or provided for.

The Series A Units shall be entitled to receive the “Series A Distributions”, which means, with respect to any quarter, 100% of any “Incremental Perenco Revenues” received by Hilli Corp during such quarter. “Incremental Perenco Revenues” generally means:


a.	any cash received by Hilli Corp from revenues invoiced to the extent such revenues invoiced are based on tolling fees under the Liquefaction Tolling Agreement relating to an increase in the Brent Crude price above $60 per barrel; less


b.	any incremental tax expense arising from, or related to, any cash receipts referred to in clause (a) above; less


c.	the pro-rata portion of any costs that may arise as a result of the underperformance of the Hilli (“Underperformance Costs”) incurred by Hilli Corp during such quarter.

Series B Units shall be entitled to receive the “Series B Distributions”, which means, with respect to any quarter, an amount equal to 95% of “Revenues Less Expenses” received by Hilli Corp during such quarter. “Revenues Less Expenses” generally means:

the cash receipts from revenues invoiced by Hilli Corp as a direct result of the employment of more than the first fifty percent of LNG production capacity for the Hilli , before deducting any Underperformance Costs (unless the incremental capacity above the first fifty percent is supplied under the terms of the Liquefaction Tolling Agreement and the term of the Liquefaction Tolling Agreement is not expanded beyond 500 billion cubic feet of feed gas), excluding, for the avoidance of doubt, any Incremental Perenco Revenues; less


b.	any incremental costs whatsoever, including but not limited to operating expenses, capital costs, financing costs and tax costs, arising as a result of employing and making available more than the first fifty percent of LNG production capacity for Hilli FLNG; less


c.	any reduction in revenue attributable to the first fifty percent of LNG production capacity availability as a result of making more than fifty percent of capacity available under the Liquefaction Tolling Agreement (including, but not limited to, for example, as a result of a tolling fee rate reduction as contemplated in the Liquefaction Tolling Agreement); less


d.	the pro-rata share of Underperformance Costs incurred by Hilli Corp during such quarter.

Upon the closing of the Hilli Disposal, which is expected to occur on or before April 30, 2018, we, along with Keppel and B&V, will sell 50% of the Hilli Common Units to Golar Partners in return for the payment by Golar Partners of the net purchase price of between approximately $178 and $190 million. Golar Partners will apply the $107 million Deferred Purchase Price receivable from us in connection with the Tundra Put Sale and the $70 million deposit referred to above against the net purchase price and will pay the balance with cash on hand.

The description of the Hilli Sale Agreement contained in this report is a summary and is qualified in its entirety by reference to the terms of the Hilli Sale Agreement, which is filed as an exhibit to this report.

Liquefaction Tolling Agreement

In October 2015, Hilli Corp entered into a binding term sheet for FLNG tolling services with the Customer for the development of the Hilli Project. The binding term sheet has been converted into a Liquefaction Tolling Agreement and we expect that the Liquefaction Tolling Agreement will be executed in the second half of 2017. The Hilli is scheduled to provide liquefaction services under the Liquefaction Tolling Agreement for a term of the earlier of (i) eight years from the date the delivered Hilli is accepted by the Customer (the “Acceptance Date”), or (ii) at the time of receipt and processing by the Hilli of 500 billion cubic feet of feed gas. The commissioning process of testing the Hilli and preparing it for service is expected to commence in November 2017, and under the Liquefaction Tolling Agreement, the commercial start date to begin providing liquefaction services is the earlier of 180 days after the scheduled commissioning start date or the Acceptance Date, as may be extended by the parties. Under the terms of the Liquefaction Tolling Agreement, the Hilli will be required to make available 1.2 million tonnes of liquefaction capacity per annum, which capacity will be spread evenly over the course of the contract year. The Customer will pay Hilli a monthly tolling fee, which will fluctuate to a certain extent in relation to the price of Brent Crude. We expect that under the Liquefaction Tolling

Agreement, the Customer will have an option to increase liquefaction capacity. We expect that the Liquefaction Tolling Agreement will provide certain termination rights to the Customer and Hilli Corp. The Liquefaction Tolling Agreement will provide for the payment by Hilli Corp of penalties of up to $400 million in the event of Hilli Corp’s underperformance or non-performance. If the Customer elects to terminate the Liquefaction Tolling Agreement prior to the second anniversary of the Acceptance Date, the Customer will be obligated to pay Hilli Corp $400 million, with termination payments decreasing if the Liquefaction Tolling Agreement is terminated after the second anniversary.

Dividends

In May 2017, we declared a dividend of $0.05 per share in respect of the quarter ended March 31, 2017 to holders of record on June 16, 2017, which was paid on July 5, 2017.

In August 2017, we declared a dividend of $0.05 per share in respect of the quarter ended June 30, 2017 to holders of record on September 14, 2017, which will be paid on or about October 4, 2017.

Fortuna Project

On May 2, 2017, OneLNG, our joint venture, together with Ophir Energy, GEPetrol and The Republic of Equatorial Guinea (the "Fortuna Project Participants”), signed an Umbrella Agreement that defines the full legal and fiscal framework for the 2.6Tcf Fortuna gas reserves, offshore Equatorial Guinea. Subsequent to June 30, 2017 , the Fortuna Project Participants also agreed the LNG sales structure, and selected Gunvor Group Ltd. (“Gunvor”) as off-taker. Principal commercial terms have been agreed with Gunvor for a sale and purchase agreement covering 2.2mtpa of LNG over a 10 year term. The LNG will be sold on a Brent-linked FOB basis. The LNG offtake structure also permits the Fortuna Project Participants to market up to 1.1mtpa of the above 2.2mtpa to higher priced gas markets and to share in any resultant profits. The Fortuna Project Participants have two years post final investment decision to secure alternative markets for this 1.1mtpa after which any unsold portion will revert to Gunvor. Final investment decision is expected to occur by the end of 2017.

Appointment of new CEO

In September 2017, we appointed Mr. Iain Ross to replace Mr. Oscar Spieler as CEO. Mr. Spieler's main remit on becoming CEO has always been the successful delivery of Hilli and a search for his successor to follow shortly thereafter. Having substantially executed his responsibility to deliver the Hilli , Mr. Spieler will nevertheless remain with the group and fulfill the role of Executive Advisor and assist Mr. Ross until charterers Perenco and SNH accept the Hilli .

Change in chairman and directors

On September 28, 2017, at the annual general meeting, the board of directors (the "Board") nominated Mr. Tor Olav Trøim to succeed Mr. Daniel Rabun as chairman. Mr. Rabun will, however, continue to serve as a member of the Board. Mr. Trøim has served as a director of the Company since September 2011. In addition, the Board appointed Mr. Michael Ashford, the company secretary, as a director.

Operating and Financial Review

Six Month Period Ended June 30, 2017 compared with the Six Month Period Ended June 30, 2016

Vessels operations segment



	Six months ended June 30,
(in thousands of $, except average daily TCE)	2017		2016		Change		% Change
Operating revenues (including revenue from collaborative arrangement)	53,518		34,927		18,591		53	%
Vessel operating expenses	(25,043	)	(29,637	)	4,594		(16	)%
Voyage, charterhire and commission expenses (including expenses from collaborative arrangement)	(28,737	)	(23,278	)	(5,459	)	23	%
Administrative expenses	(22,320	)	(19,141	)	(3,179	)	17	%
Depreciation and amortization	(42,552	)	(39,149	)	(3,403	)	9	%
Impairment of long-term assets	—		(1,706	)	1,706		(100	)%
Other non-operating gain	206		—		206		100	%
Interest income	2,912		1,091		1,821		167	%
Interest expense	(39,710	)	(34,823	)	(4,887	)	14	%
Other financial items, net	(7,928	)	(40,881	)	32,953		(81	)%
Income taxes	(647	)	1,285		(1,932	)	(150	)%
Equity in net losses of affiliates	(2,606	)	(5,563	)	2,957		(53	)%
Net loss	(112,907	)	(156,875	)	43,968		(28	)%
Net loss attributable to non-controlling interests	(15,931	)	(12,229	)	(3,702	)	30	%
Net loss attributable to Golar LNG Ltd	(128,838	)	(169,104	)	40,266		(24	)%
Average Daily TCE ⁽¹⁾ (to the closest $100)	13,600		8,600		5,000		58	%


⁽¹⁾	Time Charter Equivalent, or TCE, is a non-GAAP financial measure. See the section of this report entitled "Non-GAAP measures" for a discussion of TCE.

Operating revenues: Total operating revenues increased by $18.6 million to $53.5 million for the six months ended June 30, 2017 compared to $34.9 million for the same period in 2016 . This was principally due to an increase of:


•	$17.7 million from the improved utilization and daily hire rates, including repositioning fees, from our vessels participating in the Cool Pool for the six months ended June 30, 2017 compared to the same period in 2016;


•	$1.1 million revenue from the Golar Arctic which was fully utilized for the six months ended June 30, 2017 compared to the same period in 2016 when she was mostly off-hire during the first quarter in preparation for her floating storage unit charter on March 23, 2016 with New Fortress Energy in Jamaica; and

•

$4.7 million in management fee income, from $4.8 million to $9.5 million for the six months ended June 30, 2016 and 2017, respectively, from the provision of services to Golar Partners, Golar Power and OneLNG under our management and administrative services and fleet management agreements. The increase is a result of the services provided to Golar Power and OneLNG which had no comparable amount in 2016.

These are partially offset by a decrease of $4.3 million in revenue in 2017, from Golar Penguin and Golar Celsius following the deconsolidation of Golar Power, and thus its fleet, effective in July 2016.

Vessel operating expenses: Vessel operating expenses decreased by $4.6 million to $25.0 million for the six months ended June 30, 2017 , compared to $29.6 million for the same period in 2016 , primarily due to the following:


•	a decrease of $4.3 million in relation to the Golar Penguin and Golar Celsius following the deconsolidation of Golar Power, and thus its fleet, from July 2016;


•	a decrease of $1.4 million from Golar Arctic and Golar Tundra , as they incurred higher upstoring and repairs and maintenance costs in preparation for the Fortress charter which commenced in 2016 and the WAGL charter which was to commence in 2016, respectively; and


•	partially offset by an increase of $1.5 million in fleet management costs due to change in classification of fleet management related administrative costs to vessel operating costs for the six months ended June 30, 2017 , following our in-housing of technical operations.

As a result of higher revenue and lower voyage expenses incurred by most of our vessels within the period, we had a higher daily time charter equivalent, or TCE, for the six months ended June 30, 2017 of $13,600 compared to $8,600 for the same period in 2016. See the section of this report entitled "Non-GAAP measures" for a discussion of TCE.

Voyage, charterhire and commission expenses: Voyage, charterhire and commission expenses largely relate to charterhire expenses, fuel costs associated with commercial waiting time and vessel positioning costs. While a vessel is on-hire, fuel costs are typically paid by the charterer, whereas during periods of commercial waiting time, fuel costs are paid by us. The increase in voyage, charterhire and commission expenses of $5.5 million to $28.7 million for the six months ended June 30, 2017 compared to $23.3 million for the same period in 2016 was primarily due to:


•	an increase of $9.9 million of voyage expenses primarily due to repositioning fees that arose from the increased utilization of our vessels participating in the Cool Pool, which are subsequently recouped from the charterer;

•

a decrease of $0.9 million in charterhire expense relating to the charter back of the Golar Grand from Golar Partners until October 2017. This comprises of a reduction of $5.5 million in amounts payable to Golar Partners under the charter back arrangement for the six months ended June 30, 2017 as compared to 2016. The decrease is mainly due to the Golar Grand’s drydocking from February to April 2017. No charterhire is payable during periods of drydocking. This decrease is partially offset by the recognition of expense of $4.2 million, comprising of an incremental $9.0 million upon re-measurement of the existing Golar Grand guarantee obligation, net of the related amortization income recognized in the six months ended June 30, 2017;


•	a decrease of $2.0 million from Golar Penguin and Golar Celsius following the deconsolidation of Golar Power, and thus its fleet, from July 2016; and


•	a decrease of $0.6 million from Golar Arctic as she incurred significant voyage costs prior to commencement of her two year floating storage unit charter on March 23, 2016 with New Fortress Energy in Jamaica. There was no comparable amount for the six months ended June 30, 2017.

Administrative expenses: Administrative expenses increased by $3.2 million to $22.3 million for the six months ended June 30, 2017 compared to $19.1 million for the same period in 2016 . This was primarily due to an increase in salaries and benefits of $4.5 million mainly as a result of an increase in headcount and $0.5 million in travel costs in connection with the various new ventures and associated projects entered into during the second half of 2016 such as Golar Power and OneLNG. This was partially offset by (i) a decrease of $2.8 million in legal and professional fees; and (ii) a general decrease following a change in the classification of fleet management related administrative costs to vessel operating expenses as discussed under vessel operating expenses above.

Depreciation and amortization: Depreciation and amortization increased by $3.4 million to $42.6 million for the six months ended June 30, 2017 compared to $39.1 million for the same period in 2016 . This was primarily due to:


•	an increase of $11.6 million in depreciation expense in 2017 relating to the Golar Tundra . This includes a $9.7 million depreciation catch up charge recognized upon ceasing to be classified as held for sale in March 2017;

These are partially offset by a decrease in depreciation and amortization of:


•	$5.6 million from Golar Penguin and Golar Celsius following the deconsolidation of Golar Power, and thus its fleet, from July 2016; and


•	$2.6 million from the Gimi as she was at the end of her useful life as at December 31, 2016.

Impairment of long-term assets: During the six months ended June 30, 2016 , we realized an impairment charge amounting to $1.7 million related to equipment classified as "Other long-term assets" due to the uncertainty of its future usage. There was no comparable charge for the same period in 2017.

Interest income: Interest income increased by $1.8 million to $2.9 million for the six months ended June 30, 2017 compared to $1.1 million for the same period in 2016 . The increase was primarily due to the returns on our fixed deposits that had been made during the six months ended June 30, 2017 using the proceeds from our $150.0 million margin loan and $402.5 million convertible bonds.

Interest expense: Interest expense increased by $4.9 million to $39.7 million for the six months ended June 30, 2017 compared to $34.8 million for the same period in 2016 and is primarily due to:


•	an increase of $4.2 million in relation to the $402.5 million convertible bond issued in February 2017 which replaced the old $250 million convertible bond, which was repaid in early March 2017;


•	an increase of $9.2 million interest expense largely due to the out of period correction of capitalized interest on borrowing costs in respect of the Hilli FLNG conversion recognized in the six months ended June 30, 2016; and


•	an increase of $2.5 million from the $150.0 million margin loan that we entered into in March 2017.

These are partially offset by:


•	a $8.0 million decrease in interest expense arising on the loan facilities of our consolidated Lessor VIEs;


•	a decrease of $5.6 million from the Golar Penguin and Golar Celsius relating to interest expense incurred prior to the deconsolidation of Golar Power in July 2016; and


•	a $2.8 million write off of deferred finance charges as a result of the refinancing of the Golar Seal debt in March 2016. There is no comparable write off in 2017.

Other financial item s : Other financial items decreased by $33.0 million to a loss of $7.9 million for the six months ended June 30, 2017 compared to a loss of $40.9 million for the same period in 2016 . The movement was primarily due to:

Net realized and unrealized (losses) gains on interest rate swap agreements : Net realized and unrealized losses on interest rate swaps decreased to a loss of $3.3 million for the six months ended June 30, 2017 from a loss of $35.1 million for the same period in 2016 , as set forth in the table below:



	Six months ended June 30,
(in thousands of $)	2017		2016		Change	% Change
Mark-to-market adjustment for interest rate swap derivatives	(603	)	(29,390	)	28,787	(98	)%
Interest expense on undesignated interest rate swaps	(2,706	)	(5,741	)	3,035	(53	)%
Net realized and unrealized losses on interest rate swap agreements	(3,309	)	(35,131	)	31,822	(91	)%

As of June 30, 2017 , we have an interest rate swap portfolio with a notional amount of $1.3 billion, none of which are designated as hedges for accounting purposes. The decrease in mark-to-market losses from our interest rate swaps is due to the stability in the long-term swap rates for the six months ended June 30, 2017 , as opposed to a significant decrease in the long-term swap rates for the six months ended June 30, 2016 .

Unrealized (losses) gains on total return swap (or equity swap): In December 2014, we established a three month facility for a Stock Indexed Total Return Swap Programme or Equity Swap Line with DNB Bank ASA in connection with a share buyback scheme. The facility has been subsequently extended to December 2017. The equity swap derivatives mark-to-market adjustment resulted in a net loss of $4.3 million recognized in the six months ended June 30, 2017 compared to a net gain of $3.4 million for the same period in 2016 .

Impairment loss on loan receivable: Given the announcement of a negative Final Investment Decision from the Douglas Channel Project consortium, we reassessed the recoverability of the loan (including accrued interest receivable) previously granted by Golar to Douglas Channel LNG Assets Partnership ("DCLAP") and concluded that DCLAP would not have the means to satisfy its obligations under the loan. Accordingly, during the six months ended June 30, 2016, we recognized an impairment charge of $7.6 million . There was no comparable amount for the six months ended June 30, 2017.

Income taxes: Income taxes relate principally to the taxation of U.K. based entities.

Equity in net (losses) earnings of affiliates:



	Six months ended June 30,
(in thousands of $)	2017		2016		Change	% Change
Share of net loss in Golar Partners	(2,906	)	(5,525	)	2,619	(47	)%
Share of net earnings (loss) in other affiliates	300		(38	)	338	(889	)%
	(2,606	)	(5,563	)	2,957	(53	)%

Although Golar Partners reported a higher than normal net income, in the six months ended June 30, 2017, which was primarily due to recognition of the Golar Spirit termination fee, our equity in net earnings from Golar Partners resulted in a loss as this was offset by the amortization of the basis difference, in relation to the recognition in 2012 of a fair value gain on deconsolidation. In addition we recognized a deemed loss on disposal of $17.0 million in 2017 as a result of a dilution in our holding in Golar Partners following additional equity issuances in February 2017.

Net income attributable to non-controlling interests: During 2017, we were party to sale and leaseback arrangements for seven vessels (2016: six) with subsidiaries of Chinese financial institutions. Each of these lessor entities are wholly-owned, newly formed special purpose vehicles ("SPVs"). We have determined that the lessor entities, that own the vessels, are variable interest entities. We refer to these as "VIEs" or the "Lessor VIEs". While we do not hold any equity investments in these Lessor VIEs, we are the primary beneficiary. Accordingly, these Lessor VIEs are consolidated into our financial results and thus the equity attributable to the financial institutions in their respective VIEs are included in non-controlling interests in our consolidated results.

LNG trading segment



	Six months ended June 30,
(in thousands of $)	2017	2016	Change		% Change
Other operating gains and losses	—	16	(16	)	100	%
Net income	—	16	(16	)	100	%

In the six months ended June 30, 2016 , we entered into a Purchase and Sales Agreement to buy and sell LNG cargo. The LNG cargo was acquired from a third party and subsequently sold on a delivered basis to New Fortress Energy in March 2016 when the Golar Arctic was repositioning to Jamaica in preparation for her charter as a floating storage unit with New Fortress Energy. There was no LNG trading activity for the six months ended June 30, 2017 .

FLNG segment



	Six months ended June 30,
(in thousands of $)	2017		2016		Change		% Change
Administrative expenses	(226	)	(2,124	)	1,898		(89	)%
Share of net loss in OneLNG	(3,126	)	—		(3,126	)	100	%
Net loss	(3,352	)	(2,124	)	(1,228	)	58	%

The net loss for FLNG for the six months ended June 30, 2017 and 2016 amounted to $3.4 million and $2.1 million , respectively. This relates to FLNG project related expenses comprising of legal, professional, consultancy costs and pursuant to the formation of OneLNG in July 2017, our share of net losses in OneLNG.

FLNG conversion

In September 2014, the Hilli was delivered to Keppel Shipyard Management ("Keppel") in Singapore for commencement of her FLNG conversion. The total estimated conversion, vessel and site commissioning cost for the Hilli , including contingency, is approximately $1.3 billion.

As of June 30, 2017, the total costs incurred and capitalized in respect of the Hilli conversion amounted to $855.9 million .

Other FLNG conversions

In December 2014 our subsidiary that owns the Gimi entered into a contract with Keppel for the conversion of the Gimi to a FLNG, subject to certain conditions to the contract effectiveness and notice to proceed with the conversion. This agreement is similar to the agreement that we have entered into with respect to the Hilli conversion.

On December 27, 2016, the Gimi contract was extended to December 31, 2017, and all conditions to the contract’s effectiveness, including payments of $30 million to Keppel, were satisfied as of January 2017. The contract requires issuing a final notice to proceed and a payment of $95 million by December 30, 2017 to proceed with the conversion.

We have negotiated and agreed a new contract for the conversion of the Gandria , which we anticipate will be executed in connection with OneLNG making a final investment on the Fortuna Project by the end of 2017.

The total estimated conversion, vessel and site commissioning cost for the conversion of the Gimi and the Gandria , including contingency, is approximately $1.2 billion and $1.5 billion, respectively. As June 30, 2017, we have made $31.0 million of payments relating to long lead items ordered in preparation for the conversion of the Gimi to a FLNG.

Power segment



	Six months ended June 30,
(in thousands of $)	2017		2016	Change		% Change
Equity in net losses of Golar Power	(7,461	)	—	(7,461	)	(100	)%
Net loss	(7,461	)	—	(7,461	)	(100	)%

Since the deconsolidation of Golar Power in July 2016, we have accounted for our remaining 50% ownership interest under the equity method. Our share of net losses in Golar Power principally relates to trading activity of the Golar Celsius and the Golar Penguin operating as LNG carriers within the Cool Pool arrangement.

Liquidity and Capital Resources

Our short-term liquidity requirements are primarily for the servicing of debt, working capital requirements, investments in Golar Power and OneLNG and conversion project related commitments due within the next 12 months. The short-term outlook in the LNG shipping market has improved over the last few months. Whilst certain challenges remain, the first half of 2017 started showing signs of recovery, as anticipated, with a general improvement in utilization and hire rates. Such improvement is forecast to continue in the second half of 2017. However, the extent and the pace of the recovery and the impact on the Company's results is unknown. Accordingly, we may require additional working capital for the continued operation of our vessels in the spot market (via the Cool Pool). The need for additional working capital is dependent upon the employment of the vessels participating in the Cool Pool and fuel costs incurred during idle time. We remain responsible for manning and technical management of our vessels in the Cool Pool. We estimate that total forecast vessel operating expenses relating to our eight vessels in the Cool Pool (excluding the two vessels that form part of the Golar Power fleet) for the next 12 months is $37.0 million, based on our historical average operating costs. However, we have limited working capital requirements for the Hilli , which is currently undergoing conversion to a FLNG vessel, as progress payments are funded by the FLNG Hilli facility. Additionally, we require a small amount of working capital for our three vessels that are currently in lay-up.

As of June 30, 2017 , we had cash and cash equivalents (including restricted cash and short-term deposits) of $781.6 million, of which $438.4 million is restricted cash and short-term deposits. Included within restricted cash is $232.4 million in respect of the issuance of the letter of credit to our FLNG project partners, an aggregate of $76.2 million cash collateral relating to requirements under our total return equity swap and interest rate swaps, and the balance which mainly relates to the cash belonging to our Lessor VIEs that we are required to consolidate under U.S. GAAP.

Since June 30, 2017 , significant transactions impacting our cash flows include:

Receipts:


•	receipt of a $70 million deposit from Golar Partners upon entry into the purchase and sale agreement for the acquisition by Golar Partners of equity interests in Hilli LLC, which will, on the closing date of the acquisition, indirectly own the FLNG, the Hilli ; and

•

receipt of $12.9 million in August 2017, in respect of cash distributions for the quarter ended June 30, 2017 , from Golar Partners in relation to our interests in its common and general partner units held at the relevant record date, albeit $12.1 million was used to satisfy principal and interest repayments on the Margin Loan Facility (defined below) as a result of 20,852,291 of Golar Partners common units held by us being pledged as security for the obligations under the facility.

Payments:


•	payment of $5.1 million in cash distributions to our shareholders in July 2017, in respect of the quarter ended March 31, 2017;


•	additional capital contributions of $27 million to Golar Power in September 2017; and


•	payment of scheduled loan and interest repayments.

A pre-condition of the Golar Tundra lease financing with CMBL (refer to note 7 - Variable Interest Entities, to our consolidated financial statements) is for the FSRU to be employed under an effective charter. The recent delays with the WAGL charter and the recent termination of that charter by us, means that we now have to find a replacement charter by June 30, 2018 or we could be required to refinance the FSRU. Accordingly, to address our anticipated working capital requirements over the next 12 months, in the event we are unable to secure a replacement charter for the Golar Tundra, we are currently exploring our refinancing options. We may also look to refinance our other newbuildings. While we believe we will be able to obtain the necessary funds from these refinancings, we cannot be certain that the proposed new credit facilities will be executed in time or at all. However, we have a track record of successfully financing and refinancing our vessels, even in the absence of term charter coverage. Recent successes include the refinancing of the Golar Crystal in March 2017. In addition to vessel refinancings, if market and economic conditions are favorable, we may also consider further issuances of corporate debt or equity to increase liquidity, as demonstrated by our convertible bond offering in February 2017, which raised net proceeds of $360.2 million. We also entered into a Margin Loan Facility in March 2017, which raised proceeds of $150 million.

Furthermore, with respect to our Golar Power joint venture with Stonepeak, under the shareholders' agreement, we and Stonepeak have agreed to contribute additional funding to Golar Power, on a pro rata basis, including (i) an aggregate of a approximately $150 million in the period through to the third quarter of 2018; and (ii) additional amounts as may be required by Golar Power, subject to the approval of its board of directors. In connection with Golar Power’s election in October 2016 to increase its ownership interest in the Sergipe project from 25% to 50% by buying out the project developer GenPower, this is expected to result in an additional funding requirement of between $20 million to $50 million to be shared with Stonepeak, with the initial $20 million being required on financial close of the project financing for the power plant, which is expected to occur by December 31, 2017.

In connection with our joint venture OneLNG, under the joint venture and shareholders' agreement with Schlumberger, once a OneLNG project reaches final investment decision, we and Schlumberger will each be required to provide $250 million of new equity. Contributions to this new equity may include intellectual property amongst other items. As further described in the 20-F for the year ended December 31, 2016, OneLNG and Ophir Energy (“Ophir”) have signed a shareholders' agreement to develop a project in Equatorial Guinea. The effectiveness of the shareholders' agreement is subject to certain conditions precedent including final investment decisions by OneLNG and Ophir, securing of financing and governmental approval which may occur in the second half of 2017. Accordingly, we anticipate, in the event of a final investment decision, to fund the estimated $2 billion project cost, assuming debt financing of $1.2 billion and Ophir’s investment of $150 million, OneLNG will be expected to invest approximately $650 million (this is inclusive of the aggregate of $500 million new equity required under the OneLNG shareholders' agreement). The cash contribution from the Company to the project remains uncertain as the timing of capital expenditure for the project is not yet finalized due to the payment profile of certain contracts continuing to be negotiated. Furthermore, the amount of our contribution to the project within the next twelve months will be determined by the timing of the final investment decision, which is yet to be taken. Our recent financings will contribute towards our 51% share of the equity contribution into OneLNG in the

2017 to 2020 period. Credit can be expected for both the intellectual property and the LNG carrier Gandria contributed by Golar into the Equatorial Guinea project.

Our medium and long-term liquidity requirements are primarily for funding the investments for our conversion projects including investments into our new joint ventures, Golar Power and OneLNG, as discussed above, and repayment of long-term debt balances. Sources of funding for our medium and long-term liquidity requirements include new loans, refinancing of existing financing arrangements, public and private debt or equity offerings, potential sales of our interests in our vessel owning subsidiaries operating under long-term charters (including that of the Hilli ), and potential use of our investment in the common units of Golar Partners subject to adherence to certain debt covenant requirements as to the maintenance of minimum holdings.

In connection with the conversion of the Hilli to a FLNG, we entered into the FLNG Hilli facility in September 2015. The FLNG Hilli facility is designed to fund up to 80% of the project cost and is split into two phases: a pre-delivery credit facility and post-delivery sale and leaseback financing. The first phase enables us to draw down up to 60% of the construction cost, however not more than $700 million, from the pre-delivery facility to fund the ongoing conversion. The second phase is triggered upon the delivery of the converted Hilli from Keppel and the satisfaction of certain additional performance milestones, and will allow for the aggregate draw down of up to 80% of the construction cost, however not more than an aggregate of $960 million. We expect that all remaining conversion and commissioning costs for the Hilli will be satisfied by this debt facility, but additional costs may arise. To date we have drawn down $375 million under the pre-delivery facility. As of June 30, 2017 , the outstanding capital commitments in relation to the Hilli conversion was $366.0 million

We have also executed FLNG conversion contracts for both the Gimi and the Gandria . As of the current date, we have not executed notices to proceed for either vessel. As of June 30, 2017 , we have made $31.0 million of advances in relation to the conversion of the Gimi , but none for the Gandria . The Gimi conversion contract provides us flexibility wherein certain beneficial cancellation provisions exist which, if exercised prior to contract expiry, will allow termination of the contracts and recovery of previous milestone payments, less cancellation fees. The Gimi contract has been extended to expire in December 2017. The Gandria contract has been renegotiated in anticipation of the Fortuna Project taking final investment decision during the second half of 2017. In view of the prevailing uncertainty in the energy markets and the delay in the timing of the final investment decision of Ophir's Fortuna Project to the latter part of 2017, we do not intend to accelerate the conversion of either vessel before satisfactory financing and/or firm client contracts are in place.

Borrowing activities

For the six months ended June 30, 2017 , we have entered into the following new debt facilities:

Convertible bonds - 2017

Crystal VIE loan

In March 2017, in connection with the refinancing of the Golar Crystal , we entered into a sale and leaseback transaction pursuant to which we sold the Golar Crystal to a COSCO Shipping entity ("Crystal Lessor VIE"), and leased back the vessel under a bareboat charter for a monthly hire rate.

Crystal Lessor VIE, which is the legal owner of the Golar Crystal , financed the purchase of the vessel through an internal loan from COSCO Shipping. Crystal Lessor VIE was determined to be a VIE of which we are deemed to be the primary beneficiary and, as a result, we are required to consolidate the results of Crystal Lessor VIE. Although consolidated into our results, we have no control over the funding arrangements negotiated by Crystal Lessor VIE, such as interest rates, maturity, and repayment profiles. In consolidating Crystal Lessor VIE, we must make certain assumptions regarding the debt amortization profile and the interest rate to be applied against Crystal Lessor VIE's debt principal. The internal loan bears no interest and is repayable on demand.

Margin Loan Facility

Hilli pre-delivery facility

During the six months ended June 30, 2017 , we drew down an additional $125 million under the debt facility such that, as of June 30, 2017 , the balance outstanding was $375 million. For additional details on the facility, refer to the 20-F for the year ended December 31, 2016.

Security, Debt and Lease Restrictions

Certain of our financing agreements are collateralized by vessel mortgages and, in the case of some debt, pledges of shares by each guarantor subsidiary. In addition, under certain of our financing agreements, we have provided security in the form of general assignments covering insurances and earnings, account charges, charters and related stock pledges. The existing financing agreements impose operating and financing restrictions which may significantly limit or prohibit, among other things, our ability to incur additional indebtedness, create liens, sell capital shares of subsidiaries, make certain investments, engage in mergers and acquisitions, purchase and sell vessels, enter into time or consecutive voyage charters or pay dividends without the consent of the relevant lenders. In addition, lenders may accelerate the maturity of indebtedness under financing agreements and foreclose upon the collateral securing the indebtedness upon the occurrence of certain events of default, including a failure to comply with any of the covenants contained in the financing agreements. Many of our debt agreements contain certain covenants, which require compliance with certain financial ratios. Such ratios include maintaining positive working capital ratio, tangible net worth covenant and minimum free cash restrictions. With regards to cash restrictions, Golar has covenanted to retain at least $50 million of cash and cash equivalents on a consolidated group basis. In addition, there are cross default provisions in certain of our and Golar Partners' loan and lease agreements.

Cash Flow



	Six Months Ended June 30,
(in thousands of $)	2017		2016		Change		% Change
Net cash used in operating activities	(31,163	)	(59,204	)	28,041		(47	)%
Net cash used in investing activities	(198,480	)	(5,944	)	(192,536	)	3,239	%
Net cash provided by financing activities	348,679		24,633		324,046		1,315	%
Net increase (decrease) in cash and cash equivalents	119,036		(40,515	)	159,551		(394	)%
Cash and cash equivalents at beginning of period	224,190		105,235		118,955		113	%
Cash and cash equivalents at end of period	343,226		64,720		278,506		430	%

Net cash used in operating activities was $31.2 million for the six months ended June 30, 2017 , compared to $59.2 million for the same period in 2016 , representing an improvement of $28.0 million . The decrease in cash utilized in operating activities in 2017 was primarily due to (i) improved contributions, as a result of improved utilization and daily hire rates, from our vessels participating in the Cool Pool, (ii) lower charterhire expense relating to the charter-back of the Golar Grand from Golar Partners as a result of her drydocking in 2017, (iii) lower operating costs in relation to the Golar Penguin and Golar Celsius following the deconsolidation of Golar Power, and thus its fleet, from July 2016, and (iv) the improvement on the general timing of working capital in the six months ended June 30, 2017 .

Net cash used in investing activities of $198.5 million for the six months ended June 30, 2017 arose mainly due to:


•	milestone payments of $133.7 million in respect of the conversion of the Hilli to a FLNG;


•	additional capital contributions of $57.1 million to Golar Power; and


•	net cash outflows of $6.5 million from restricted cash primarily due to the increase in cash collateral requirements provided against our total return equity swap.

Net cash used in investing activities of $5.9 million for the six months ended June 30, 2016 arose mainly due to:


•	installment payments of $19.2 million in respect of our newbuilding commitment for the construction of a FSRU;


•	milestone payments of $74.3 million in respect of the conversion of the Hilli to a FLNG;


•	additions to vessels and equipment of $13.3 million; and


•	net cash outflows of $5.4 million from restricted cash primarily due to the increase in cash collateral requirements provided against our total return equity swap.

This was partially offset by purchase consideration received of $107.2 million from Golar Partners in respect of the sale of the Golar Tundra in May 2016.

Net cash provided by financing activities is principally generated from funds from new debt, debt refinancings, debt repayments and cash dividends. Net cash provided by financing activities was $348.7 million for the six months ended June 30, 2017 and arose primarily due to total proceeds of $778.4 million from short-term and long-term debts, including:


•	$125 million further drawdown on the FLNG Hilli facility in relation to the conversion of the Hilli to a FLNG;


•	$112 million of debt proceeds in connection with our refinancing of the Golar Crystal debt facility (see note 7, “Variable Interest Entities” of our unaudited condensed consolidated financial statements contained herein);


•	$150 million of debt proceeds from the Margin Loan Facility entered into in March 2017; and


•	$391.4 million of debt proceeds from the new convertible bond which closed in February 2017.

This was partially offset by:


•	loan repayments of $371.3 million, which includes the settlement of the balance outstanding on the refinanced Golar Crystal facility of $101.3 million in March 2017 as well as the buyback of the old convertible bond, which matured in March 2017, amounting to $219.7 million;


•	payment of $31.2 million for capped call transactions entered into in conjunction with the issuance of the new convertible bond mentioned above;


•	payment of dividends of $10.3 million; and


•	net cash outflows of $15.4 million relating to restricted cash balances held by our lessor VIEs as well as the cash collateral requirements with respect to the Golar Bear and Golar Frost financing arrangements.

Net cash provided by financing activities for the six months ended June 30, 2016 of $24.6 million arose primarily due to proceeds from short-term and long-term debts, including:


•	$100 million further drawdown on the FLNG Hilli facility in relation to the conversion of the Hilli to a FLNG; and

•

an additional $205.8 million of debt proceeds which refers to amounts drawn down by our lessor VIEs under their respective loan arrangements, in connection with our refinancing of the Golar Seal debt facility amounting to $162.4 million, the releveraging of the Golar Tundra lease by $25.5 million and the balance of $17.9 million relating to short-term debt proceeds arising in the ICBCL lessor VIEs.

This was partially offset by:


•	loan repayments of $164.4 million, which includes the settlement of the balance outstanding on the refinanced Golar Seal facility of $106.6 million in March 2016;


•	payment of dividends of $45.1 million;


•	net cash outflows of $59.1 million relating to restricted cash balances held by our lessor VIEs as well as the cash collateral requirements with respect to the Golar Celsius and Golar Crystal financing arrangements; and


•	purchases of our common shares (treasury shares) in the Company amounting to an aggregate cost of $8.2 million.

Non-GAAP measures

Time Charter Equivalent

The average time charter equivalent, or TCE, rate of our fleet is a measure of the average daily revenue performance of a vessel. For time charters, this is calculated by dividing total operating revenues (including revenue from The Cool Pool but excluding vessel and other management fee), less any voyage expenses, by the number of calendar days minus days for scheduled off-hire. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses. However, we may incur voyage related expenses when positioning or repositioning vessels before or after the period of a time charter, during periods of commercial waiting time or while off-hire during drydocking. TCE rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in an entity's performance despite changes in the mix of charter types (i.e. spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. We include average daily TCE, a non-GAAP measure, as we believe it provides additional meaningful information in conjunction with total operating revenues, the most directly comparable GAAP measure, because it assists our management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. Our calculation of TCE may not be comparable to that reported by other entities. The following table reconciles our total operating revenues to average daily TCE:



	Six months ended June 30,
(in thousands of $ except number of days and average daily TCE)	2017		2016
Operating revenues	53,518		34,927
Less: Vessel and other management fee	(9,495	)	(4,769	)
Time and voyage charter revenues ⁽¹⁾	44,023		30,158
Voyage expenses ^{(1) (3)}	(18,302	)	(11,750	)
	25,721		18,408
Calendar days less scheduled off-hire days ⁽²⁾	1,888		2,149
Average daily TCE (to the closest $100)	13,600		8,600

⁽¹⁾ This includes revenue and voyage expenses from the collaborative arrangement in respect of the Cool Pool amounting to $11.7 million and $12.8 million and $5.9 million and $2.8 million, respectively, for the six months ended June 30, 2017 and 2016.

⁽²⁾ This excludes days when vessels are in lay-up, undergoing dry dock or undergoing conversion.

⁽³⁾ The TCE calculation excludes net charterhire expenses for the six months ended June 30, 2017 and 2016, which arose on the charter-back of the Golar Grand from Golar Partners.

GOLAR LNG LIMITED

INDEX TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PAGE



Unaudited Consolidated Statements of Income for the six months ended June 30, 2017 and 2016				13

Unaudited Consolidated Statements of Comprehensive Income for the six months ended June 30, 2017 and 2016				14

Unaudited Consolidated Balance Sheets as of June 30, 2017 and for the year ended December 31, 2016				15

Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016				16

Unaudited Consolidated Statements of Changes in Equity for the six months ended June 30, 2017 and 2016				18

Notes to the Unaudited Condensed Consolidated Financial Statements				19

GOLAR LNG LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME



(in thousands of $, except per share amounts)		Six months ended June 30,
	Notes	2017			2016
Time and voyage charter revenues ⁽¹⁾		32,284			24,222
Time charter revenues - collaborative arrangement ⁽¹⁾	14	11,739			5,936
Vessel and other management fee ⁽¹⁾		9,495			4,769
Operating revenues	4	53,518			34,927

Vessel operating expenses		25,043			29,637
Voyage and charterhire expenses ⁽¹⁾		15,965			20,474
Voyage and charterhire expenses - collaborative arrangement ⁽¹⁾	14	12,772			2,804
Administrative expenses		22,546			21,265
Depreciation and amortization	2	42,552			39,149
Impairment of long-term assets		—			1,706
Total operating expenses		118,878			115,035

Other operating gains and losses		—			16
Operating loss		(65,360		)	(80,092		)

Other non-operating income
Other		206			—
Total other non-operating income		206			—

Financial income (expenses)
Interest income		2,912			1,091
Interest expense ⁽¹⁾		(39,710		)	(34,823		)
Other financial items, net	6	(7,928		)	(40,881		)
Net financial expenses		(44,726		)	(74,613		)

Loss before taxes and equity in net losses of affiliates		(109,880		)	(154,705		)
Income taxes		(647		)	1,285
Equity in net losses of affiliates	9	(13,193		)	(5,563		)

Net loss		(123,720		)	(158,983		)
Net income attributable to non-controlling interests		(15,931		)	(12,229		)
Net loss attributable to Golar LNG Ltd		(139,651		)	(171,212		)
Basic and diluted loss per share ($)	5	(1.39		)	(1.84		)

Cash dividends declared and paid per share ($)		$	0.10		$	0.10

⁽¹⁾ This includes amounts arising from transactions with related parties (see note 14).

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GOLAR LNG LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



(in thousands of $)		Six months ended June 30,
(in thousands of $)	Notes	2017		2016

Net loss		(123,720	)	(158,983	)

Other comprehensive income:
Net income on qualifying cash flow hedging instruments		1,632		1,092
Other comprehensive income	12	1,632		1,092
Comprehensive loss		(122,088	)	(157,891	)

Comprehensive (loss) income attributable to:

Stockholders of Golar LNG Limited		(138,019	)	(170,120	)
Non-controlling interests		15,931		12,229
		(122,088	)	(157,891	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GOLAR LNG LIMITED

UNAUDITED CONSOLIDATED BALANCE SHEETS



		2017	2016
(in thousands of $)	Notes	June-30	Dec-31
		Unaudited	Unaudited ⁽⁴⁾
ASSETS
Current
Cash and cash equivalents		343,226	224,190
Restricted cash and short-term deposits ⁽¹⁾		205,227	183,693
Trade accounts receivable ⁽³⁾		5,556	3,567
Inventory		6,810	7,257
Other receivables, prepaid expenses and accrued income		7,415	7,510
Total current assets		568,234	426,217
Non-current
Restricted cash		233,144	232,335
Investment in affiliates	9	668,707	648,780
Cost method investments		7,347	7,347
Asset under development	8	855,949	731,993
Vessels and equipment, net		2,110,537	2,153,831
Other non-current assets	10	54,340	56,408
Total assets		4,498,258	4,256,911

LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Current portion of long-term debt and short-term debt, net of deferred finance charges ⁽¹⁾⁽²⁾	11	919,918	451,454
Trade accounts payable		12,597	24,559
Accrued expenses		92,929	78,462
Other current liabilities		83,871	78,984
Amounts due to related parties	14	4,428	135,668
Total current liabilities		1,113,743	769,127
Non-current
Long-term debt, net of deferred finance charges ⁽¹⁾	11	1,403,112	1,525,744
Amounts due to related parties	14	107,247	—
Other long-term liabilities		51,510	52,214
Total liabilities		2,675,612	2,347,085

Equity
Stockholders' equity		1,760,151	1,863,262
Non-controlling interests		62,495	46,564

Total liabilities and stockholders' equity		4,498,258	4,256,911

⁽¹⁾ Included within restricted cash and short-term deposits and debt balances are amounts relating to certain lessor entities (for which legal ownership resides with financial institutions) that we are required to consolidate under US GAAP into our financial statements as variable interest entities (see note 7).

⁽²⁾ The Hilli pre-delivery debt facility has been classified as current in our consolidated balance sheet. As disclosed in note 25 - Debt, in our consolidated financial statements in our 2016 Form 20-F, we have secured post-delivery sale and leaseback financing for the Hilli . However, under US GAAP we expect we will be required to consolidate the lessor as a variable interest entity. Accordingly, the above classification reflects the lessor’s present financing arrangements.

⁽³⁾ This includes amounts arising from transactions with related parties (see note 14).

⁽⁴⁾ Previously, the assets and liabilities associated with the agreement to sell our interests in the companies that own and operate the FSRU the Golar Tundra to Golar Partners were classified as held-for-sale. As of March 31, 2017, these assets and liabilities ceased to qualify for classification as held-for-sale. Accordingly, as of June 30, 2017 (and for all retrospective periods presented), these assets and liabilities are presented as held and used in the consolidated balance sheets. See note 2.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GOLAR LNG LIMITED UNAUDITED CONSOLIDATED STATEMENTS OF CASHFLOWS

	2017		2016
(in thousands of $)	Jan-Jun		Jan-Jun


OPERATING ACTIVITIES
Net loss	(123,720	)	(158,983	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	42,552		39,149
Amortization of deferred tax benefits on intra-group transfers	—		(1,715	)
Amortization of deferred charges and guarantees ⁽¹⁾	(667	)	12,439
Equity in net losses of affiliates	13,193		5,563
Dividends received	25,655		26,689
Compensation cost related to stock options	3,875		2,784
Net foreign exchange loss	1,121		821
Impairment of long-term assets	—		1,706
Impairment of loan receivable	—		7,627
Restricted cash and short-term deposits	(405	)	(217	)
Change in assets and liabilities:
Trade accounts receivable	(1,989	)	(2,493	)
Inventories	447		2,648
Prepaid expenses, accrued income and other assets	714		19,903
Amounts due from/to related companies	(23,992	)	12,093
Trade accounts payable	(2,319	)	(57,051	)
Accrued expenses and deferred income	15,934		11,390
Other liabilities	18,438		18,443
Net cash used in operating activities	(31,163	)	(59,204	)

GOLAR LNG LIMITED UNAUDITED CONSOLIDATED STATEMENTS OF CASHFLOWS

	2017		2016
(in thousands of $)	Jan-Jun		Jan-Jun

INVESTING ACTIVITIES
Additions to vessels and equipment	(1,093	)	(13,259	)
Additions to newbuildings	—		(19,220	)
Additions to assets under development	(133,696	)	(74,282	)
Additions to investments	(57,147	)	—
Loans granted (including related parties)	—		(1,000	)
Proceeds from disposal of business to Golar Partners, net of cash disposed	—		107,247
Restricted cash and short-term deposits	(6,544	)	(5,430	)
Net cash used in investing activities	(198,480	)	(5,944	)

FINANCING ACTIVITIES
Proceeds from short-term and long-term debt (including related parties)	778,432		305,817
Repayments of short-term and long-term debt (including related parties)	(371,268	)	(164,357	)
Payment for capped call in connection with bond issuance	(31,194	)	—
Financing costs paid	(1,564	)	(4,429	)
Cash dividends paid	(10,334	)	(45,061	)
Purchase of treasury shares	—		(8,214	)
Restricted cash and short-term deposits	(15,393	)	(59,123	)
Net cash provided by financing activities	348,679		24,633
Net increase (decrease) in cash and cash equivalents	119,036		(40,515	)
Cash and cash equivalents at beginning of period	224,190		105,235
Cash and cash equivalents at end of period	343,226		64,720

⁽¹⁾ This includes the amortization in relation to the Golar Grand charter-back guarantee obligation.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GOLAR LNG LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



(in thousands of $)	Share Capital	Treasury Shares		Additional Paid-in Capital	Contributed Surplus ⁽¹⁾	Accumulated Other Comprehensive (Loss) Income		Accumulated Retained Earnings		Total before Non- controlling Interest		Non-controlling Interest	Total Equity
Balance at December 31, 2015	93,547	(12,269	)	1,317,806	200,000	(12,592	)	308,874		1,895,366		20,813	1,916,179

Net loss	—	—		—	—	—		(171,212	)	(171,212	)	12,229	(158,983	)
Dividends	—	—		—	—	—		(9,237	)	(9,237	)	—	(9,237	)
Grant of share options	—	—		3,095	—	—		—		3,095		—	3,095
Other comprehensive income (see note 12)	—	—		—	—	1,092		—		1,092		—	1,092
Treasury shares	—	(8,214	)	—	—	—		—		(8,214	)	—	(8,214	)

Balance at June 30, 2016	93,547	(20,483	)	1,320,901	200,000	(11,500	)	128,425		1,710,890		33,042	1,743,932



(in thousands of $)	Share Capital	Treasury Shares		Additional Paid-in Capital	Contributed Surplus ⁽¹⁾	Accumulated Other Comprehensive (Loss) Income		Accumulated Retained Earnings		Total before Non- controlling Interest		Non-Controlling Interest	Total Equity
Balance at December 31, 2016	101,081	(20,483	)	1,488,556	200,000	(9,542	)	103,650		1,863,262		46,564	1,909,826

Net loss	—	—		—	—	—		(139,651	)	(139,651	)	15,931	(123,720	)
Dividends	—	—		—	—	—		(9,868	)	(9,868	)	—	(9,868	)
Grant of share options	—	—		4,915	—	—		—		4,915		—	4,915
Other comprehensive income (see note 12)	—	—		—	—	1,632		—		1,632		—	1,632
Issuance of convertible bonds ⁽²⁾	—	—		39,861	—	—		—		39,861		—	39,861

Balance at June 30, 2017	101,081	(20,483	)	1,533,332	200,000	(7,910	)	(45,869	)	1,760,151		62,495	1,822,646

⁽¹⁾ Contributed Surplus is 'capital' that can be returned to shareholders without the need to reduce share capital, thereby giving Golar greater flexibility when it comes to declaring dividends.

⁽²⁾ Issuance of convertible bonds relates to the equity component of the $402.5 million convertible bond, net of the capped call payment and convertible bond issuance costs. See note 11.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GOLAR LNG LIMITED

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL

Golar LNG Limited (the "Company" or "Golar") was incorporated in Hamilton, Bermuda on May 10, 2001 for the purpose of acquiring the liquefied natural gas ("LNG") shipping interests of Osprey Maritime Limited ("Osprey"), which was owned by World Shipholding Limited ("World Shipholding").

As of June 30, 2017 , our fleet comprises of 14 LNG carriers (including the Golar Grand , which we have chartered back from Golar Partners until October 2017) and one Floating Storage Regasification Unit (''FSRU'') (the Golar Tundra ). We also operate, under management agreements, Golar LNG Partners LP's ("Golar Partners" or the "Partnership") fleet of three LNG carriers (excluding the Golar Grand ) and six FSRU s, and Golar Power Limited's ("Golar Power") fleet of two LNG carriers and one newbuilding commitment. Collectively with Golar Partners and Golar Power, our combined fleet is comprised of 19 LNG carriers and seven FSRUs.

In July 2014, we ordered our first Floating Liquefaction Natural Gas Vessel ("FLNG") based on the conversion of our existing LNG carrier, the Hilli Episeyo (the " Hilli "). The Hilli FLNG conversion is nearing completion and no major issues have been identified. All equipment has been installed and pre-commissioning work is well underway with an expected redelivery date in the fourth quarter of 2017. We also signed agreements for the conversion of the LNG carriers the Gimi and the Gandria to FLNGs in December 2014 and July 2015, respectively. Subsequently, the Gimi conversion agreement was extended and, whilst the Gandria agreement has expired, we expect to agree terms for the conversion of the Gandria shortly as part of the Final Investment Decision ("FID") on the Fortuna project carried out by OneLNG. We are yet to lodge our final notices to proceed on either of these vessels.

As used herein and unless otherwise required by the context, the terms "Golar", the "Company", "we", "our" and words of similar import refer to Golar or anyone or more of its consolidated subsidiaries, or to all such entities.

Going concern

The condensed consolidated financial statements have been prepared on a going concern basis.

A pre-condition of the Golar Tundra lease financing with CMBL (refer to note 7 - Variable Interest Entities, to our consolidated financial statements) is for the FSRU to be employed under an effective charter. The recent delays with the WAGL charter and the recent termination of that charter by us, means that we now have to find a replacement charter by June 30, 2018 or we could be required to refinance the FSRU. Accordingly, to address our anticipated working capital requirements over the next 12 months, in the event we are unable to secure a replacement charter for the Golar Tundra, we are currently exploring our refinancing options. We may also look to refinance our other newbuildings. While we believe we will be able to obtain the necessary funds from these refinancings, we cannot be certain that the proposed new credit facilities will be executed in time or at all. However, we have a track record of successfully financing and refinancing our vessels, even in the absence of term charter coverage. Recent successes include the refinancing of the Golar Crystal in March 2017. In addition to vessel refinancings, if market and economic conditions are favorable, we may also consider further issuances of corporate debt or equity to increase liquidity, as demonstrated by our convertible bond offering in February 2017, which raised net proceeds of $360.2 million . We also entered into a Margin Loan Facility in March 2017, which raised proceeds of $150 million .

Furthermore, with respect to our Golar Power joint venture with Stonepeak, under the shareholders' agreement, we and Stonepeak have agreed to contribute additional funding to Golar Power, on a pro rata basis, including (i) an aggregate of approximately $150 million in the period through to the third quarter of 2018; and (ii) additional amounts as may be required by Golar Power, subject to the approval of its board of directors. In connection with Golar Power’s election in October 2016 to increase its ownership interest in the Sergipe project from 25% to 50% by buying out the project developer GenPower, this is expected to result in an additional funding requirement of between $20 million to $50 million to be shared with Stonepeak, with the initial $20 million being required on financial close of the project financing for the power plant, which is expected to occur by December 31, 2017.

final investment decisions by OneLNG and Ophir, securing of financing and governmental approval which may occur in the second half of 2017. Accordingly, we anticipate, in the event of a final investment decision, to fund the estimated $2 billion project cost, assuming debt financing of $1.2 billion and Ophir’s investment of $150 million , OneLNG will be expected to invest approximately $650 million (this is inclusive of the aggregate of $500 million new equity required under the OneLNG shareholders' agreement). The cash contribution from the Company to the project remains uncertain as the timing of capital expenditure for the project is not yet finalized due to the payment profile of certain contracts continuing to be negotiated. Furthermore, the amount of our contribution to the project within the next twelve months will be determined by the timing of the final investment decision, which is yet to be taken. Our recent financings will contribute towards our 51% share of the equity contribution into OneLNG in the 2017 to 2020 period. Credit can be expected for both the intellectual property and the LNG carrier Gandria contributed by Golar into the Equatorial Guinea project.

2. ACCOUNTING POLICIES

Basis of accounting

The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The condensed consolidated financial statements do not include all of the disclosures required in the annual consolidated financial statements, and should be read in conjunction with our annual financial statements for the year ended December 31, 2016 .

The six months ended June 30, 2017 includes a depreciation catch-up charge of $9.7 million in respect of the Golar Tundra , which was previously not depreciated whilst accounted for as an asset held-for-sale. Previously, the assets and liabilities associated with the agreement to sell our interests in the companies that own and operate the FSRU the Golar Tundra to Golar Partners were classified as held-for-sale. As of March 31, 2017, these assets and liabilities no longer qualified for classification as held-for-sale. Furthermore, on May 30, 2017, Golar Partners exercised its Put Right in respect of the Golar Tundra . Accordingly, as of March 31, 2017 (and for all retrospective periods), these assets and liabilities are presented as held and used in the consolidated balance sheets. For additional details on the assets and liabilities previously classified as held-for-sale, refer to note 19 in the 20-F for the year ended December 31, 2016.

Significant accounting policies

The accounting policies adopted in the preparation of the condensed consolidated financial statements for the six months ended June 30, 2017 are consistent with those followed in the preparation of our audited consolidated financial statements for the year ended December 31, 2016 .

Use of estimates

The preparation of financial statements in accordance with the United States Generally Accepted Accounting Principles ("US GAAP") requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

As further described in note 14 (c), in February 2015, Golar Partners exercised its option to require us to charter back the Golar Grand for the period until October 2017. In May 2017, the Partnership sub-chartered the vessel back from us in order to commence a new charter with a third party. Accordingly, we revised our assessment of the existing provision for the Golar Grand guarantee obligation and recognized an incremental remeasurement loss of $9.0 million for the six months ended June 30, 2017 .

As of June 30, 2017 , we leased seven vessels under finance leases from wholly-owned special purpose vehicles (“lessor SPVs”) of financial institutions in connection with our sale and leaseback transactions. While we do not hold any equity investments in these lessor SPVs, we have determined that we are the primary beneficiary of these entities and accordingly, we are required to consolidate these VIEs into our financial results. The key line items impacted by our consolidation of these VIEs are short-term and long-term debt, restricted cash and short-term deposits, and interest expense. In consolidating these lessor VIEs, on a quarterly basis, we must make assumptions regarding (i) the debt amortization profile; (ii) the interest rate to be applied against the VIEs’ debt principal; and (iii) the VIE's application of cash receipts. Our estimates are therefore dependent upon the timeliness of receipt and accuracy of financial information provided by these lessor VIE entities. Upon receipt of the audited annual financial statements of the lessor VIEs, we will make a true-up adjustment for any material differences.

3. RECENTLY ISSUED ACCOUNTING STANDARDS

Adoption of new accounting standards

In July 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2015-11 “ Inventory (Topic 330): Simplifying the Measurement of Inventory ”. The standard requires inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The amendment is effective for the fiscal years beginning after December 15, 2016 and interim periods within fiscal years beginning after December 15, 2017, early adoption is permitted. The adoption of this update did not have an impact on our Consolidated Financial Statements or related disclosures.

In March 2016, the FASB issued ASU 2016-09 “ Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ”. This standard primarily requires the recognition of excess tax benefits for share-based awards in the statement of operations and the classification of excess tax benefits as an operating activity within the statement of Cash Flows. The guidance allows an entity to elect to account for forfeitures when they occur. The new standard is effective for annual reporting periods beginning after December 15, 2016. The adoption of this update did not have an impact on our Consolidated Financial Statements or related disclosures.

Accounting pronouncements to be adopted

In May 2014, the FASB issued ASU 2014-09 " Revenue from Contracts with Customers (Topic 606) " and subsequent amendments. The standard provides a single, comprehensive revenue recognition model and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduces a new concept of “series provision” which provides accounting guidance for entities that engage in repetitive service contracts. There are also new requirements which impact the timing of costs that are reimbursed at the start or near the inception of a contract. The guidance is effective from January 1, 2018 and requires enhanced disclosures. It may be applied retrospectively to each prior period presented subject to practical expedients (“full retrospective”) or a cumulative-effect adjustment as of the date of adoption (“modified retrospective approach”).

We are currently in the process of evaluating the impact that the standard could have on our revenue. Specifically we are assessing if the revised agent-principal guidance will have an Income Statement classification impact for revenue earned under ASC 808 “Collaborative Arrangements”. In addition we are assessing whether the timing of our management services income and time charter revenues will be impacted under the new standard. Depending on the conclusion, the timing of our revenue could differ, however, the total amount earned from contracts over all periods will remain the same. We expect to finalize our assessment in the second half of the year.

In March 2016, the FASB issued guidance to ASU 2016-02 " Leases (Topic 842) ". This update requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements regarding timing and uncertainty of cash flows arising from leases. It also offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. The standard will be effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years, and early adoption is permitted. The Company is in the process of evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04 “ Intangibles - Goodwill and other ” which simplifies the test for goodwill impairment. The simplification eliminated “Step 2” from the goodwill impairment test which required companies to compute the implied fair value of goodwill by performing procedures that would be required in business combination for determining the fair value of the assets acquired and liabilities assumed (including unrecognized assets and liabilities). The amendments are effective for the fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, early adoption is permitted. We believe the adoption of this guidance will not have a material impact on our Consolidated Financial Statements or related disclosures.

Any other accounting pronouncements yet to be adopted by us are consistent with those disclosed in our audited consolidated financial statements for the year ended December 31, 2016.

4. SEGMENT INFORMATION

We own and operate LNG carriers and FSRUs and provide these services under time charters under varying periods, trade in physical and future LNG contracts, are in the process of developing our first FLNG and have entered the power market in an effort to become a midstream LNG solution provider. Our reportable segments consist of the primary services each provides. Although our segments are generally influenced by the same economic factors, each represents a distinct product in the LNG industry. Segment results are evaluated based on net income. The accounting principles for the segments are the same as for our consolidated financial statements. Indirect general and administrative expenses are allocated to each segment based on estimated use.

The split of the organization of the business into four reportable segments is based on differences in management structure and reporting, economic characteristics, customer base, asset class and contract structure. As of June 30, 2017 , we operate in the following four reportable segments:


•	Vessel operations – We operate and subsequently charter out LNG carriers and FSRUs on fixed terms to customers.


•	LNG trading – We provide physical and financial risk management in LNG and gas markets for customers around the world. Activities include structured services to outside customers, arbitrage service as well as proprietary trading.

The LNG trading operations meets the definition of an operating segment as the business is a financial trading business and its financial results are reported directly to the chief operating decision maker. The LNG trading segment is a distinguishable component of the business from which we earn revenues and incur expenses and whose operating results are regularly reviewed by the chief operating decision maker, and which is subject to risks and rewards different from the vessel operations segment.


•	FLNG – In 2014, we ordered our first FLNG based on the conversion of our existing LNG carrier, the Hilli. The Hilli FLNG conversion is expected to be completed and delivered in the second half of 2017.

FLNG meets the definition of an operating segment as the business is a distinguishable component of the business from which, once the first FLNG is delivered to us, we will earn revenues and incur expenses and whose operating results will be regularly reviewed by the chief operating decision maker, and due to its nature is subject to risks and rewards different from the vessel operations segment or the LNG trading segment.


•	Power – In July 2016, we entered into certain agreements forming a 50/50 joint venture, Golar Power, with private equity firm Stonepeak. Golar Power offers integrated LNG based downstream solutions, through the ownership and operation of FSRUs and associated terminal and power generation infrastructure.

In October 2016, the Sergipe project obtained FID thus differentiating Golar Power’s risks and long term business prospects from the other reporting segments. Golar Power meets the definition of an operating segment as the business is a distinguishable component of the business from which we earn revenues and incur expenses and whose operating results will be regularly reviewed by the chief operating decision maker.



	Six months ended									Six months ended
(in thousands of $)	June 30, 2017									June 30, 2016
	Vessel operations		LNG trading	FLNG		Power		Total		Vessel operations		LNG trading	FLNG		Total
Time and voyage charter revenues	32,284		—	—		—		32,284		24,222		—	—		24,222
Time charter revenues - collaborative arrangement	11,739		—	—		—		11,739		5,936		—	—		5,936
Vessel and other management fees	9,495		—	—		—		9,495		4,769		—	—		4,769
Vessel and voyage operating expenses	(41,008	)	—	—		—		(41,008	)	(50,111	)	—	—		(50,111	)
Vessel and voyage operating expenses - collaborative arrangement	(12,772	)	—	—		—		(12,772	)	(2,804	)	—	—		(2,804	)
Administrative expenses	(22,320	)	—	(226	)	—		(22,546	)	(19,141	)	—	(2,124	)	(21,265	)
Depreciation and amortization	(42,552	)	—	—		—		(42,552	)	(39,149	)	—	—		(39,149	)
Other operating gains and losses (LNG Trade)	—		—	—		—		—		—		16	—		16
Other non operating income	206		—	—		—		206		—		—	—		—
Impairment of long-term assets	—		—	—		—		—		(1,706	)	—	—		(1,706	)
Net financial expenses	(44,726	)	—	—		—		(44,726	)	(74,613	)	—	—		(74,613	)
Income taxes	(647	)	—	—		—		(647	)	1,285		—	—		1,285
Equity in net losses of affiliates	(2,606	)	—	(3,126	)	(7,461	)	(13,193	)	(5,563	)	—	—		(5,563	)
Net (loss) income	(112,907	)	—	(3,352	)	(7,461	)	(123,720	)	(156,875	)	16	(2,124	)	(158,983	)
Non-controlling interests	(15,931	)	—	—		—		(15,931	)	(12,229	)	—	—		(12,229	)
Net (loss) income attributable to Golar LNG Ltd	(128,838	)	—	(3,352	)	(7,461	)	(139,651	)	(169,104	)	16	(2,124	)	(171,212	)
Total assets	3,149,673		—	1,174,512		174,073		4,498,258		3,442,102		—	913,899		4,356,001

Revenues from external customers

During the six months ended June 30, 2017 , our vessels operated predominately under charters with the Cool Pool and NFE Transport Partners LLC. During the six months ended June 30, 2016 , our vessels operated under time charters with three main charterers: the Cool Pool, Nigeria LNG Limited and NFE Transport Partners LLC.

In time and voyage charters, the charterer, not us, controls the routes of our vessels. These routes can be worldwide as determined by the charterers, except for the FSRUs, which operate at specific locations where the charterers are based. Accordingly, our management, including the chief operating decision maker, do not evaluate our performance either according to customer or geographical region.

For the six months ended June 30, 2017 and 2016 , revenues from the following counterparties accounted for over 10% of our time charter revenues:



	Six months ended June 30,			Six months ended June 30,
(in thousands of $)	2017			2016
The Cool Pool (note 14)	39,444	90	%	20,820	69	%
NFE Transport Partners LLC	4,579	10	%	3,487	12	%
Nigeria LNG Ltd	—	—	%	5,849	19	%

The above revenues exclude vessel and other management fees from our related parties (see note 14).

5. (LOSSES) EARNINGS PER SHARE

Basic earnings per share (“EPS”) are calculated with reference to the weighted average number of common shares outstanding during the period. Treasury shares are not included in the calculation. The computation of diluted EPS for the six month periods ended June 30, 2017 and 2016 , assumes the conversion of potentially dilutive instruments.

The components of the numerator for the calculation of basic and diluted EPS are as follows:



(in thousands of $)	Six months ended June 30,
	2017		2016
Net loss attributable to Golar LNG Ltd stockholders - basic and diluted	(139,651	)	(171,212	)

The components of the denominator for the calculation of basic and diluted EPS are as follows:



(in thousands)	Six months ended June 30,
	2017	2016
Weighted average number of common shares outstanding	100,581	93,052

Losses per share are as follows:



	Six months ended June 30,
	2017			2016
Basic and diluted	$	(1.39	)	$	(1.84	)

For the six months ended June 30, 2017 and 2016, stock options and convertible bonds have been excluded from the calculation of diluted loss per share because the effect was anti-dilutive.

6. OTHER FINANCIAL ITEMS

Other financial items comprise of the following:



(in thousands of $)	Six months ended June 30,
	2017		2016
Mark-to-market adjustment for interest rate swap derivatives	(603	)	(29,390	)
Interest expense on undesignated interest rate swaps	(2,706	)	(5,741	)
Mark-to-market adjustment for equity derivatives	(4,323	)	3,362
Impairment of loan ^*	—		(7,627	)
Financing arrangement fees and other costs	(239	)	(75	)
Amortization of debt guarantee	846		—
Others	(903	)	(1,410	)
	(7,928	)	(40,881	)

^* In the prior six months ended June 30, 2016, we recognized an impairment charge of $7.6 million against the loan receivable from Douglas Channel LNG Assets Partnership, pursuant the announcement of a negative FID on the related project.

7. VARIABLE INTEREST ENTITIES

As of June 30, 2017 , we leased seven vessels from VIEs under finance leases, of which four were with ICBCL entities, one with a CMBL entity, one with CCBFL and one with a COSCO Shipping entity. Each of the ICBCL, CMBL, CCBFL and COSCO Shipping entities are wholly-owned, newly formed special purpose vehicles (“SPVs”). In each of these transactions we sold our vessel and then subsequently leased back the vessel on a bareboat charter for a term of ten years. We have options to repurchase each vessel at fixed predetermined amounts during their respective charter periods and an obligation to repurchase each vessel at the end of the ten year leas

e period. Refer to note 4 to our Consolidated Financial Statements filed with our Annual Report on Form 20-F for the year ended December 31, 2016 , for additional details.

While we do not hold any equity investments in the above Lessor SPVs, we have determined that we have a variable interest in these SPVs and that these lessor entities, that own the vessels, are VIEs. Based on our evaluation of the agreements we have concluded that we are the primary beneficiary of these VIEs and accordingly, these lessor VIEs are consolidated into our financial results. We did not record any gains or losses from the sale of these vessels, as they continued to be reported as vessels at their original costs in our consolidated financial statements at the time of each transaction, similarly, the effect of the bareboat charter arrangement is eliminated upon consolidation of the Lessor SPV. The equity attributable to the respective lessor VIEs are included in non-controlling interests in our consolidated results. As of June 30, 2017 and 2016 , the respective vessels are reported under “Vessels and equipment, net” in our consolidated balance sheet.

Since December 31, 2016 , we entered into the following sale and leaseback arrangement:

Crystal Lessor VIE

In March 2017, we sold the Golar Crystal to a COSCO Shipping entity ("Crystal Lessor VIE") and subsequently leased back the vessel on a bareboat charter for a term of ten years. We have options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the third year anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten year lease period. A summary of this sale and lease back arrangement, including repurchase options and obligations as of June 30, 2017 is provided below:



Vessel	Effective from	Sales value (in $ millions)	First repurchase option (in $ millions)	Date of first repurchase option	Repurchase obligation at end of lease term (in $ millions)	End of lease term
Golar Crystal	March 2017	187.0	97.3	March 2020	50.6	March 2027

A summary of our payment obligations (excluding repurchase options and obligations) under the bareboat charters with the lessor VIEs as of June 30, 2017 , are shown below:



(in thousands of $)	2017 ⁽¹⁾	2018	2019	2020	2021	2022+
Golar Glacier	8,620	17,100	17,100	17,147	17,100	47,084
Golar Kelvin	8,620	17,100	17,100	17,147	17,100	49,895
Golar Snow	8,620	17,100	17,100	17,147	17,100	49,895
Golar Ice	8,620	17,100	17,100	17,147	17,100	52,800
Golar Tundra ⁽²⁾⁽³⁾	10,432	20,446	19,934	19,466	18,953	68,097
Golar Seal	7,513	15,151	15,193	15,151	15,151	60,646
Golar Crystal ⁽³⁾	5,236	10,433	10,420	10,419	10,381	53,659

⁽¹⁾ For the six months ended December 31, 2017.

⁽²⁾ As a result of the sale of the Golar Tundra to Golar Partners in May 2016 (see "Tundra Lessor VIE" below), the payment obligations under the bareboat charter with the Golar Tundra lessor VIE are borne by Golar Partners until the Put Sale Closing Date. See note 14.

⁽³⁾ The payment obligation relating to the Golar Tundra and Golar Crystal above includes variable rental payments due under the lease based on an assumed LIBOR range of 0.38% to 0.42% plus margin.

The assets and liabilities of these lessor VIEs that most significantly impact our consolidated balance sheet as of June 30, 2017 and December 31, 2016 , are as follows:



(in thousands of $)	Golar Glacier	Golar Kelvin	Golar Snow	Golar Ice	Golar Tundra (note 2)	Golar Seal	Golar Crystal	June 30, 2017	December 31, 2016
Assets								Total	Total
Restricted cash and short-term deposits	13,362	44,090	13,969	10	1,953	18,970	4,872	97,226	70,021
	13,362	44,090	13,969	10	1,953	18,970	4,872	97,226	70,021

Liabilities
Debt:
Short-term interest bearing debt	31,648	182,540	22,384	143,576	—	—	112,000	492,148	388,628
Long-term interest bearing debt - current portion	7,650	—	8,000	—	—	6,062	—	21,712	21,532
Long-term interest bearing debt - non-current portion	125,333	—	135,025	—	198,613	151,059	—	610,030	624,384
	164,631	182,540	165,409	143,576	198,613	157,121	112,000	1,123,890	1,034,544

The most significant impact of consolidated SPV’s operations on our unaudited consolidated statements of income is interest expense of $19.1 million and $22.4 million for the six months ended June 30, 2017 and 2016, respectively. The most significant impact of consolidated SPV’s cash flows on our unaudited consolidated statements of cash flows is net cash received in financing activities of $89.2 million and $179.8 million for the six months ended June 30, 2017 and 2016, respectively.

8. ASSET UNDER DEVELOPMENT



(in thousands of $)	June 30, 2017	December 31, 2016
Purchase price installments	733,109	653,378
Interest costs capitalized	75,680	53,985
Other costs capitalized	47,160	24,630
	855,949	731,993

In May 2014, we entered into agreements for the conversion of the Hilli to a FLNG vessel. The primary contract was entered into with Keppel. Following the payment of the initial milestone installment, these agreements became fully effective on July 2, 2014. The Hilli was delivered to Keppel in Singapore in September 2014 for the commencement of her conversion. The Hilli FLNG conversion is nearing completion and no major issues have been identified.

The total estimated conversion, vessel and site commissioning cost for the Hilli is approximately $1.3 billion . As at June 30, 2017 , the estimated timing of the outstanding payments in connection with the Hilli conversion are as follows:



(in thousands of $)	June 30, 2017
Payable within 6 months to December 31, 2017	289,374
Payable within 12 months to December 31, 2018	76,609
	365,983

9. EQUITY IN NET EARNINGS OF AFFILIATES



(in thousands of $)	Six Months Ended June 30, 2017		Six Months Ended June 30, 2016
Share of net loss in Golar Partners	(2,906	)	(5,525	)
Share of net loss in Golar Power	(7,461	)	—
Share of net loss in OneLNG	(3,126	)	—
Share of net earnings (loss) in Egyptian Company for Gas Services ("ECGS")	300		(38	)
	(13,193	)	(5,563	)

Our share of net loss in Golar Partners includes a non-cash loss on deemed disposal of $17.0 million for the six months ended June 30, 2017, being the dilutive impact on our ownership interest due to further issuances of common units by Golar Partners in February 2017. In addition, our share of net loss in Golar Partners includes a charge of $10.7 million for the six months ended June 30, 2017 (June 30, 2016: $17.1 million ) in relation to the amortization of the basis difference primarily in relation to the $854.0 million gain on loss of control recognized upon deconsolidation in 2012.

The carrying amounts of our investments in our equity method investments as at June 30, 2017 and December 31, 2016 are as follows:



(in thousands of $)	June 30, 2017	December 31, 2016
Golar Partners	482,397	507,182
Golar Power	174,073	126,534
OneLNG	7,074	10,200
ECGS	5,163	4,864
Equity in net assets of affiliates	668,707	648,780

10. OTHER NON-CURRENT ASSETS

Other non-current assets comprise of the following:



(in thousands of $)	June 30, 2017	December 31, 2016
Mark-to-market interest rate swaps valuation	4,503	5,022
Derivatives - Earn-Out Units ⁽¹⁾	14,500	15,000
Other non-current assets ⁽²⁾	35,337	36,386
	54,340	56,408

⁽¹⁾ The Earn-Out Units were issued to us in connection with the IDR Reset transaction with Golar Partners in October 2016.

⁽²⁾ "Other non-current assets" is mainly comprised of:

(i) Payments made relating to long lead items ordered in preparation for the conversion of the Gimi to a FLNG following agreements to convert her. As of June 30, 2017 and December 31, 2016 , the carrying value was $31.0 million . The Gimi conversion contract provides flexibility wherein certain beneficial cancellation provisions exist which, if exercised prior to contract expiry, will allow termination of contracts and recovery of previous milestone payments, less cancellation fees. The Gimi contract has been extended to expire on December 30, 2017; and

(ii) $1.9 million (December 31, 2016: $2.8 million ), representing the non-current portion of the counter guarantee recognized at fair value on deconsolidation of Golar Power in July 2016.

11. DEBT

As of June 30, 2017 and December 31, 2016 , our debt was as follows:



(in thousands of $)	June 30, 2017		December 31, 2016
Golar Arctic facility	69,250		72,900
Golar Viking facility	54,688		57,292
Convertible bonds - 2012	—		218,851
Convertible bonds - 2017	333,682		—
FLNG Hilli facility	375,000		250,000
Hilli shareholder loans	49,066		49,066
$1.125 billion facility	206,306		318,444
ICBC VIE loans	658,384		674,688
Seal SPV loan	157,120		157,120
Tundra VIE loan (note 2)	198,613		205,145
Crystal VIE loan	112,000		—
Margin Loan Facility	139,660		—
Total debt	2,353,769		2,003,506
Less: Deferred financing costs, net	(30,739	)	(26,308	)
Total debt, net of deferred financing costs	2,323,030		1,977,198

During the six months ended June 30, 2017 , we entered into the following new loan facilities:

Convertible bonds - 2017

On February 17, 2017, we closed a new $402.5 million senior unsecured five years 2.75% convertible bond. The conversion rate for the bonds will initially equal 26.5308 common shares per $1,000 principal amount of the bonds. This is equivalent to an initial conversion price of $37.69 per common share, or a 35% premium on the February 13, 2017 closing share price of $27.92 . The conversion price is subject to adjustment for dividends paid. To mitigate the dilution risk of conversion to common equity, we also entered into capped call transactions costing approximately $31.2 million . The capped call transactions cover approximately 10,678,647 common shares, have an initial strike price of $37.69 , and an initial cap price of $48.86 . The cap price of $48.86 , which is a proxy for the revised conversion price, represents a 75% premium on the February 13, 2017 closing share price of $27.92 . Including the $31.2 million cost of the capped call, the all-in cost of the bond is approximately 4.3% . Bond proceeds, net of fees and the cost of the capped call, amounted to $360.2 million .

Crystal VIE loan

Margin Loan Facility

value requirements), mandatory prepayment events, facility adjustment events, events of default and other provisions customary for a facility of this nature. The loan was primarily used to pay a portion of the amounts due under our 3.75% convertible senior secured bonds due March 2017, or the Prior Convertible Bonds. Concurrently with the repayment of the Prior Convertible Bonds, the trustee for these bonds released our Golar Partners common units that had been pledged to secure them. In connection with the entry into the Margin Loan Facility, we pledged 20,852,291 Golar Partners common units as security for the obligations under the facility.

12. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The components of accumulated other comprehensive (loss) income consisted of the following:



(in thousands of $)	Pension and post-retirement benefit plan adjustments		Loss on cash flow hedges		Share of affiliates' comprehensive income		Total accumulated comprehensive (loss) income
Balance at December 31, 2015	(12,400	)	—		(192	)	(12,592	)
Other comprehensive (loss) income before reclassification	—		(44	)	1,136		1,092
Net current-period other comprehensive (loss) income	—		(44	)	1,136		1,092
Balance at June 30, 2016	(12,400	)	(44	)	944		(11,500	)

Balance at December 31, 2016	(12,956	)	—		3,414		(9,542	)
Other comprehensive income before reclassification	—		—		1,632		1,632
Net current-period other comprehensive income	—		—		1,632		1,632
Balance at June 30, 2017	(12,956	)	—		5,046		(7,910	)

13. FINANCIAL INSTRUMENTS

Fair values

We recognize our fair value estimates using a fair value hierarchy based on the inputs used to measure fair value. The fair value of hierarchy has three levels based on reliability of inputs used to determine fair value as follows:

Level 1: Quoted market prices in active markets for identical assets and liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The carrying values and estimated fair values of our financial instruments at June 30, 2017 and December 31, 2016 are as follows:



		June 30, 2017		December 31, 2016
(in thousands of $)	Fair value hierarchy	Carrying value	Fair value	Carrying value	Fair value
Non-Derivatives:

Cash and cash equivalents	Level 1	343,226	343,226	224,190	224,190
Restricted cash and short-term deposits	Level 1	438,371	438,371	416,028	416,028
Cost method investments ⁽¹⁾	Level 3	7,347	7,347	7,347	7,347
Current portion of long-term debt and short-term debt ⁽²⁾⁽³⁾	Level 2	923,445	923,445	455,405	455,405
Long-term debt - convertible bonds ⁽³⁾	Level 2	333,682	374,571	218,851	219,428
Long-term debt ⁽³⁾	Level 2	1,096,641	1,096,641	1,329,250	1,329,250

Derivatives:
Interest rate swaps asset ⁽⁴⁾⁽⁵⁾	Level 2	4,503	4,503	5,022	5,022
Interest rate swaps liability ⁽⁴⁾⁽⁵⁾	Level 2	1,555	1,555	1,470	1,470
Foreign exchange swaps liability ⁽⁴⁾	Level 2	199	199	993	993
Total return equity swap liability ^(4)(5)(6)	Level 2	61,086	61,086	56,763	56,763
Earn-Out Units asset ⁽⁴⁾	Level 2	14,500	14,500	15,000	15,000

⁽¹⁾ The carrying value of our cost method investments includes our holdings in OLT Offshore LNG Toscana S.p.A (or OLT-O). As we have no established method of determining the fair value of this investment, we have not estimated its fair value as of June 30, 2017, but have not identified any changes in circumstances which would alter our view of fair value as disclosed.

⁽²⁾ The carrying amounts of our short-term debts and loans receivable approximate their fair values because of the near term maturity of these instruments.

⁽³⁾ Our debt obligations are recorded at amortized cost in the consolidated balance sheets. The amounts presented in the table above, are gross of the deferred charges amounting to $ 30.7 million and $ 26.3 million at June 30, 2017 and December 31, 2016 , respectively.

⁽⁴⁾ Derivative liabilities are captured within other current liabilities and derivative assets are captured within other non-current assets on the balance sheet.

⁽⁵⁾ The fair value of our derivative instruments is the estimated amount that we would receive or pay to terminate the agreements at the reporting date, taking into account current interest rates, foreign exchange rates, closing quoted market prices and our creditworthiness and that of our counterparties.

⁽⁶⁾ The fair value of total return equity swaps is calculated using the closing prices of the underlying listed shares, dividends paid since inception and the interest rate charged by the counterparty.

The carrying values of accounts receivable, accounts payable and accrued liabilities, excluded from the table above, approximate fair values because of the near term maturity of these instruments.

As of June 30, 2017 , we had entered into the following interest rate swap transactions involving the payment of fixed rates in exchange for LIBOR as summarized below:



Instrument (in thousands of $)	Notional value	Maturity dates	Fixed interest rates
Interest rate swaps:
Receiving floating, pay fixed	1,250,000	2018 to 2021	1.13% to 1.94%

The credit exposure of our interest rate and equity swap agreements are represented by the fair value of contracts with a positive fair value at the end of each period, reduced by the effects of master netting agreements. It is our policy to enter into master netting agreements with the counterparties to derivative financial instrument contracts, which give us the legal right to discharge all or a portion of amounts owed to the counterparty by offsetting them against amounts that the counterparty owes to us. We have elected not to offset the fair values of derivative assets and liabilities executed with the same counterparty that are generally subject to enforceable master netting arrangements. However, if we were to offset and record the asset and liability balances of derivatives on a net basis, the amounts presented in our consolidated balance sheets as of June 30, 2017 and December 31, 2016 would be adjusted as detailed in the following table:



	June 30, 2017				December 31, 2016
(in thousands of $)	Gross amounts presented in the consolidated balance sheet	Gross amounts not offset in the consolidated balance sheet subject to netting agreements		Net amount	Gross amounts presented in the consolidated balance sheet	Gross amounts not offset in the consolidated balance sheet subject to netting agreements		Net amount
Total asset derivatives	4,503	(194	)	4,309	5,022	(1,351	)	3,671
Total liability derivatives	1,555	(194	)	1,361	1,470	(1,351	)	119

14. RELATED PARTY TRANSACTIONS

a) Transactions with Golar Partners and subsidiaries:

Net revenues (expenses): The transactions with Golar Partners and its subsidiaries for the six months ended June 30, 2017 and 2016 consisted of the following:



	Six months ended June 30,
(in thousands of $)	2017		2016
Management and administrative services revenue (a)	2,571		1,288
Ship management fees revenue (b)	2,138		3,481
Charterhire expense (c)	(9,089	)	(14,560	)
Interest expense on short-term credit arrangements (d)	—		(122	)
Interest expense on deposit payable (e)	(1,404	)	(309	)
Total	(5,784	)	(10,222	)

Receivables (payables): The balances with Golar Partners and its subsidiaries as of June 30, 2017 and December 31, 2016 consisted of the following:



(in thousands of $)	June 30, 2017		December 31, 2016
Trading balances due from (owing to) Golar Partners and affiliates (d)	1,117		(21,792	)
Deposit payable (e)	(107,247	)	(107,247	)
Methane Princess security lease deposit movement (f)	(3,783	)	(2,006	)
Total	(109,913	)	(131,045	)

Management and administrative services agreement - On March 30, 2011, Golar Partners entered into a management and administrative services agreement with Golar Management, a wholly-owned subsidiary of Golar, pursuant to which Golar Management will provide to Golar Partners certain management and administrative services. The services provided by Golar Management are charged at cost plus a management fee equal to 5% of Golar Management’s costs and expenses incurred in connection with providing these services. Golar Partners may terminate the agreement by providing 120 days written notice.

Ship management fees - Golar and certain of its affiliates charge ship management fees to Golar Partners for the provision of technical and commercial management of Golar Partners' vessels. Each of Golar Partners’ vessels is subject to management agreements pursuant to which certain commercial and technical management services are provided by Golar Management. Golar Partners may terminate these agreements by providing 30 days written notice.

Charterhire expenses - For the six months ended June 30, 2017, this consists of the charterhire expenses that we incurred for the charter back from Golar Partners of the Golar Grand, less any time charter revenues that Golar Partners may generate through subleasing the Golar Grand from Golar during the period . In connection with the sale of the Golar Grand to Golar Partners in November 2012, we issued an option where, in the event that the charterer did not renew or extend its charter for the Golar Grand beyond February 2015, the Partnership had the option to require us to charter the vessel through to October 2017. In February 2015, the option was exercised. Accordingly, we recognized charterhire costs of $ 9.1 million and $ 14.6 million for the six months ended June 30, 2017 and 2016, respectively . The decrease is mainly due to the Golar Grand’s drydocking from February to April 2017, as well as the Golar Grand commencing her charter with a third party in May 2017.

The above disclosure excludes the net effect of the non-cash charge of $1.3 million and $3.0 million income for the six months ended June 30, 2017 and 2016, respectively. This relates to the Golar Grand guarantee obligation, which includes recognition of a loss on remeasurement in 2017, less amortization.

Trading balances -Receivables and payables with Golar Partners and its subsidiaries are comprised primarily of unpaid management fees and expenses for management, advisory and administrative services and may include working capital adjustments in respect of disposals to the Partnership, as well as charterhire expenses. In addition, certain receivables and payables arise when we pay an invoice on behalf of a related party and vice versa. Receivables and payables are generally settled quarterly in arrears. Trading balances owing to or due from Golar Partners and its subsidiaries are unsecured, interest-free and intended to be settled in the ordinary course of business. They primarily relate to recharges for trading expenses paid on behalf of Golar Partners, including ship management and administrative service fees due to us. For the six months ending June 30, 2017, Golar settled amounts outstanding in relation to the charterhire expenses with the Golar Grand . In January 2016, we received funding from Golar Partners in the amount of $ 30 million for a fixed period of 60 days. Golar Partners charged interest on this balance at a rate of LIBOR plus 5.0 %.

Expense under Tundra Letter Agreement/Deposit received from Golar Partners - In May 2016, we completed the Golar Tundra Sale and received a total cash consideration of $107.2 million . Pursuant to the Tundra Letter Agreement, of the amount we are obliged to pay under the agreement, we have accounted for $1.4 million and $0.3 million as interest expense for the six months ended June 30, 2017 and 2016, respectively. In May 2017, Golar Partners elected to exercise the Tundra Put Right to require us to repurchase Tundra Corp at a price equal to the original purchase price. In connection with Golar Partners exercising the Tundra Put Right, we and Golar Partners entered into an agreement pursuant to which we agreed to purchase Tundra Corp from Golar Partners on the date of the closing of the Tundra Put Sale (the “Put Sale Closing Date”) in return we will be required to pay an amount equal to $107.2 million (the “Deferred Purchase Price”) plus an additional amount equal to 5% per annum of the Deferred Purchase Price (the “Additional Amount”). The Deferred Purchase Price and the Additional Amount shall be due and payable by us on the earlier of (a) the date of the closing of the Hilli Acquisition and (b) March 31, 2018. We agreed to accept the Deferred Purchase Price and the Additional Amount in lieu of a cash receipt on the Put Sale Closing Date in return we have provided Golar Partners with an option (which Golar Partners have exercised) to purchase an interest in Hilli Corp. See note 16.

Methane Princess Lease security deposit movements - This represents net advances from Golar Partners since its IPO, which correspond with the net release of funds from the security deposits held relating to the Methane Princess Lease. This is in connection with the Methane Princess tax lease indemnity provided to Golar Partners under the Omnibus Agreement. Accordingly, these amounts will be settled as part of the eventual termination of the Methane Princess Lease.

b) Transactions with Golar Power and affiliates:

In July 2016, Golar, through a newly formed subsidiary, LNG Power, and GenPower Particapações SA (“GenPower”) entered into a strategic investment agreement which provided the framework for co-operation between GenPower and Golar to develop LNG power projects in Brazil through the formation of a joint venture commencing with the TPP Porto de Sergipe I Project (“Sergipe I”).

Net revenues: The transactions with Golar Power and its affiliates for the six months ended June 30, 2017 consisted of the following:



	Six months ended June 30,
(in thousands of $)	2017
Management and administrative services revenue	1,819
Ship management fees income	278
Debt guarantee compensation (a)	402
Total ^*	2,499

^* There was no comparable amount for the six months ended June 30, 2016.

Payables: The balances with Golar Power and its affiliates as of June 30, 2017 and December 31, 2016 consisted of the following:



(in thousands of $)	June 30, 2017		December 31, 2016
Trading balances due to Golar Power and affiliates (b)	(4,950	)	(4,442	)
Total	(4,950	)	(4,442	)


a)	Debt guarantee compensation - In connection with the closing of the formation of the JV Golar Power with Stonepeak, Golar Power entered into agreements to compensate Golar in relation to certain debt guarantees relating to Golar Power and subsidiaries. This compensation amounted to an aggregate of $0.4 million and $0 income for the six months ended June 30, 2017 and 2016, respectively.

Trading balances - Receivables and payables with Golar Power and its subsidiaries are comprised primarily of unpaid management fees, charterhire expenses, advisory and administrative services and may include working capital adjustments in connection with the initial formation of the joint venture and transaction with Stonepeak. In addition, certain receivables and payables arise when we pay an invoice on behalf of a related party and vice versa. Receivables and payables are generally settled quarterly in arrears. Trading balances owing to or due from Golar Power and its subsidiaries are unsecured, interest-free and intended to be settled in the ordinary course of business. They primarily relate to recharges for trading expenses paid on behalf of Golar Power, including ship management and administrative service fees due to us.

c) Transactions with OneLNG and subsidiaries:

On July 25, 2016 Golar and Schlumberger B.V. ("Schlumberger") entered into a joint venture and shareholders' agreement to form OneLNG, a joint venture, with the intention to offer an integrated upstream and midstream solution for the development of low cost gas reserves to LNG. In accordance with the joint venture and shareholders' agreement, Golar holds 51% and Schlumberger the remaining 49% of OneLNG.

Net revenues: The transactions with OneLNG and its subsidiaries for the six months ended June 30, 2017 consisted of the following:



	Six months ended June 30,
(in thousands of $)	2017
Management and administrative services revenue	2,708
Total ^*	2,708

^* There was no comparable amount for the six months ended June 30, 2016.

Receivables: The balances with OneLNG and its subsidiaries as of June 30, 2017 and December 31, 2016 consisted of the following:



(in thousands of $)	June 30, 2017	December 31, 2016
Trading balances due from OneLNG (a)	4,047	719
Total	4,047	719


a)	Trading balances - Receivables and payables with One LNG and its subsidiaries are comprised primarily of unpaid management fees, charterhire expenses, advisory and administrative services. In addition, certain receivables and payables arise when we pay an invoice on behalf of a related party and vice versa. Receivables and payables are generally settled

quarterly in arrears. Trading balances owing to or due from OneLNG are unsecured, interest-free and intended to be settled in the ordinary course of business.

d) Transaction with other related parties:



	Six months ended June 30,
(in thousands of $)	2017	2016
Cool Pool (a)	26,590	11,203
Magni Partners (b)	20	(1,092	)
	26,610	10,111

Receivables from (payables to) other related parties:



(in thousands of $)	June 30, 2017		December 31, 2016
Cool Pool (a)	5,186		3,490
Magni Partners (b)	(14	)	(137	)
	5,172		3,353


a)	Trade accounts receivable includes amounts due from the Cool Pool arising from our collaborative arrangement, amounting to $5.2 million as of June 30, 2017 (December 31, 2016: $3.5 million ). From our participation in the Cool Pool we recognized net income of $26.6 million and $11.2 million for the six months ended June 30, 2017 and 2016 , respectively.

The table below summarizes our earnings generated from our participation in The Cool Pool:



	Six months ended June 30,
(in thousands of $)	2017		2016
Time and voyage charter revenues	27,705		14,884
Time charter revenues - collaborative arrangement	11,739		5,936
Voyage and charterhire expenses	(82	)	(6,813	)
Voyage and charterhire - collaborative arrangement	(12,772	)	(2,804	)
Net income from the Cool Pool	26,590		11,203


b)	Tor Olav Trøim is the founder of, and partner in, Magni Partners Limited ("Magni"), a privately held UK company, and is the ultimate beneficial owner of the company. Magni provides various management services, pursuant to a management agreement between Magni and a Golar subsidiary.

15. OTHER COMMITMENTS AND CONTINGENCIES

Assets pledged



(in thousands of $)	June 30, 2017	December 31, 2016
Book value of vessels secured against long-term loans ⁽¹⁾	2,064,899	2,106,062

⁽¹⁾ This excludes the Hilli which is classified as an "asset under development". The Hilli is secured against the FLNG Hilli facility. Refer to note 8.

As at June 30, 2017 , 20,852,291 Golar Partners common units were pledged as security for the obligations under the Margin Loan Facility. See note 11.

UK tax lease benefits

As described under note 33 in our audited consolidated financial statements filed with our Annual Report on form 20-F for the year ended December 31, 2016 , during 2003 we entered into six UK tax leases. Under the terms of the leasing arrangements, the benefits are derived primarily from the tax depreciation assumed to be available to the lessors as a result of their investment in the vessels. As is typical in these leasing arrangements, as the lessee we are obligated to maintain the lessor’s after-tax margin. Accordingly, in the event of any adverse tax changes or a successful challenge by the UK Tax Authorities (''HMRC'') with regard to the initial tax basis of the transactions, or in relation to the 2010 lease restructurings, or in the event of an early termination of the Methane Princess lease, we may be required to make additional payments principally to the UK vessel lessor, which could adversely affect our earnings or financial position. We would be required to return all, or a portion of, or in certain circumstances significantly more than, the upfront cash benefits that we received in respect of our lease financing transactions, including the 2010 restructurings and subsequent termination transactions. The gross cash benefit we received upfront on these leases amounted to approximately £41 million British Pounds (before deduction of fees).

Of these six leases we have since terminated five , with one lease remaining, being that of the Methane Princess lease. Pursuant to the deconsolidation of Golar Partners in 2012, Golar Partners is no longer considered a controlled entity but an affiliate and therefore as at June 30, 2017 , the capital lease obligation relating to this remaining UK tax lease is not included on our consolidated balance sheet. However, under the indemnity provisions of the Omnibus Agreement or the respective share purchase agreements, we have agreed to indemnify Golar Partners in the event of any tax liabilities in excess of scheduled or final scheduled amounts arising from the Methane Princess leasing arrangements and termination thereof.

HMRC has been challenging the use of similar lease structures and has been engaged in litigation of a test case for some years. In August 2015, following an appeal to the Court of Appeal by the HMRC which set aside previous judgments in favor of the tax payer, the First Tier Tribunal (UK court) ruled in favor of HMRC. The tax payer in this particular ruling has the election to appeal the courts’ decision, but no appeal has been filed. The judgments of the First Tier Tribunal do not create binding precedent for other UK court decisions and therefore the ruling in favor of HMRC is not binding in the context of our structures. Further, we consider there are differences in the fact pattern and structure between this case and our 2003 leasing arrangements and therefore

is not necessarily indicative of any outcome should HMRC challenge us and we remain confident that our fact pattern is sufficiently different to succeed if we are challenged by HMRC. HMRC have written to our lessor to indicate that they believe our lease may be similar to the case noted above. We have reviewed the details of the case and the basis of the judgment with our legal and tax advisers to ascertain what impact, if any, the judgment may have on us and the possible range of exposure has been estimated at approximately £ nil to £108 million British Pounds. We are currently in conversation with HMRC on this matter, presenting the factual background of our position.

Legal proceedings and claims

We may, from time to time, be involved in legal proceedings and claims that arise in the ordinary course of business. A provision will be recognized in the financial statements only where we believe that a liability will be probable and for which the amounts are reasonably estimable, based upon the facts known prior to the issuance of the financial statements.

Other

We are party to a shareholders’ agreement with a consortium of investors to fund the development of pipeline infrastructure and an FSRU which are intended to supply two power plants in the Ivory Coast. The project is currently in the initial design phase, with FID currently expected to be taken in the first half of 2018. Negotiations are underway with third party lenders for the financing of construction costs in the event a positive investment decision is made. During the initial phase of the project, our remaining contractual commitments for this project are estimated to be in the region of €1 million . In the event a positive FID is taken on the project, this could increase up to approximately €15 million . This figure is dependent upon a variety of factors such as whether third party financing is obtained for a portion of the construction costs. The timing of this range of payments is dependent on whether and when FID is made, progress of negotiations with lenders for non-investor financing, and the progress of eventual construction work. The nature of payments to the project could be made in a combination of capital contributions or interest-bearing shareholder loans.

16. SUBSEQUENT EVENTS

On August 15, 2017, we entered into a purchase and sale agreement (the “Hilli Sale Agreement”) with Golar Partners for the disposal (the “Hilli Disposal”) from Golar and affiliates of Keppel Shipyard Limited (“Keppel”) and Black and Veatch (“B&V”) of common units (the “Disposal Interests”) in Hilli LLC, which will, on the closing date of the Hilli Disposal, indirectly own the Hilli . The Disposal Interests represent the equivalent of 50% of the two liquefaction trains, out of a total of four , that will be contracted to Perenco Cameroon (“Perenco”), Societe Nationale de Hydrocarbures (“SNH”) and the Republic of Cameroon (together with Perenco and SNH, the “Customer”) under an eight -year liquefaction tolling agreement (the “Liquefaction Tolling Agreement”). The sale price for the Disposal Interests is $658 million less net lease obligations under the financing facility for the Hilli (the “Hilli Facility”), which are expected to be between $468 and $480 million . Concurrently with the execution of the Hilli Disposal Agreement, we received a further $70 million deposit from Golar Partners, upon which we will pay interest at a rate of 5% per annum.

The closing of the Hilli Disposal (the "Closing") is subject to the satisfaction of certain closing conditions which include, among others, receiving the consent of the lenders under the Hilli Facility, the closing of the previously announced Put-Sale Closing with respect to the Golar Tundra , the delivery to, and acceptance by, the Customer of the Hilli , the commencement of commercial operations under the liquefaction tolling agreement (the " LTA " ) and the formation of Golar Hilli LLC and the related Pre-Closing Contributions as described further below.

Prior to the Closing, we, along with Keppel and B&V, will contribute our equity interests in Hilli Corp to the newly formed Golar Hilli LLC (the "Pre-Closing Contributions") in return for equity interests in Golar Hilli LLC. Membership interests in Golar Hilli LLC will be represented by three classes of units: Common Units ("Common Units"); Series A Special Units ("Series A Units"); and Series B Special Units ("Series B Units"). Common Units will be entitled to cash flows from the first 50% of contracted capacity, initially contracted to the Customer under the LTA, at all times. Common Units will not be exposed to the oil-linked pricing elements of the tolling fee under the LTA, but will bear the operating costs of the Hilli , and the interest costs of the Hilli financing facility with only incremental costs accruing to the Series B Units. Series A Units will only be entitled to cash flows associated with oil price linked elements of the tolling fee under the LTA, net of incremental tax expenses and their pro rata portion of any costs that may arise as a result of the underperformance of the Hilli ("Underperformance Costs"). Holders of Series B Units will be entitled to the cash flows associated with any expansion of contracted capacity of the Hilli beyond the first 50% , net of incremental costs arising as a result of making available more than the first 50% of production capacity of the Hilli ("Incremental Costs"), Underperformance Costs and any reduction in revenue attributable to the first 50% of LNG production capacity as a result of making more than 50% of capacity available under the LTA. In the Hilli Disposal, Golar Partners will only acquire 50% of the Common Units and none of the Series A Units or Series B Units.

Upon the closing of the Hilli Disposal, which is expected to occur on or before April 30, 2018, we, along with Keppel and B&V, will sell 50% of the Hilli Common Units to Golar Partners in return for the payment by Golar Partners of the net purchase price of between approximately $178 and $190 million . Golar Partners will apply the $107 million Deferred Purchase Price receivable from us in connection with the Tundra Put Sale and the $70 million deposit referred to above against the net purchase price and will pay the balance with cash on hand.

In August 2017, we declared a dividend of $0.05 per share in respect of the quarter ended June 30, 2017 to holders of record on September 14, 2016, which will be paid on or about October 4, 2016.

In September 2017, we made further capital contributions of $27.0 million to Golar Power, in accordance with the shareholders agreement.

On May 2, 2017, OneLNG, our joint venture, together with Ophir Energy, GEPetrol and The Republic of Equatorial Guinea (the "Fortuna Project Participants”), signed a detailed Umbrella Agreement that defines the full legal and fiscal framework for the 2.6 Tcf Fortuna gas reserves, offshore Equatorial Guinea. Subsequent to June 30, 2017 , the Fortuna Project Participants also agreed the LNG sales structure, and selected Gunvor Group Ltd. (“Gunvor”) as off-taker. Principal commercial terms have been agreed with Gunvor for a sale and purchase agreement covering 2.2 mtpa of LNG over a 10 year term. The LNG will be sold on a Brent-linked FOB basis. The LNG offtake structure also permits the Fortuna Project Participants to market up to 1.1 mtpa of the above 2.2 mtpa to higher priced gas markets and to share in any resultant profits. The Fortuna Project Participants have two years post final investment decision to secure alternative markets for this 1.1 mtpa after which any unsold portion will revert to Gunvor. Final investment decision is expected to occur by the end of 2017.

Execution Copy

PURCHASE AND SALE AGREEMENT

DATED AUGUST 15, 2017

AMONG

GOLAR LNG LIMITED

KS INVESTMENTS PTE. LTD.

BLACK & VEATCH INTERNATIONAL COMPANY

AND

GOLAR PARTNERS OPERATING LLC

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

Section 1.01 Definitions 2

ARTICLE II

PURCHASE AND SALE OF THE UNITS; CLOSING

Section 2.01 Purchase and Sale of the Units; Deposit 8

Section 2.02 Closing 8

Section 2.03 Place of Closing 8

Section 2.04 Purchase Price Adjustment 8

Section 2.05 Satisfaction of Certain Intercompany Receivables 9

Section 2.06 Construction Costs 9

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BUYER

Section 3.01 Organization; Good Standing and Authority 9

Section 3.02 Authorization, Execution and Delivery of this Agreement 9

Section 3.03 No Conflicts 9

Section 3.04 No Consents 10

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Section 4.01 Organization; Good Standing and Authority 10

Section 4.02 Authority and Authorization; Execution and Delivery of this Agreement 10

Section 4.03 No Conflicts 10

Section 4.04 No Consents 10

Section 4.05 Ownership of Common Units and Hilli Corp Shares 11

Section 4.06 No Broker’s Fees 11

ARTICLE V

REPRESENTATIONS AND WARRANTIES REGARDING THE TRANSFERRED SUBSIDIARIES

Section 5.01 Organization; Good Standing and Authority 11

Section 5.02 Capitalization; No Options 11

Section 5.03 Organizational Documents 12

Section 5.04 Validity of Certain Key Agreements 12

Section 5.05 Validity of the LTA 12

Section 5.06 No Conflicts 12

Section 5.07 Title to Vessel; Encumbrances 13

Section 5.08 Litigation 13

Section 5.09 Indebtedness to and from Officers, etc 13

Section 5.10 Personnel 13

Section 5.11 Contracts and Agreements 13

Section 5.12 Compliance with Law 14

Section 5.13 No Undisclosed Liabilities 14

Section 5.14 Disclosure of Information 14

Section 5.15 Insurance 14

Section 5.16 U.S. Tax Classification 14

ARTICLE VI

REPRESENTATIONS AND WARRANTIES
REGARDING THE VESSEL

Section 6.01 Flag 15

Section 6.02 Classification 15

Section 6.03 Maintenance 15

Section 6.04 Liens 15

Section 6.05 Safety 15

Section 6.06 No Blacklisting or Boycotts 15

Section 6.07 No Options 15

Section 6.08 Vessel Performance 16

Section 6.09 Intellectual Property 16

ARTICLE VII

PRE-CLOSING MATTERS

Section 7.01 Covenants of the Sellers Prior to the Closing 16

Section 7.02 Covenant of Buyer Prior to the Closing 17

ARTICLE VIII

CONDITIONS OF CLOSING

Section 8.01 Conditions of the Parties 18

Section 8.02 Conditions to the Sellers’ Obligations 18

Section 8.03 Conditions to Buyer’s Obligations 19

ARTICLE IX

COVENANTS OF THE SELLERS

Section 9.01 Golar Credit Support 20

Section 9.02 Golar Guarantee of Hilli Facility 20

Section 9.03 Provision of Service Boats 20

ARTICLE X

TERMINATION, AMENDMENT AND WAIVER

Section 10.01 Termination of Agreement 21

Section 10.02 Amendments and Waivers 21

ARTICLE XI

INDEMNIFICATION; REIMBURSEMENTS

Section 11.01 Indemnity by the Sellers 21

Section 11.02 Indemnity by Buyer 22

Section 11.03 Reimbursements 22

ARTICLE XII

MISCELLANEOUS

Section 12.01 Further Assurances 23

Section 12.02 Powers of Attorney 23

Section 12.03 Headings; References; Interpretation 24

Section 12.04 Successors and Assigns 24

Section 12.05 No Third Party Rights 24

Section 12.06 Counterparts 24

Section 12.07 Governing Law 24

Section 12.08 Severability 25

Section 12.09 Integration 25

Section 12.10 Notices 25

Section 12.11 Survival of Representations and Warranties 25

Section 12.12 Arbitration 25

Section 12.13 Damages 26


Schedule A	Common Units Owned and to be Sold by Each Seller


Schedule B	Hilli Corp Shares Owned by Each Seller


Schedule C	Insurance


Exhibit I	Third Letter Agreement


Exhibit II	Form of Limited Liability Company Agreement of Golar Hilli LLC

PURCHASE AND SALE AGREEMENT (the “ Agreement ”), dated as of August 15, 2017, by and among GOLAR LNG LIMITED, a Bermuda exempted company (“ Golar ”), KS Investments Pte. Ltd., a company incorporated in the British Virgin Islands (“ Keppel ”), and Black & Veatch International Company, a Missouri corporation (“ B&V ” and, together with Golar and Keppel, the “ Sellers ”), and GOLAR PARTNERS OPERATING LLC, a Marshall Islands limited liability company (“ Buyer ”), each a “ Party ” and collectively, the “ Parties .”

RECITALS

WHEREAS , Buyer wishes to purchase from the Sellers, and the Sellers wish to sell to Buyer, an aggregate of 1,230 common units representing limited liability company interests (the “ Units ”) in Golar Hilli LLC, a Marshall Islands limited liability company (“ Hilli LLC ”), that will be formed by Golar prior to the Closing Date (as defined herein);

WHEREAS , on the Closing Date, the Sellers will be the record owners of all of the outstanding limited liability company interests of Hilli LLC which will consist of a total of 2,460 common units (the “ Common Units ”), 2,460 Series A Special Units and 2,460 Series B Special Units;

WHEREAS , Golar GHK Lessors Limited, an indirect wholly owned subsidiary of Golar (“ Golar GHK ”), KSI Production Pte. Ltd., an indirect wholly owned subsidiary of Keppel (“ KSI Production ”) and B&V are the record owners of all of the outstanding shares of capital stock (the “ Hilli Corp Shares ”) of Golar Hilli Corporation, a Marshall Islands corporation (“ Hilli Corp ”);

WHEREAS , prior to the Closing Date, Golar GHK will transfer all of the Hilli Corp Shares owned by it to Golar, and KSI Production will transfer all of the Hilli Corp Shares owned by it to Keppel;

WHEREAS , prior to the Closing Date, each Seller will contribute all of the Hilli Corp Shares owned by it to Hilli LLC (the “ Hilli Corp Share Contribution ”);

WHEREAS , Hilli Corp is the record owner of all of the outstanding shares (the “ Golar Cam Shares ”) of Golar Cameroon SASU, a Cameroon limited liability company (“ Golar Cam ”);

WHEREAS , Hilli Corp is a party to that certain Memorandum of Agreement, dated September 9, 2015 (the “ MOA ”), pursuant to which Hilli Corp will sell to Fortune Lianjiang Shipping S.A., a company incorporated under the laws of Hong Kong (the “ Legal Owner ”), the Hilli Episeyo (the “ Vessel ”), a floating liquefaction vessel (“ FLNG ”);

WHEREAS , the Vessel is subject to a bareboat charter party (including the additional clauses thereto), dated September 9, 2015, by and between Hilli Corp and the Legal Owner (the “ Bareboat Charter ”);

WHEREAS , Hilli Corp and Golar Cam will enter into a Liquefaction Tolling Agreement (“ LTA ”) with Société Nationale Des Hydrocarbures, a Cameroon company (“ SNH ”), and Perenco Cameroon SA, a Cameroon limited liability company (“ Perenco ” and, together with SNH, the “ Customer ”), providing for certain services (“ FLNG Services ”) to be rendered to the Customer by Hilli Corp and/or Golar Cam utilizing the Vessel;

WHEREAS , Hilli Corp and Golar Cam are parties to an Operation and Services Agreement, dated October 30, 2015 (the “ O&S Agreement ”), regarding the subcontracting of certain FLNG Services by Hilli Corp to Golar Cam; and

WHEREAS , Hilli Corp, Golar Cam, Perenco, the Republic of Cameroon and SNH are parties to a Gas Agreement, dated September 30, 2015 (the “ Gas Agreement ”), which provides the technical, legal, financial and economic conditions for the FLNG export project in Cameroon which includes the Vessel.

NOW, THEREFORE , the Parties hereto agree as follows:

Article I

DEFINITIONS

Section 1.01 Definitions . In this Agreement, unless the context requires otherwise or unless otherwise specifically provided herein, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

“ 1934 Act Filings ” means the filings Golar has made with the Securities and Exchange Commission under the Securities Exchange Act of 1934.

“ Acceptance Date ” shall have the meaning specified in the LTA.

“ Acceptance Minimum Requirements ” shall have the meaning specified in the LTA.

“ Acceptance Tests ” shall have the meaning specified in the LTA.

“ Additional Amount ” shall have the meaning set forth in the Third Letter Agreement.

“ Agreement ” means this Agreement, including its recitals, schedules and exhibits, as amended and supplemented.

“ Amended Hilli Facility Documents ” means the Amendments to the Hilli Facility Documents, together with any such additional documents as are necessary to provide for the Hilli Facility Amendment.

“ Applicable Law ” in respect of any Person, property, transaction or event, means all laws, statutes, ordinances, regulations, municipal by-laws, treaties, judgments and decrees applicable to that Person, property, transaction or event and, whether or not having the force of law, all applicable official directives, rules, consents, approvals, authorizations, guidelines, orders, codes of practice and policies of any Governmental Authority having or purporting to have authority over that Person, property, transaction or event and all general principles of common law and equity.

“ B&V ” has the meaning given to it in the Preamble to this Agreement.

“ Bareboat Charter ” has the meaning given to it in the recitals.

“ Business Day ” means any day other than a Saturday, Sunday or any statutory holiday on which banks in London or New York are required to close.

“ Buyer ” has the meaning given to it in the Preamble to this Agreement.

“ Buyer Attorney-in-Fact ” has the meaning given to it in Section 12.02(a) .

“ Buyer Indemnitees ” has the meaning given to it in Section 11.01 .

“ Buyer Reimbursement ” has the meaning given to it in Section 11.03(a) .

“ Closing ” has the meaning given to it in Section 2.02 .

“ Closing Date ” means the day on which the Closing takes place.

“ Commercial Management Agreement ” the agreement dated April 4, 2003, as novated on April 2, 2015, between Hilli Corp and the Commercial Manager in respect of the commercial management of the Vessel.

“ Commercial Manager ” means Golar Management Limited.

“ Commissioning Activities ” shall have the meaning specified in the LTA.

“ Common Terms Agreement ” means the Common Terms Agreement, dated as of September 9, 2015, made by and between Hilli Corp, Golar and the Legal Owner.

“ Common Units ” means the common units representing limited liability company interests of Golar Hilli.

“ Conflicts Committee ” means the conflicts committee of the board of directors of Golar Partners.

“ Construction Costs ” has the meaning set forth in Section 2.06 .

“ Contracts ” has the meaning given to it in Section 5.045 .

“ Conversion Contract ” means the Engineering, Procurement & Construction Contract Between Keppel Shipyard Limited and Hilli Corp for the Repair Modification and Conversion of the Vessel into a FLNG Vessel.

“ Covered Environmental Losses ” means all Losses suffered or incurred by Buyer Indemnitees by reason of, arising out of or resulting from:

(a) any violation or correction of violation of Environmental Laws; or

(b) any event or condition relating to environmental or human health and safety matters,

in each case, associated with the ownership or operation by Buyer of the Vessel (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Vessel or the disposal or release of, or exposure to, Hazardous Substances generated by or otherwise related to operation of the Vessel), including, without limitation, the reasonable and documented cost and expense of (i) any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation or other corrective action required or necessary under Environmental Laws, (ii) the preparation and implementation of any closure, remedial, corrective action or other plans required or necessary under Environmental Laws and (iii) any environmental or toxic tort (including, without limitation, personal injury or property damage claims) pre-trial, trial or appellate legal or litigation support work; but only to the extent that such violation complained of under clause (a), or such events or conditions included in clause (b), occurred before the Closing Date; and, provided that, in no event shall Losses to the extent arising from a change in any Environmental Law after the Closing Date be deemed “ Covered Environmental Losses .”

“ Customer ” has the meaning given to it in the Recitals.

“ Customer Credit Support ” shall have the meaning specified in the LTA.

“ Daily LDs ” shall have the meaning specified in the LTA.

“ Deferred Purchase Price ” shall have the meaning set forth in the Third Letter Agreement.

“ Deposit ” has the meaning given to it in Section 2.01 .

“ Encumbrance ” means any mortgage, maritime or other lien, charge, assignment, adverse claim, hypothecation, restriction, option, covenant, voting trust arrangement, adverse claim, condition, encumbrance or right, whether fixed or floating, on, or any security interest in, any property whether real, personal or mixed, tangible or intangible, any pledge or hypothecation of any property, any deposit arrangement, priority, conditional sale agreement, other title retention agreement or equipment trust, capital lease or other security arrangements of any kind.

“ Enforceability Exceptions ” has the meaning given to it in Section 3.02 .

“ Environmental Laws ” means all international, federal, state, foreign and local laws, statutes, rules, regulations, treaties, conventions, orders, judgments and ordinances having the force and effect of law and relating to protection of natural resources, health and safety and the environment, each in effect and as amended through the Closing Date.

“ FLNG ” has the meaning given to it in the Recitals.

“ FLNG Services ” has the meaning given to it in the Recitals.

“ Gas Agreement ” has the meaning given to it in the Recitals.

“ Golar ” has the meaning given to it in this Preamble to this Agreement.

“ Golar Attorney-in-Fact ” has the meaning given to it in Section 12.02(b) .

“ Golar Cam ” has the meaning given to it in the Recitals.

“ Golar Cam Shares ” has the meaning given to it in the Recitals.

“ Golar Credit Support ” shall have the meaning specified in the LTA.

“ Golar GHK ” has the meaning given to it in the Recitals.

“ Golar Partners ” means Golar LNG Partners LP, a Marshall Islands limited partnership.

“ Governmental Authority ” means any domestic or foreign government, including federal, provincial, state, municipal, county or regional government or governmental or regulatory authority, domestic or foreign, and includes any department, commission, bureau, board, administrative agency or regulatory body of any of the foregoing and any multinational or supranational organization.

“ Hazardous Substances ” means (a) each substance defined, designated or classified as a hazardous waste, hazardous substance, hazardous material, solid waste, contaminant or toxic substance under Environmental Laws; (a) petroleum and petroleum products, including crude oil and any fractions thereof; (a) natural gas, synthetic gas and any mixtures thereof; (a) any radioactive material; and (a) any asbestos-containing materials in a friable condition.

“ Hilli Corp ” has the meaning given to it in the Recitals.

“ Hilli Corp Share Contribution ” has the meaning given to it in the Recitals.

“ Hilli Corp Shares ” has the meaning given to it in the Recitals.

“ Hilli LLC ” has the meaning given to it in the Recitals.

“ Hilli LLC Agreement ” has the meaning given to it in Section 8.01(e).

“ Hilli Facility ” means the financing arrangement for the Vessel evidenced by the Hilli Facility Documents.

“ Hilli Facility Amendment ” means the amendment to the Hilli Facility, evidenced by the Amended Hilli Facility Documents, which will increase the financing under the Hilli Facility to between $930 million and $960 million.

“ Hilli Facility Documents ” means the Bareboat Charter, the MOA, Common Terms Agreement, the Hilli Facility Amendment and the other Finance Documents (as defined in the Common Terms Agreement) and any related documents entered into in connection with the Hilli Facility and, following the entry into the Hilli Facility Amendment, shall include the Amended Hilli Facility Documents.

“ Insolvency Event ” means, with respect to any Person, that any of the following actions has occurred in relation to it:

(a) an order has been made or an effective resolution passed or other proceedings or actions taken (including, without limitation, the presentation of a petition) with a view to its administration, bankruptcy, winding-up, liquidation or dissolution; or

(b) it has had a receiver, administrative receiver, manager or administrator appointed over all or any substantial part of its undertaking or assets; or

(c) any event has occurred or situation arisen in any jurisdiction that has a substantially similar effect to any of the foregoing.

“ Intellectual Property ” has the meaning given to it in Section 6.09 .

“ Keppel ” has the meaning given to it in the Preamble to this Agreement.

“ Key Agreements ” has the meaning given to it in Section 5.04 .

“ KSI Production ” has the meaning given to it in the Recitals.

“ Legal Owner ” has the meaning given to it in the Recitals.

“ Liquefaction License ” means the natural gas liquefaction license granted by the Minister of Water and Energy of the Republic of Cameroon to Golar Cam dated April 27, 2017.

“ Losses ” means, with respect to any matter, all losses, claims, damages (including Daily LDs), liabilities, deficiencies, costs, expenses (including all costs of investigation, legal and other professional fees and disbursements, interest, penalties and amounts paid in settlement) or diminution of value, whether or not involving a claim from a third party, however specifically excluding consequential, special and indirect losses.

“ LTA ” has the meaning given to it in the Recitals.

“ Material Agreements ” has the meaning given to it in Section 5.11 .

“ MOA ” has the meaning given to it in the Recitals.

“ Net Purchase Price ” has the meaning given to it in Section 2.02 .

“ Net Working Capital ” means the sum of all current assets and current liabilities as set forth on the consolidated balance sheet of Hilli LLC as of the Closing Date.

“ O&S Agreement ” has the meaning given to it in the Recitals.

“ Operating Expenses ” means, all expenditures made by Hilli LLC and its subsidiaries, including vessel operating expenses, taxes, maintenance expenses and employee compensation and benefits, and capital expenditures, in each case as computed in accordance with generally accepted accounting practices in the United States, as applied by Hilli Corp on the date of this Agreement. Operating Expenses shall not include any withholding taxes thereon.

“ Organizational Documents ” means, with respect to any entity, its articles of association, articles of incorporation and/or bylaws, certificate of formation and/or limited liability company agreement, certificate of limited partnership and/or agreement of limited partnership and/or other organizational documents.

“ Ownership Interest ” means, with respect to Golar, 89.11%, with respect to Keppel, 10.00%, and with respect to B&V, 0.89%.

“ Party ” or “ Parties ” has the meaning given to it in the Preamble to this Agreement.

“ Perenco ” has the meaning given to it in the Recitals.

“ Person ” means an individual, legal personal representative, corporation, body corporate, firm, limited liability company, partnership, trust, trustee, syndicate, joint venture, unincorporated organization or Governmental Authority.

“ Purchase Price ” has the meaning given to it in Section 2.01 .

“ Purchase Price Adjustments ” has the meaning given to it in Section 2.04 .

“ Related Party Indebtedness ” has the meaning given to it in Section 5.09 .

“ Seller Indemnitees ” has the meaning given to it in Section 11.02 .

“ Sellers ” has the meaning given to it in the Preamble to this Agreement.

“ Sellers Reimbursement ” has the meaning given to it in Section 11.03(b).

“ Taxes ” means all income, franchise, business, property, sales, use, goods and services or value added, withholding, excise, alternate minimum capital, transfer, customs, anti-dumping, countervail, net worth, stamp, registration, payroll, employment, health, education, business, school, local improvement, development and occupation taxes, surtaxes, duties, levies, imposts, rates, fees, assessments, dues and charges and other taxes required to be reported upon or paid to any Governmental Authority and all interest and penalties thereon.

“ Third Letter Agreement ” means the letter agreement, dated May 30, 2017, between Golar and Buyer attached as Exhibit I hereto.

“ Time of Closing ” has the meaning given to it in Section 2.02 .

“ Transferred Subsidiaries ” means, collectively, Hilli LLC, Hilli Corp and Golar Cam.

“ Tundra Put Sale Closing ” means the closing of the put sale of the shares of capital stock of Golar Tundra Corp. to Golar pursuant to the Third Letter Agreement.

“ Units ” has the meaning given to it in the Recitals.

“ Vessel ” has the meaning given to it in the recitals.

“ Vessel Management Agreements ” means the O&S Agreement and the Commercial Management Agreement.

ARTICLE II

PURCHASE AND SALE OF THE UNITS; CLOSING

Section 2.01 Purchase and Sale of the Units; Deposit . The Sellers agree to sell and transfer to Buyer, and Buyer agrees to purchase from the Sellers, for an aggregate amount equal to $658 million (the “ Purchase Price ”) and in accordance with and subject to the terms and conditions set forth in this Agreement, the Units set forth in Schedule A . The Purchase Price has been determined on the basis that the net lease obligations under the Hilli Facility as of the Closing Date are $960 million. The Sellers and the Buyer agree that the proceeds from the Hilli Facility Amendment will be used to pay any remaining Construction Costs with the remainder to be distributed to the Sellers in accordance with their respective Ownership Interests, it being understood that the economic benefits arising therefrom are for the benefit of the Sellers according to their Ownership Interests and not the Buyer, regardless of whether such distribution occurs before or after Closing (so as not to be an event that may delay Closing, although the Sellers will endeavor to conclude such distribution within 3 months from the date of the final disbursement of proceeds under the Hilli Facility Amendment or so soon as practicable). On the Closing Date, the Purchase Price shall be (a) increased in an amount equal to 50% of the amount by which the net lease obligations under the Hilli Facility as of the Closing Date are less than $960 million or (b) decreased in an amount equal to 50% of the amount by which the net lease obligations under the Hilli Facility as of the Closing Date are greater than $960 million. Concurrently with the execution of this Agreement, Buyer has paid an initial deposit of $70 million of the Purchase Price to Golar (the “ Deposit ”). The Deposit shall bear interest at a rate of 5% per annum and interest thereon shall be for the account of Buyer and applied as set forth in Section 2.02 .

Section 2.02 Closing . On the terms and subject to the conditions of this Agreement, the sale and transfer of the Units and payment of the Purchase Price less the Deposit and the interest thereon to the Time of Closing and (y) the Deferred Purchase Price and the Additional Amount (the “ Net Purchase Price ”) shall take place on April 30, 2018 or on such other date as may be agreed upon by the Sellers and Buyer (the “ Time of Closing ”). The sale and transfer of the Units is hereinafter referred to as the “ Closing .” In the event the Closing has not occurred by April 30, 2018 for any reason, the Deposit together with interest thereon at a rate of 5% per annum shall be refunded by Golar to Buyer on such date.

Section 2.03 Place of Closing . The Closing shall occur at a place agreed upon by the Sellers and Buyer.

Section 2.04 Purchase Price Adjustment . Within 90 days following the Closing Date, Buyer and the Sellers shall agree upon a post-Closing adjustment to the Purchase Price in an amount by which Net Working Capital (excluding inventory, debt, payables associated with the Seller obligations pursuant to Section 11.01 and Construction Costs) exceeds or is less than $1.0 million (the “ Purchase Price Adjustment ”).

Within 120 days following the Closing Date, the Sellers or Buyer, as applicable, shall pay to the other Party or Parties an amount, in cash, equal to the Purchase Price Adjustment pursuant to this Section 2.04 .

Section 2.05 Satisfaction of Certain Intercompany Receivables . Each Seller hereby acknowledges that, upon receipt of the Purchase Price, any amounts payable to it and its subsidiaries by Hilli LLC, Hilli Corp or Golar Cam, other than trade receivables (excluding Construction Costs), will be extinguished.

Section 2.06 Construction Costs . Notwithstanding anything herein to the contrary, the Sellers hereby agree to pay any amounts payable in connection with conversion or construction or payments related to the construction of the Vessel (“ Construction Costs ”).

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Sellers that as of the date hereof and on the Closing Date:

Section 3.01 Organization; Good Standing and Authority . Buyer has been duly formed and is validly existing in good standing under the laws of the Republic of the Marshall Islands and has all requisite limited liability company power and authority to operate its assets and conduct its business as it is now being conducted. No Insolvency Event has occurred with respect to Buyer and no events or circumstances have arisen that entitle or could entitle any person to take any action, appoint any person, commence proceedings or obtain any order instigating an Insolvency Event.

Section 3.02 Authorization, Execution and Delivery of this Agreement . Buyer has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and all documents, instruments and agreements required to be executed and delivered by Buyer pursuant to this Agreement in connection with the completion of the transactions contemplated by this Agreement, have been duly authorized by all necessary action on its part, and this Agreement has been duly executed and delivered by Buyer and constitutes a legal, valid and binding obligation of Buyer enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws of general application affecting the enforceability of remedies and rights of creditors and except that equitable remedies such as specific performance and injunction are in the discretion of a court (the “ Enforceability Exceptions ”).

Section 3.03 No Conflicts . The execution, delivery and performance by Buyer of this Agreement will not conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of: (a) Buyer’s Organizational Documents; (a) any Encumbrance, bond, indenture, agreement, contract, franchise license, permit or other instrument or obligation to which Buyer is a party or is subject or by which any of its assets or properties may be bound; or (a) any Applicable Laws.

Section 3.04 No Consents . Except as have already been obtained or that will be obtained prior to the Time of Closing, no consent, permit, approval or authorization of, notice or declaration to or filing with any Governmental Authority or any other Person, including those related to any environmental laws or regulations, is required in connection with the execution and delivery by Buyer of this Agreement or the consummation by Buyer of the transactions contemplated hereunder.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Each Seller represents and warrants to Buyer that as of the date hereof and on the Closing Date:

Section 4.01 Organization; Good Standing and Authority . Seller has been duly incorporated and is validly existing and in good standing under the laws of its respective jurisdiction of formation and has all requisite power and authority to operate its assets and conduct its business and, with respect to Golar, as described in the 1934 Act Filings. No Insolvency Event has occurred with respect to Seller and no events or circumstances have arisen that entitle or could entitle any person to take any action, appoint any person, commence proceedings or obtain any order instigating an Insolvency Event.

Section 4.02 Authority and Authorization; Execution and Delivery of this Agreement . Seller has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and all documents, instruments and agreements required to be executed and delivered by Seller pursuant to this Agreement in connection with the completion of the transactions contemplated by this Agreement (including the Hilli LLC Agreement), have been duly authorized by all necessary action on its part, and this Agreement has been duly executed and delivered by Seller and constitutes a legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, except as may be limited by the Enforceability Exceptions.

Section 4.03 No Conflicts . The execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereunder will not conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of: (a) Seller’s Organizational Documents; (a) any Encumbrance, bond, indenture, agreement, contract, franchise license, permit or other instrument or obligation to which Seller is a party or is subject or by which any of its assets or properties may be bound; or (a) any Applicable Laws.

Section 4.04 No Consents . Except as have already been obtained or that will be obtained prior to the Time of Closing, no consent, permit, approval or authorization of, notice or declaration to or filing with any Governmental Authority or any other Person, including those related to any environmental laws or regulations, is required in connection with the execution and delivery by Seller of this Agreement or the consummation by Seller of the transactions contemplated hereunder.

Section 4.05 Ownership of Common Units and Hilli Corp Shares . As of the Closing Date, such Seller will own the Common Units set forth opposite its name in Schedule A and will have good and valid title to such Common Units, free and clear of any and all Encumbrances, and, upon conveyance on the Closing Date of the certificate representing the Common Units to be sold by such Seller as set forth on Schedule A, endorsed by such Seller in favor of Buyer, Buyer will receive good and valid title to such Common Units, free and clear of any and all Encumbrances. As of the date hereof, such Seller owns the Hilli Corp Shares set forth opposite its name in Schedule B and has good and valid title thereto, free and clear of any and all Encumbrances other than those arising under the Hilli Facility Documents.

Section 4.06 No Broker’s Fees . No one is entitled to receive any finder’s fee, brokerage, or other commission in connection with the purchase of the Units or the consummation of the transactions contemplated by this Agreement.

ARTICLE V

REPRESENTATIONS AND WARRANTIES REGARDING THE TRANSFERRED SUBSIDIARIES

Golar represents and warrants to Buyer (except (1) as to Section 5.09, each of Golar and Keppel represents and warrants to Buyer and (2), as to Section 5.11, each of Golar, Keppel and B&V represents and warrants to Buyer) that (a) in the case of the Sellers and the Transferred Subsidiaries other than Hilli LLC, as of the date hereof and on the Closing Date and (b) in the case of Hilli LLC, on the Closing Date:

Section 5.01 Organization; Good Standing and Authority . Each of the Transferred Subsidiaries has been or will on the Closing Date have been duly incorporated and is and will be validly existing in good standing under the laws of its respective jurisdiction of formation or incorporation and has and will have all requisite power and authority to own and operate its assets and conduct its business. No Insolvency Event has occurred with respect to any of the Transferred Subsidiaries, and no events or circumstances have arisen that entitle or could entitle any person to take any action, appoint any person, commence proceedings or obtain any order instigating an Insolvency Event with respect to the Transferred Subsidiaries. Each of the Transferred Subsidiaries is qualified to do business, is in good standing and has all required and appropriate licenses and authorizations in each jurisdiction in which its failure to obtain or maintain such qualification, good standing, licensing or authorization would have a material adverse effect on its condition (financial or otherwise), assets, properties, business or prospects.

Section 5.02 Capitalization; No Options . On the Closing Date, the issued and outstanding limited liability company interests of Hilli LLC will consist of 2,460 Common Units, 2,460 Series A Special Units and 2,460 Series B Special Units. On the Closing Date, all of such units will have been duly authorized and validly issued in accordance with the Organizational Documents of Hilli LLC and will be fully paid and non-assessable. As of the Closing Date, Hilli LLC will own all of the Hilli Corp Shares free and clear of any Encumbrances, other than those arising under the Hilli Facility Documents. The Hilli Corp Shares have been duly authorized and validly issued in accordance with the Organizational Documents of Hilli Corp and are fully paid and non-assessable. As of the date hereof, Hilli Corp owns all of the Golar Cam Shares and has good and valid title thereto, free and clear of any and all Encumbrances. The Golar Cam Shares have been duly authorized and validly issued in accordance with the Organizational Documents of Golar Cam and are fully paid and non-assessable. On the date hereof, and on the Closing Date, other than as set forth in the Organizational Documents of Hilli Corp and Hilli LLC, there are not and there will not be outstanding (i) any options, warrants, pre-emptive or other rights to purchase any equity interests of any Transferred Subsidiary, (ii) any securities convertible into or exchangeable for such equity interests of any Transferred Subsidiary or (iii) any other commitments of any kind for the issuance of additional equity interests of any Transferred Subsidiary or options, warrants or other securities of any Transferred Subsidiary.

Section 5.03 Organizational Documents . The Sellers have supplied to Buyer true and correct copies of the Organizational Documents, as amended to the Closing Date of each Transferred Subsidiary, and no amendments will be made to the Organizational Documents prior to the Closing Date without the prior written consent of Buyer (such consent not to be unreasonably withheld).

Section 5.04 Validity of Certain Key Agreements . The Sellers have supplied to Buyer true and correct copies of the Gas Agreement, the Vessel Management Agreements, the Hilli Facility Documents, the Liquefaction License and any related documents, as amended through the Closing Date (the “ Key Agreements ”). Each of the Key Agreements is a valid and binding agreement of the Sellers and each of the Transferred Subsidiaries party thereto, as applicable, enforceable against it in accordance with its terms and, to the knowledge of Golar and Keppel, each of the Key Agreements is a valid and binding agreement of all other parties thereto enforceable against such parties in accordance with its terms, except as may be limited by the Enforceability Exceptions.

Section 5.05 Validity of the LTA As of the Closing Date, the LTA will have been duly authorized, executed and delivered by the parties thereto, and the LTA will be a valid and binding agreement of Hilli Corp and Golar Cam, enforceable against Hilli Corp and Golar Cam in accordance with its terms, except as may be limited by the Enforceability Exceptions. To the knowledge of Golar and Keppel, as of the Closing Date, the LTA will be a valid and binding agreement of Perenco and SNH, enforceable against Perenco and SNH in accordance with its terms, except as may be limited by the Enforceability Exceptions. The LTA and the Key Agreements are referred to collectively herein as the “ Contracts .”

Section 5.06 No Conflicts . The execution, delivery and performance of this Agreement will not conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of: (a) the Organizational Documents of any Transferred Subsidiaries; (a) any Encumbrance, bond, indenture, agreement, contract, franchise license, permit or other instrument or obligation to which any of the Transferred Subsidiaries is a party or is subject or by which any of its assets or properties may be bound; (a) any Applicable Laws; or (a) give any other party thereto a right to terminate any agreement or other instrument to which any of the Transferred Subsidiaries is a party or by which it is bound.

Section 5.07 Title to Vessel; Encumbrances . As of the Closing Date, Hilli Corp will be the disponent owner and bareboat charterer of the Vessel pursuant to the Hilli Facility Documents. As of the Closing Date, net lease obligations under the Hilli Facility, taking into account the Hilli Facility Amendment, will be between $930 million and $960 million.

Section 5.08 Litigation .

(a) There is no action, suit or proceeding to which any of the Transferred Subsidiaries is a party (either as a plaintiff or defendant) or to which the Vessel is subject pending before any court or governmental agency, authority or body or arbitrator; there is no action, suit or proceeding threatened against any of the Transferred Subsidiaries or the Vessel; and, to the best knowledge of Golar and Keppel, there is no basis for any such action, suit or proceeding;

(b) None of the Transferred Subsidiaries has been permanently or temporarily enjoined by any order, judgment or decree of any court or any governmental agency, authority or body from engaging in or continuing any conduct or practice in connection with the operation of its business or the ownership of its assets or properties; and

(c) There is not in existence any order, judgment or decree of any court or other tribunal or other agency enjoining or requiring any of the Transferred Subsidiaries to take any action of any kind with respect to their respective businesses, assets or properties.

Section 5.09 Indebtedness to and from Officers, etc . As of the Closing Date, none of the Transferred Subsidiaries will be indebted, directly or indirectly, to any person who is an officer, director, stockholder or employee of any of the Sellers or any spouse, child, or other relative or any affiliate of any such person, nor will any such officer, director, stockholder, employee, relative or affiliate be indebted to any of the Transferred Subsidiaries, other than with respect to trade receivables (collectively, “ Related Party Indebtedness ”).

Section 5.10 Personnel . Other than Golar Cam, none of the Transferred Subsidiaries has any employees.

Section 5.11 Contracts and Agreements . All material contracts and agreements, written or oral, to which any of the Transferred Subsidiaries is a party or by which any of its assets are bound, including the Contracts (the “ Material Agreements ”), have been disclosed to Buyer. Except as otherwise contemplated herein, no other contracts will be entered into by any of the Transferred Subsidiaries prior to the Closing Date without the prior consent of Buyer (such consent not to be unreasonably withheld).

(a) As of the Closing Date, each of the Material Agreements will be a valid and binding agreement of the Sellers and the Transferred Subsidiaries party thereto, as applicable, enforceable against it in accordance with its terms, and to the knowledge of the Sellers, each Material Agreement will be a valid and binding agreement of all other parties thereto enforceable against such parties in accordance with their terms, except as may be limited by the Enforceability Exceptions;

(b) As of the Closing Date, each of the Sellers and the Transferred Subsidiaries will have fulfilled all material obligations required to have been performed by it prior to the Closing Date pursuant to the Material Agreements, and none of the Sellers or any of the Transferred Subsidiaries will have waived any material rights thereunder; and

(c) There has not occurred any material default on the part of the Sellers or any of the Transferred Subsidiaries under any of the Material Agreements, or to the knowledge of the Sellers, on the part of any other party thereto, nor has any event occurred that with the giving of notice or the lapse of time, or both, would constitute any material default on the part of the Sellers or any of the Transferred Subsidiaries under any of the Material Agreements nor, to the knowledge of the Sellers, has any event occurred that with the giving of notice or the lapse of time, or both, would constitute any material default on the part of any other party to any of the Material Agreements.

Section 5.12 Compliance with Law . The conduct of business by the Transferred Subsidiaries and the operation of the Vessel do not violate any Applicable Laws (including, but not limited to, any of the foregoing relating to employment discrimination, environmental protection or conservation, and the provisions of all international conventions and the rules and regulations issued thereunder applicable to the Vessel), the enforcement of which would materially and adversely affect the business, assets, condition (financial or otherwise) or prospects of the Transferred Subsidiaries, nor have any of the Transferred Subsidiaries or the Sellers received any notice of any such violation.

Section 5.13 No Undisclosed Liabilities . None of the Transferred Subsidiaries or the Vessel has any Encumbrances, or other liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, and whether due or to become due (including, without limitation, any liability for Taxes and interest, penalties and other charges payable with respect to any such liability or obligation), except for such liabilities or obligations arising under the Contracts and other than the Encumbrances or other liabilities or obligations disclosed (to the extent material) to Buyer before the date hereof.

Section 5.14 Disclosure of Information . The Sellers have disclosed to Buyer all material information on, and about, the Transferred Subsidiaries, and the Vessel and all such information is true, accurate, complete and not misleading in any material respect. Nothing has been withheld from any materials provided by the Sellers to Buyer in connection with the transactions contemplated by this Agreement that would render such information untrue or misleading in any material respect.

Section 5.15 Insurance . The insurance policies relating to the Vessel are set forth on Schedule C hereto, each of which will be in full force and effect at the time of the Closing.

Section 5.16 U.S. Tax Classification . Prior to Closing, each of Hilli LLC and Golar Cam will elect to be classified for U.S. federal income tax purposes as an entity disregarded as separate from its owner and Hilli Corp will elect to be classified for U.S. federal income tax purposes as a partnership pursuant to Treas. Reg. Section 301.7701-3. Neither the Sellers nor any of the Transferred Subsidiaries will take any action to change the U.S. federal income tax classification of the Transferred Subsidiaries (other than the change of Hilli LLC to a partnership upon the Closing).

ARTICLE VI

REPRESENTATIONS AND WARRANTIES
REGARDING THE VESSEL

Golar represents and warrants to Buyer (except as to Sections 6.03(a), 6.05(a) and 6.08(a), each of Golar and Keppel represents and warrants to Buyer) that:

Section 6.01 Flag . At the Time of the Closing, the Vessel will be properly registered in the name of the Legal Owner under and pursuant to the flag and law of the Republic of the Marshall Islands, and all fees due and payable in connection with such registration will have been paid.

Section 6.02 Classification . At the Time of the Closing, the Vessel will be entered with Det Norske Veritas Germanischer Lloyd. At the Time of the Closing, the Vessel will be in class without any recommendations or notation as to class or other requirement of the relevant classification society, and if the Vessel is in a port, it will not be in such condition that it cannot be detached by any port state authority or the flag state authority for any deficiency.

Section 6.03 Maintenance . (a) Prior to the delivery of the Vessel under the Conversion Contract, the Vessel will have been maintained in a proper and efficient manner in accordance with the terms of the Conversion Contract and (b) prior to the Closing, the Vessel will have been maintained in a proper and efficient manner in accordance with internationally accepted standards for good ship maintenance, will be in good operating order, condition and repair and be seaworthy and all repairs made to the Vessel and all known scheduled repairs due to be made and all known deficiencies will have been disclosed to Buyer.

Section 6.04 Liens . At the Time of the Closing, the Vessel will not (a) be under arrest or otherwise detained, (b) other than in the ordinary course of business, be in the possession of any Person (other than her master and crew) or (c) be subject to a possessory lien.

Section 6.05 Safety . (a) Upon the delivery of the Vessel under the Conversion Contract, the Vessel will be supplied with valid and up-to-date safety, safety construction, safety equipment, radio, loadline, health, tonnage, trading and other certificates or documents as required under the Conversion Contract and (b) at the Time of the Closing, the Vessel will be supplied with valid and up-to-date safety, safety construction, safety equipment, radio, loadline, health, tonnage, trading and other certificates or documents as may for the time being be prescribed by the law of the Republic of the Marshall Islands or of any other pertinent jurisdiction, or that would otherwise be deemed necessary by a shipowner acting in accordance with internationally accepted standards for good ship management and operations.

Section 6.06 No Blacklisting or Boycotts . On the date hereof and on the Closing Date, no blacklisting or boycotting of any type has been or will have been applied or exists or will exist in respect of the Vessel.

Section 6.07 No Options . Other than as provided in the Hilli Facility Documents, there are no outstanding options or other rights to purchase the Vessel, and on the Closing Date, there will be no outstanding options or other rights to purchase the Vessel.

Section 6.08 Vessel Performance . (a) Upon the delivery of the Vessel under the Conversion Contract, the Vessel will comply in all material respects with the technical and operational specifications set forth in the Conversion Contract and (b) at the Acceptance Date and on the Closing Date, the Vessel will comply in all material respects with the technical and operational specifications set forth in the LTA and will be in every way fit to perform the FLNG Services contemplated in the LTA.

Section 6.09 Intellectual Property . (a) the Transferred Subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on their business in the manner contemplated under the LTA, and (b) neither the Sellers nor the Transferred Subsidiaries have received any notice and are not otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances that would render any Intellectual Property invalid or inadequate to protect the interests in the Transferred Subsidiaries.

ARTICLE VII

PRE-CLOSING MATTERS

Section 7.01 Covenants of the Sellers Prior to the Closing . From the date of this Agreement to the Closing Date, the Sellers shall cause each of the Transferred Subsidiaries to conduct its business in the usual, regular and ordinary course in substantially the same manner as previously conducted. The Sellers shall not permit any of the Transferred Subsidiaries to enter into any contracts or other written or oral agreements prior to the Closing Date, other than such contracts and agreements as have been disclosed to Buyer prior to the date of this Agreement, without the prior consent of Buyer (such consent not to be unreasonably withheld). In addition, the Sellers shall not permit any of the Transferred Subsidiaries to take any action that would result in any of the conditions to the purchase and sale of the Units set forth in Article VIII not being satisfied. Furthermore, each Seller hereby agrees and covenants that it:

(a) shall cooperate with Buyer and use its reasonable best efforts to obtain, at or prior to the Closing Date, any consents required in respect of the transfer of the rights and benefits under the Material Agreements;

(b) shall use its reasonable best efforts to take or cause to be taken promptly all actions and to do or cause to be done all things necessary, proper and advisable to consummate and make effective as promptly as practicable the transaction contemplated by this Agreement and to cooperate with Buyer in connection with the foregoing, including using all reasonable best efforts to obtain all necessary consents, approvals and authorizations from each Governmental Authority and each other Person that are required to consummate the transaction contemplated under this Agreement;

(c) shall take or cause to be taken all necessary corporate action, steps and proceedings to approve or authorize validly and effectively the purchase and sale of the Units and the execution and delivery of this Agreement and the other agreements and documents contemplated hereby;

(d) shall not amend, alter or otherwise modify or permit any amendment, alteration or modification of any material provision of or terminate any Material Agreement prior to the Closing Date without the prior written consent of the Conflicts Committee, such consent not to be unreasonably withheld or delayed;

(e) shall not exercise, waive or permit any exercise of any rights or options contained in any of the Material Agreements, without the prior written consent of the Conflicts Committee, not to be unreasonably withheld or delayed;

(f) shall observe and perform in a timely manner, all of its covenants and obligations under the Material Agreements, if any, and in the case of a default by another party thereto, it shall forthwith advise Buyer of such default and shall, if requested by Buyer, enforce all of its rights under the Material Agreements, as applicable, in respect of such default;

(g) shall not cause or, to the extent reasonably within its control, permit any Encumbrances to attach to the Vessel other than in connection with the Hilli Facility;

(h) shall not amend any Organizational Document of any Transferred Subsidiary without the prior written consent of Buyer (such consent not to be unreasonably withheld);

(i) shall not cause or permit the issuance of any equity interests, or securities instruments convertible into equity securities, of any of the Transferred Subsidiaries;

(j) shall not cause or permit any of the Transferred Subsidiaries to incur any indebtedness, other than in connection with the Hilli Facility;

(k) shall not amend, release or adjust the Customer Credit Support (as defined in the LTA) without the prior written consent of the Conflicts Committee; and

(l) shall permit representatives of Buyer to make, prior to the Closing Date, at Buyer’s risk and expense, such searches, surveys, tests and inspections of the Vessel as Buyer may deem desirable; provided, however, that such surveys, tests or inspections shall not damage the Vessel or interfere with the activities of the Sellers or the Customer thereon and that Buyer shall furnish the Sellers with evidence that Buyer has adequate liability insurance in full force and effect.

Section 7.02 Covenant of Buyer Prior to the Closing . To the extent not completed prior to the date hereof, Buyer hereby agrees and covenants that during the period of time after the date of the Agreement and prior to the Closing Date, Buyer shall, in respect of the Units to be transferred on the Closing Date, take, or cause to be taken, all necessary limited liability company action, steps and proceedings to approve or authorize validly and effectively the purchase of the Units and the execution and delivery of this Agreement and the other agreements and documents contemplated hereby.

ARTICLE VIII

CONDITIONS OF CLOSING

Section 8.01 Conditions of the Parties . The obligation of the Sellers to sell the Units and the obligation of Buyer to purchase the Units is subject to the satisfaction (or waiver by each of the Sellers and Buyer) on or prior to the Closing Date of the following conditions:

(a) The Sellers shall have received any and all written consents, permits, approvals or authorizations of any Governmental Authority or any other Person (including, but not limited to, with respect to the Contracts) and shall have made any and all notices or declarations to or filing with any Governmental Authority or any other Person, including those related to any environmental laws or regulations, required in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereunder, including the transfer of the Units;

(b) No legal or regulatory action or proceeding shall be pending or threatened by any Governmental Authority to enjoin, restrict or prohibit the purchase and sale of the Units;

(c) The Amended Hilli Facility Documents shall have been entered into and the Hilli Facility Amendment shall have become effective;

(d) Hilli LLC will have been duly formed and the Certificate of Formation of Hilli LLC will have been filed with the Republic of the Marshall Islands Office of the Registrar of Corporations;

(e) The Sellers will have executed and delivered the Limited Liability Company Operating Agreement of Hilli LLC in substantially the form attached hereto as Exhibit II (the “ Hilli LLC Agreement ”);

(f) The Hilli Corp Share Contribution shall have occurred, and as a result, on the Closing Date, Hilli LLC will own all of the Hilli Corp Shares free and clear of any Encumbrances, including for the avoidance of doubt any shareholder loans to Hilli Corp which shall have been contributed as equity capital, other than those arising under the Hilli Facility Documents.

Section 8.02 Conditions to the Sellers’ Obligations . The obligation of the Sellers to sell the Units is subject to the satisfaction (or waiver by the Sellers) on or prior to the Closing Date of the following conditions:

(a) The representations and warranties of Buyer made in this Agreement shall be true and correct in all material respects as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects, on and as of such earlier date);

(b) Buyer shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Buyer by the Closing Date;

(c) Golar Partners shall have entered into an agreement pursuant to which it shall guarantee 50% of the indebtedness of Hilli Corp under the Hilli Facility for so long as the Hilli Facility remains in effect; and

(d) All proceedings to be taken in connection with the transactions contemplated by this Agreement and all documents incidental thereto shall be reasonably satisfactory in form and substance to the Sellers and their counsel, and the Sellers shall have received copies of all such documents and other evidence as they may reasonably request in order to establish the consummation of such transactions and the taking of all proceedings in connection therewith.

Section 8.03 Conditions to Buyer’s Obligations . The obligation of Buyer to purchase and pay for the Units is subject to the satisfaction (or waiver by Buyer) on or prior to the Closing Date of the following conditions:

(a) The LTA shall have been duly authorized, executed and delivered by all parties thereto in substantially the form furnished to Buyer as of the date hereof;

(b) The Vessel shall have passed the Acceptance Tests and satisfied the Acceptance Minimum Requirements and been delivered to and accepted by Perenco under the terms of the LTA and commenced commercial operations thereunder, and the Acceptance Date shall have occurred;

(d) The representations and warranties of the Sellers in this Agreement shall be true and correct in all material respects as of the Closing Date as though made on the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects, on and as of such earlier date);

(e) Golar GHK shall have transferred all Hilli Corp Shares owned by it to Golar;

(f) KSI Production shall have transferred all Hilli Corp Shares owned by it to Keppel;

(g) The Sellers shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by the Sellers by the Closing Date;

(h) The results of the searches, surveys, tests and inspections of the Vessel referred to in Section 7.01(l) of this Agreement are reasonably satisfactory to Buyer;

(i) Buyer shall have obtained the funds necessary to consummate the purchase of the Units, and to pay all related fees and expenses;

(j) The Tundra Put Sale Closing shall have occurred;

(k) Perenco and SNH shall have provided the Customer Credit Support, as such term is defined in the LTA, and the Customer Credit Support shall be in full force and effect;

(l) No material adverse change to the condition (financial or otherwise), assets, properties, business or prospects of the Transferred Subsidiaries, taken as a whole, shall have occurred;

(m) No Related Party Indebtedness shall be outstanding;

(n) All proceedings to be taken in connection with the transaction contemplated by this Agreement and all documents incidental thereto shall be reasonably satisfactory in form and substance to Buyer and its counsel, and Buyer shall have received copies of all such documents and other evidence as it or its counsel may reasonably request in order to establish the consummation of such transaction and the taking of all proceedings in connection therewith.

ARTICLE IX

COVENANTS OF THE SELLERS

Section 9.01 Golar Credit Support . Golar and Keppel agree that Hilli Corp shall continue to provide the Golar Credit Support (as such term is defined in the LTA) for so long as the LTA remains in effect and Keppel agrees to continue to provide its letter of indemnity dated 24 November 2015, in support of the Golar Credit Support in relation to its ownership interest in the Common Units after giving effect to the Closing, and Golar shall be responsible for the balance, and Golar agrees to continue to provide its parent company guarantee and pledged cash security pursuant to the Security Agreement of All Accounts, dated November 29, 2016, made by and between Golar and Standard Chartered Bank, London as security for the Golar Credit Support for so long as the Golar Credit Support is in effect.

Section 9.02 Golar Guarantee of Hilli Facility . Golar agrees to continue to provide its guarantee of 50% of Hilli Corp’s indebtedness under the Hilli Facility for so long as the Hilli Facility remains in effect.

Section 9.03 Provision of Service Boats . The Sellers agree to provide, at no cost to Buyer or the Transferred Subsidiaries, any service boats necessary for the provision by the Vessel of the FLNG Services, and in the event that Hilli Corp acquires service boats, the Sellers agree to maintain and operate such service boats at no cost to Buyer for so long as the LTA remains in effect. Golar, Keppel and B&V shall bear the costs of such service boats in relation to their respective Ownership Interests.

ARTICLE X

TERMINATION, AMENDMENT AND WAIVER

Section 10.01 Termination of Agreement . Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and the purchase and sale of the Units contemplated by this Agreement abandoned at any time prior to the Closing:

(a) by mutual written consent of the Sellers and Buyer;

(b) by the Sellers if any of the conditions set forth in Section 8.01 and Section 8.02 shall have become incapable of fulfillment, and shall not have been waived by the Sellers;

(c) by Buyer if any of the conditions set forth in Section 8.01 and Section 8.03 shall have become incapable of fulfillment, and shall not have been waived by Buyer; or

(d) by Buyer if the Closing has not occurred by May 1, 2018 for any reason;

provided, however, that the Party seeking termination pursuant to clause (b) or (c) is not then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement; and provided further that any action by Buyer to terminate this Agreement shall require the approval of the Conflicts Committee.

Section 10.02 Amendments and Waivers . This Agreement may not be amended except by an instrument in writing signed on behalf of each Party hereto; provided, however, that any amendment of this Agreement must be approved by the conflicts committee of the board of directors of Golar Partners (the “ Conflicts Committee ”). An instrument in writing by Buyer, on the one hand, or the Sellers, on the other hand, may waive compliance by the other with any term or provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that a waiver by Buyer of any material obligation of the Sellers must be approved by the Conflicts Committee.

ARTICLE XI

INDEMNIFICATION; REIMBURSEMENTS

Section 11.01 Indemnity by the Sellers . Following the Closing, Golar, jointly and severally, and Keppel and B&V, each severally in relation to its respective Ownership Interest, shall be liable for, and shall indemnify, defend and hold harmless Buyer, the Transferred Subsidiaries and each of their officers, directors, employees, agents and representatives (the “ Buyer Indemnitees ”) from and against:

(a) any Losses suffered or incurred by such Buyer Indemnitee by reason of, arising out of or otherwise in respect of any inaccuracy in, breach of any representation or warranty, or a failure to perform or observe fully any covenant, agreement or obligation of, the Sellers in or under this Agreement or in or under any document, instrument or agreement delivered pursuant to this Agreement by the Sellers;

(b) any fees, expenses or other payments incurred or owed by the Sellers to any brokers, financial advisors or comparable other persons retained or employed by it in connection with the transaction contemplated by this Agreement;

(c) any Losses suffered or incurred by such Buyer Indemnitee in connection with any claim for the payment of damages in relation to the Vessel for periods prior to the Closing;

(d) all liabilities for Taxes attributable to the Transferred Subsidiaries or the Vessel prior to the Closing Date;

(e) any Covered Environmental Losses, to the extent that the Sellers are notified by Buyer of any such Covered Environmental Losses within five (5) years after the Closing Date;

(f) any Losses, suffered or incurred by such Buyer Indemnitee by reason of the Acceptance Minimum Requirements (as such term is defined in the LTA) not being satisfied; and

(g) any Losses, suffered or incurred by such Buyer Indemnitee as a result of any delay or repair costs associated with the Commissioning Activities and Acceptance Tests, including as a result of delays in the Project (as such terms are defined in the LTA) and any delays in completing the process of outfitting the Vessel with all materials, personnel and equipment required to perform FLNG Services as contemplated under the LTA.

Provided, however , that in no event shall B&V or Keppel be liable to the Buyer Indemnitees under this Section 11.01 for any amount in excess of the portion of the Purchase Price received by it hereunder.

Section 11.02 Indemnity by Buyer . Following the Closing, Buyer shall indemnify the Sellers and each of their affiliates and each of their officers, directors, employees, agents and representatives (the “ Seller Indemnitees ”) against and hold them harmless from, any Losses, suffered or incurred by such Seller Indemnitee by reason of, arising out of or otherwise in respect of any inaccuracy in, breach of any representation or warranty, or a failure to perform or observe fully any covenant, agreement or obligation of, Buyer in or under this Agreement or in or under any document, instrument or agreement delivered pursuant to this Agreement by Buyer.

Section 11.03 Reimbursements .

(a) Buyer shall assist the Sellers in recovery of warranties claims related to periods prior to the Closing Date, and shall reimburse the Sellers in proportion to their respective Ownership Interests for 50% of any such amounts recovered after the Closing Date by any of the Transferred Subsidiaries under warranties claims related to periods prior to the Closing Date. In addition, Buyer shall reimburse the Sellers for (a) 50% of the amount, if any, by which Operating Expenses are less than $32.4 million per year and (b) 50% of the amount, if any, by which withholding taxes on Operating Expense payments are less than $4.2 million per year, for a period of eight years commencing on the Closing Date, up to a maximum amount of $20 million in the aggregate (the “ Buyer Reimbursement ”). Buyer shall pay to each of Golar, Keppel and B&V its proportionate share of the Buyer Reimbursement, based on its respective Ownership Interest.

(b) The Sellers shall reimburse Buyer for (a) 50% of the amount, if any, by which Operating Expenses exceed $39.5 million per year and (b) 50% of the amount, if any, by which withholding taxes on Operating Expense payments exceed $5.2 million per year, for a period of eight years commencing on the Closing Date, up to a maximum amount of $20 million in the aggregate (the “ Sellers Reimbursement ”). Golar, Keppel and B&V shall each pay to Buyer its proportionate share of the Sellers Reimbursement based on its respective Ownership Interest.

ARTICLE XII

MISCELLANEOUS

Section 12.01 Further Assurances . From time to time after the date of this Agreement, and without any further consideration, the Parties agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale, conveyances, instruments, notices, releases, acquittances and other documents, and will do all such other acts and things, all in accordance with Applicable Law, as may be necessary or appropriate (a) more fully to assure that the applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers and privileges granted by this Agreement, or which are intended to be so granted, (a) more fully and effectively to vest in the applicable Parties and their respective successors and assigns beneficial and record title to the interests assigned by this Agreement or intended so to be and (a) to more fully and effectively carry out the purposes and intent of this Agreement.

Section 12.02 Powers of Attorney .

(a) Buyer hereby constitutes and appoints each of Brian Tienzo, Osman Ilyas, Graham Robjohns, Pernille Noraas, Abigail Baltar, Roger Swan and Siu-Yee Mac (the “ Buyer Attorney-in-Fact ”) as its true and lawful attorney-in-fact with full power of substitution for it and in its name, place and stead or otherwise on behalf of Buyer and its successors and assigns, and for the benefit of Buyer Attorney-in-Fact to demand and receive from time to time the Units conveyed by this Agreement (or intended so to be) and to execute in the name of Buyer and its successors and assigns instruments of conveyance, instruments of further assurance and to give receipts and releases in respect of the same, and from time to time to institute and prosecute in the name of Buyer for the benefit of Buyer Attorney-in-Fact, any and all proceedings at law, in equity or otherwise which Buyer Attorney-in-Fact may deem proper in order to (i) collect, assert or enforce any claims, rights or titles of any kind in and to the Units, (i) defend and compromise any and all actions, suits or proceedings in respect of any of the Units, and (i) do any and all such acts and things in furtherance of this Agreement as Buyer Attorney-in-Fact shall deem advisable. Buyer hereby declares that the appointment hereby made and the powers hereby granted are coupled with an interest and are and shall be irrevocable and perpetual and shall not be terminated by any act of Buyer or its successors or assigns or by operation of law.

(b) Golar constitutes and appoints each of Brian Tienzo, Osman Ilyas, Graham Robjohns, Pernille Noraas, Abigail Baltar, Roger Swan and Siu-Yee Mac (the “ Golar Attorney-in-Fact ”) as its true and lawful attorney in fact with full power of substitution for it and in its name, place and stead or otherwise on behalf of Golar and its successors and assigns, and for the benefit of the Golar Attorney-in-Fact to demand and receive from time to time the Units conveyed by this Agreement (or intended so to be) and to execute in the name of Golar and its successors and assigns instruments of conveyance, instruments of further assurance and to give receipts and releases in respect of the same, and from time to time to institute and prosecute in the name of Golar for the benefit of the Golar Attorney-in-Fact, any and all proceedings at law, in equity or otherwise which Golar Attorney-in-Fact may deem proper in order to (i) collect, assert or enforce any claims, rights or titles of any kind in and to the Units, (i) defend and compromise any and all actions, suits or proceedings in respect of any of the Units, and (i) do any and all such acts and things in furtherance of this Agreement as the Golar Attorney-in-Fact shall deem advisable. Golar hereby declare that the appointment hereby made and the powers hereby granted are coupled with an interest and are and shall be irrevocable and perpetual and shall not be terminated by any act of Golar or its successors or assigns or by operation of law.

Section 12.03 Headings; References; Interpretation . All Article and Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All references herein to Articles and Sections shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement, respectively. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders, and the singular shall include the plural and vice versa. The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation,” “but not limited to,” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

Section 12.04 Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

Section 12.05 No Third Party Rights . Other than Article XI, the provisions of this Agreement are intended to bind the Parties as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.

Section 12.06 Counterparts . This Agreement (save for the arbitration agreement contained in Section 12.11 , which shall be governed by the laws of England and Wales) may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the Parties hereto.

Section 12.07 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, United States of America, applicable to contracts made and to be performed wholly within such jurisdiction, except to the extent that it is mandatory that the law of some other jurisdiction, wherein the Units are located, shall apply.

Section 12.08 Severability . If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any governmental body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid, and an equitable adjustment shall be made and necessary provision added so as to give effect, as nearly as possible, to the intention of the Parties as expressed in this Agreement at the time of execution of this Agreement.

Section 12.09 Integration . This Agreement, the Schedules and Exhibits hereto and the instruments referenced herein supersede all previous understandings or agreements among the Parties, whether oral or written, with respect to its subject matter hereof. This Agreement, the Schedules and Exhibits hereto and the instruments referenced herein contain the entire understanding of the Parties with respect to the subject matter hereof and thereof. No understanding, representation, promise or agreement, whether oral or written, is intended to be or shall be included in or form part of this Agreement unless it is contained in a written amendment hereto executed by the Parties hereto after the date of this Agreement.

Section 12.10 Notices . All notices, requests or consents provided for or permitted to be given pursuant to this Agreement must be in writing and must be given by depositing the same in the mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by private-courier, prepaid, or by telecopier to such party. Notice given by personal delivery or mail shall be effective upon actual receipt. Couriered notices shall be deemed delivered on the date the courier represents that delivery will occur. Notice given by telecopier shall be effective upon actual receipt if received during the recipient’s normal business hours, or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below such Party’s signature to this Agreement, or at such other address as such Party may stipulate to the other Party in the manner provided in this Section 12.10 .

Section 12.11 Survival of Representations and Warranties . The representations and warranties of the Sellers in this Agreement will survive the completion of the transactions contemplated hereby regardless of any independent investigations that Buyer may make or cause to be made, or knowledge it may have, prior to the Closing Date and will continue in full force and effect for a period of one year from the Closing Date. At the end of such period, such representations and warranties will terminate, and no claim may be brought by Buyer against any Seller thereafter in respect of such representations and warranties, except for claims that have been asserted by Buyer prior to the Closing Date. The covenants of the Sellers in this Agreement will survive the completion of the transactions contemplated hereby and will continue in full force and effect.

Section 12.12 Arbitration . The Parties acknowledge that the expeditious and equitable settlement of disputes arising under this Agreement is to their mutual advantage. To that end, the Parties agree to attempt to resolve differences of opinion and to settle all disputes through joint cooperation and consultation if possible. Any dispute, alleged breach, interpretation, challenge or disagreement whatsoever between or among any of the Parties with respect to any dispute arising out of or relating to this Agreement (or any other agreement contemplated hereby) that the Parties are unable to settle within sixty (60) days of the initial written notice of dispute, as set forth in the preceding sentence, shall be resolved by final and binding arbitration before a single arbitrator pursuant to the rules of arbitration then in force of the London Court of International Arbitration, which rules are incorporated by reference herein. The elapse of sixty (60) days shall not be a precondition to the obtaining of emergency interim relief, either via arbitration or from a court of appropriate jurisdiction.

The seat (or legal venue of ) arbitration shall be in London. Such arbitration shall be the exclusive remedy hereunder; provided that nothing contained in this Section 12.12 shall limit any party’s right to bring (i) post arbitration actions seeking to enforce an arbitration award or (ii) actions seeking injunctive or other similar relief in the event of a breach or threatened breach of any of the provisions of this Agreement (or any other agreement contemplated hereby). The decision of the arbitrator may, but need not, be entered as judgment in a court of competent jurisdiction. If this arbitration provision is for any reason held to be invalid or otherwise inapplicable to any dispute, the Parties agree that any action or proceeding brought with respect to any dispute arising under this Agreement, or to interpret or clarify any rights or obligations arising hereunder, shall be maintained solely and exclusively in the courts of England and Wales. With respect to any action or proceeding that a successful party to the arbitration may wish to bring to enforce any arbitral award or to seek injunctive or other similar relief in the event of the breach or threatened breach of this Agreement (or any other agreement contemplated hereby), each party irrevocably and unconditionally (and without limitation): (i) submits to and accepts, generally and unconditionally the non-exclusive jurisdiction of the courts of courts of England and Wales, (ii) waives any objection it may have now or in the future that such action or proceeding has been brought in an inconvenient forum, (iii) agrees that in any such action or proceeding it will not raise, rely on or claim any immunity (including, without limitation, from suit, judgment, attachment before judgment or otherwise, execution or other enforcement), (iv) waives any right of immunity which it has or its assets may have at any time, and (v) consents generally to the giving of any relief or the issue of any process in connection with any such action or proceeding including, without limitation, the making, enforcement or execution of any order or judgment against any of its property. IN ENTERING INTO THE ARBITRATION PROVISION OF THIS SECTION 12.12 , EACH PARTY TO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.

Section 12.13 Damages . EACH PARTY WAIVES ANY CLAIM IT MAY HAVE AGAINST ANY OTHER PARTY FOR ANY (I) PUNITIVE, REMOTE, OR SPECULATIVE DAMAGES, WHETHER BASED ON CONTRACT, STRICT LIABILITY, OTHER APPLICABLE LAW OR OTHERWISE, OR (II) INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES THAT WERE NOT REASONABLY FORESEEABLE, WHETHER BASED ON CONTRACT, STRICT LIABILITY, OTHER APPLICABLE LAW OR OTHERWISE AND WHETHER OR NOT ARISING FROM ANY OTHER PARTY’S SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT.

[ SIGNATURE PAGE FOLLOWS. ]

IN WITNESS HEREOF, each of the Parties hereto has caused this Agreement to be signed as of the date first above written.

GOLAR LNG LIMITED

By: /s/ Pernille Noraas

Name: Pernille Noraas

Title: Attorney-in-Fact

Address for Notice:

2nd Floor S.E. Pearman Building,

9 Par-la-Ville Road

Hamilton, HM11

Bermuda

Phone: +44 2-7 063 7900

Fax: +44 207 063 7901

Attention: The President

KS INVESTMENTS PTE. LTD.

By: /s/ Michael Chia

Name: Michael Chia

Title: Director

Address for Notice: 50 Gul Road, Singapore 629351

Phone: +65 68637734

Fax: +65 68631862

Attention: Board of Directors/Legal Department

BLACK & VEATCH INTERNATIONAL COMPANY

By: /s/ Jeff Stamm

Name: Jeff Stamm

Title: Vice President

c/o Black & Veatch Corporation

Timothy W. Triplett

General Counsel

11401 Lamar Ave

Overland Park, Kansas

Phone: (913) 458-2200

GOLAR PARTNERS OPERATING LLC

By: /s/ Graham Robjohns

Name: Graham Robjohns

Title: Attorney-in-Fact

Address for Notice:

c/o Golar Management Ltd.

13th Floor

One America Square

17 Crosswall

London EC3N 2LB

England

Phone: +44 2-7 063 7900

Fax: +44 207 063 7901

Attention: Chief Accounting Officer

SCHEDULE A

COMMON UNITS OWNED AND TO NE SOLD BY EACH SELLER



Seller	Common Units Owned Prior to Closing	Common Units to be Sold
Golar LNG Limited	2,192	1,096
KS Investments Pte. Ltd.	246	123
Black & Veatch International Company	22	11
Total	2,460	1,230

SCHEDULE B

HILLI CORP SHARES OWNED BY EACH SELLER



Seller		Hilli Corp Shares
Golar LNG Limited		1,096*
KS Investments Pte. Ltd.		123**
Black & Veatch International Company		11
Total		1,230

_____________________

*Reflects an indirect ownership interest in such Hilli Corp Shares. Hilli Corp Shares shown in table are owned of record on the date hereof by Golar GHK, a wholly-owned subsidiary of Golar LNG Energy Limited, a wholly-owned subsidiary of Golar.

**Reflects an indirect ownership interest in such Hilli Corp Shares. Hilli Corp Shares shown in table are owned of record on the date hereof by KSI Production, a wholly-owned subsidiary of Keppel.

SCHEDULE C

INSURANCE



Insurance	Sum Insured	Basic Deductible	Comments
Operational Insurance, Physical Damage	USD 1,280,000,000	USD 3,500,000	Coverage for 12 months from Acceptance Date on/around 1st April 18. Based on London Standard Platform Form or similar to be agreed
Business Interruption	USD 180,000,000	60 days	Coverage for 12 months from Acceptance Date on/around 1st April 18. Based on Loss of Producton Income Form (JR 2005/003A) or similar to be agreed
Protection and Indemnity (P&I)	USD 250,000,000 (or TBA)	USD 25,000	As per Skuld's rule for Mobile Offshore Units
Extended Contractual Liability (ECL)	As required	TBA	To cover liabilities assumed under contract as presented to Skuld
War Risks Insurance	USD 1,280,000,000	None	Entered in Norwegian War Club. Element of political risk included as per Club rules. Stationary operation within the Gulf of Guinea subject to terms to be agreed.

EXHIBIT I

THIRD LETTER AGREEMENT

[ Filed separately ]

EXHIBIT II

FORM OF LIMITED LIABILITY COMPANY
AGREEMENT OF GOLAR HILLI LLC

FORM OF AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

GOLAR HILLI LLC

A Marshall Islands Limited Liability Company

Dated as of [•], 2017

TABLE OF CONTENTS


1.	DEFINITIONS 1


1.1	Defined Terms. 1


1.2	Number and Gender. 5


2.	ORGANIZATION 5


2.1	Formation. 5


2.2	Name. 6


2.3	Purposes. 6


2.4	Registered Office; Registered Agent. 6


2.5	Principal Office. 6


2.6	Term. 6


2.7	Limited Liability of the Members. 6


2.8	LLC Certificate. 6


2.9	Tax Status. 7


2.10	Transfer of Membership Interest; Pledge of Membership Interest. 7


2.11	Right of First Refusal. 7


3.	OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS 9


3.1	Initial Capital Contributions. 9


3.2	Unit Issuances 9


3.3	Issuances of Additional Membership Interests 9


3.4	Additional Capital Contributions. 10


3.5	Liability Limited to Capital Contributions. 10


3.6	No Interest on Capital Contributions. 10


3.7	Capital Accounts. 10


3.8	Allocations. 10


4.	MANAGEMENT 11


4.1	Management. 11


4.2	Resignation of Managing Member. 11


4.3	Officers. 11


4.4	Compensation of Managing Member and Officers. 13


4.5	Indemnification. 13


4.6	Liability of Indemnitees. 14


4.7	Standards of Conduct and Modification of Duties. 15


4.8	Actions Required by Members. 16


5.	DISTRIBUTIONS 17


5.1	Reserves and Distributions. 17


5.2	Priority of Distributions. 17


6.	SERIES A SPECIAL UNITS 17


6.1	Designation. 17


6.2	Distributions. 18


6.3	Redemption. 18


6.4	Liquidation Rights. 19


6.5	Voting Rights. 19


6.6	Rank. 19


6.7	Insurance Proceeds 19


7.	SERIES B SPECIAL UNITS 20


7.1	Designation. 20


7.2	Distributions. 20


7.3	Redemption. 21


7.4	Liquidation Rights. 21


7.5	Voting Rights. 21


7.6	Rank. 21


7.7	Insurance Proceeds 21


8.	BOOKS AND RECORDS; FISCAL YEAR; BANK ACCOUNTS; ACCOUNTING PRINCIPLES; INFORMATION 22


8.1	Books and Records. 22


8.2	Fiscal Year. 22


8.3	Bank Accounts. 22


8.4	Accounting Principles. 22


8.5	Information. 22


9.	DISSOLUTION AND LIQUIDATION 23


10.	MISCELLANEOUS 23


10.1	Complete Agreement. 23


10.2	Governing Law. 23


10.3	Headings. 23


10.4	Severability. 23


10.5	No Third Party Beneficiary. 24


10.6	Amendment. 24


10.7	Arbitration. 24

Exhibit 1: Form of Common Unit LLC Certificate

Exhibit 2: Form of Series A Special Unit LLC Certificate

Exhibit 3: Form of Series B Special Unit LLC Certificate

Exhibit 4: Computation of Incremental Perenco Revenues

Exhibit 5: Computation of Revenues Less Expenses

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF GOLAR HILLI LLC

This Amended and Restated Limited Liability Company Agreement of Golar Hilli LLC, a Marshall Islands limited liability company (the “ Company ”), is made and entered into effective as of the [•] day of [•], 2018, by and among Golar LNG Limited, a Bermuda exempted company (“ Golar LNG ”), Golar Partners Operating LLC, a Marshall Islands limited liability company “ Golar Partners ”), KS Investment Pte. Ltd., a British Virgin Islands corporation (“ Keppel ”), and Black & Veatch International Company, a Missouri corporation (“ B&V ”).

RECITALS

WHEREAS , the Company was formed on [•] , 2017 pursuant to the Marshall Islands Limited Liability Company Act, pursuant to a limited liability company agreement dated as of [•] , 2017 (the “ Original Agreement ”) entered into by Golar LNG as its sole member;

WHEREAS, this amended and restated limited liability company agreement (this “ Agreement ”) amends and restates the Original Agreement;

WHEREAS, Golar LNG, Keppel and B&V respectively own 1,096, 123 and 11 shares (“ Hilli Corp Shares ”) of Golar Hilli Corporation, a Marshall Islands corporation (“ Hilli Corp ”) and the owner of the FLNG vessel Hilli Episeyo (“ Hilli FLNG ”);

WHEREAS, Golar LNG, Keppel and B&V will contribute to the Company all of their shares of Hilli Corp, in return for the issuance by the Company of Membership Interests, as provided herein, such contributions and issuances to be effective as of the Time of Closing (as defined in the Purchase Agreement);

WHEREAS, Golar Partners, Golar LNG, B&V and Keppel have entered into a Purchase and Sale Agreement, dated as of [•] , 2017 (the “ Purchase Agreement ”), providing for the sale by Golar LNG, B&V and Keppel of an aggregate of 1,230 common units, representing limited liability company interests in the Company (“ Common Units ”), to Golar Partners; and

WHEREAS, B&V, Keppel and Golar Partners will become Members of the Company effective upon the Time of Closing.

NOW, THEREFORE , the Original Agreement is amended and restated in its entirety as follows:


1.	DEFINITIONS


1.1	Defined Terms.

When used in this Agreement, the following terms shall have the meanings set forth below:

“ Acquisition Proposal ” has the meaning set forth in Section 2.11(b) of this Agreement.

“ Act ” means the Marshall Islands Limited Liability Company Act (of the Republic of the Marshall Islands Associations Law), as the same may be amended from time to time.

“ Agreement ” means this Amended and Restated Limited Liability Company Agreement, as amended, modified, supplemented or restated from to time in accordance with its terms.

“ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used in the foregoing definition, the term “ Control ” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

“ Arrears ” means, with respect to Series A Distributions or Series B Distributions, as the case may be, for any Series A Distribution Period or Series B Distribution Period, respectively, that the full cumulative Series A Distributions or Series B Distributions, as the case may be, through the most recent Series A Distribution Payment Date or Series B Distribution Date, as the case may be, have not been paid on all Series A Special Units or Series B Special Units.

“ B&V ” has the meaning set forth in the Preamble.

“ Budget ” means the budget for the Company approved or amended from time to time by the Managing Member, being initially the document in the agreed terms marked “Budget” that has been provided to all the Members on the date hereof.

“ Capital Contributions ” means the total amount of cash and/or assets which a Member contributes to the Company as capital pursuant to this Agreement.

“ Certificate of Formation ” means the Certificate of Formation filed on [•] , 2017 pursuant to the Act with the Republic of the Marshall Islands Registrar of Corporations pursuant to which the Company was formed as a Marshall Islands limited liability company.

“ Code ” means the Internal Revenue Code of 1986, as amended, and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.

“ Common Unit Holder ” means a holder of Common Units.

“ Common Units ” shall have the meaning set forth in the Recitals to this Agreement.

“ Company ” means Golar Hilli LLC, a Marshall Islands limited liability company.

“ Conflicts Committee ” means the conflicts committee of the board of directors of Golar Partners.

“ Disposition Notice ” has the meaning set forth in Section 2.11(b) of this Agreement.

“ Golar LNG ” has the meaning set forth in the Preamble to this Agreement.

“ Golar Partners ” has the meaning set forth in the Preamble to this Agreement.

“ Hilli Corp ” has the meaning set forth in the Recitals to this Agreement.

“ Hilli FLNG ” has the meaning set forth in the Recitals to this Agreement.

“ Incremental Perenco Revenues ” for any Series A Distribution Period shall be calculated in accordance with the accounting protocol attached as Exhibit 4 to this Agreement.

“ Indemnitee ” means (a) any Person who is or was a Member, (b) any Person who is or was an Affiliate of any Member, (c) any Person who is or was an Officer, or a fiduciary or trustee, of the Company, (d) any Person who is or was a member, shareholder, partner, director, officer, fiduciary or trustee of any Member or an Affiliate of any Member, (e) any Person who is or was serving at the request of the Company, any Member or any Affiliate of any Member as an officer, director, member, partner, fiduciary or trustee of another Person, provided , that such Person shall not be an Indemnitee by reason of providing, on a fee for services basis, trustee, fiduciary or custodial services, and (f) any Person the Managing Member or the Company designates as an “Indemnitee” for purposes of this Agreement.

“ Junior Securities ” has the meaning set forth in Section 6.6 of this Agreement.

“ Keppel ” has the meaning set forth in the Preamble to this Agreement.

“ LLC Certificate ” has the meaning set forth in Section 2.8 of this Agreement.

“ Managing Member ” means initially, Golar LNG, or such other Member as may become the Managing Member pursuant to the terms of this Agreement.

“ Member ” means Golar LNG (and, immediately upon the Closing, Golar Partners, B&V and Keppel) and any Transferee, and shall have the same meaning as the term “Member” under the Act.

“ Membership Interest ” means any class or series of limited liability company interest in the Company, including the Common Units and the Special Units.

“ Offer Price ” has the meaning set forth in Section 2.11(b) of this Agreement.

“ Officers ” has the meaning set forth in Section 4.3 of this Agreement.

“ Parity Securities ” has the meaning set forth in Section 6.6 of this Agreement.

“ Perenco Contract ” means the Liquefaction Tolling Agreement, dated [•] , 2017, among Perenco Cameroon SA, Societe Nationale Des Hydrocarbures, Hilli Corp and Golar Cameroon SASU.

“ Person ” means a natural person, corporation, partnership, joint venture, trust, estate, unincorporated association, limited liability company, or any other juridical entity.

“ Proposed Transferee ” has the meaning set forth in Section 2.11(b) of this Agreement.

“ Purchase Agreement ” has the meaning set forth in the Recitals to this Agreement.

“ Revenues Less Expenses ” for any Series B Distribution Period shall be calculated in accordance with the accounting protocol attached as Exhibit 5 to this Agreement.

“ ROFR Acceptance Deadline ” has the meaning set forth in Section 2.11(b) of this Agreement.

“ Sale Units ” set forth in Section 2.11(b) of this Agreement.

“ Selling Holder ” set forth in Section 2.11(b) of this Agreement.

“ Senior Securities ” has the meaning set forth in Section 6.6 of this Agreement.

“ Series A Distribution Payment Date ” means each February 15, May 15, August 15 and November 15, commencing May 15, 2018; provided, however , that if any Series A Distribution Payment Date would otherwise occur on a day that is not a Business Day, such Series A Distribution Payment Date shall instead be on the immediately succeeding Business Day.

“ Series A Distribution Period ” means (i) the period commencing on (and including), the Series A Original Issue Date and ending on (and including) March 31, 2018, and (ii) any subsequent three-month period commencing on (and including) any January 1, April 1, July 1 or October 1 and ending on (and including) the last day in March, June, September and December, respectively.

“ Series A Distribution Record Date ” has the meaning set forth in Section 6.2 of this Agreement.

“ Series A Distributions ” means, with respect to any Series A Distribution Period, 100% of any Incremental Perenco Revenues received by Hilli Corp during such Series A Distribution Period.

“ Series A Holder ” means a holder of the Series A Special Units.

“ Series A Original Issue Date ” means [•] , 2018.

“ Series A Redemption Date ” has the meaning set forth in Section 6.3 .

“ Series A Redemption Notice ” has the meaning set forth in Section 6.3 .

“ Series A Redemption Price ” has the meaning set forth in Section 6.3 .

“ Series A Redemption Payments ” means payments to be made to the Series A Holders to redeem Series A Special Units in accordance with Section 6.3 .

“ Series A Special Unit ” means a Special Unit having the designations, preferences, rights, powers and duties set forth in Section 6 .

“ Series B Distribution Payment Date ” means each February 15, May 15, August 15 and November 15, commencing May 15, 2018; provided, however , that if any Series B Distribution Payment Date would otherwise occur on a day that is not a Business Day, such Series B Distribution Payment Date shall instead be on the immediately succeeding Business Day.

“ Series B Distribution Period ” means (i) the period commencing on (and including), the Series B Original Issue Date and ending on (and including) March 31, 2018, and (ii) any subsequent three-month period commencing on (and including) any January 1, April 1, July 1 or October 1 and ending on (and including) the last day in March, June, September and December, respectively.

“ Series B Distribution Record Date ” has the meaning set forth in Section 7.2 of this Agreement.

“ Series B Distributions ” means, with respect to any Series B Distribution Period, an amount equal to 95% of Revenues Less Expenses received by Hilli Corp during such Series B Distribution Period.

“ Series B Holder ” means a holder of the Series B Special Units.

“ Series B Original Issue Date ” means [•] , 2018.

“ Series B Special Unit ” means a Special Unit having the designations, preferences, rights, powers and duties set forth in Section 7 .

“ Special Units ” means a Membership Interest, designated as a “Special Unit,” which entitles the holder thereof to a preference with respect to distributions over Common Units, including the Series A Special Units and Series B Special Units.

“ Time of Closing ” has the meaning set forth in the Purchase Agreement.

“ Transferee ” has the meaning set forth in Section 2.10(a) of this Agreement.

“ Units ” means the units representing Membership Interests in the Company and includes the Common Units and the Special Units.


1.2	Number and Gender.

As the context requires, all words used herein in the singular number shall extend to and include the plural, all words used in the plural number shall extend to and include the singular, and all words used in any gender shall extend to and include the other gender or be neutral.


2.	ORGANIZATION


2.1	Formation.

The Company was formed on [ • ] , 2017 as a Marshall Islands limited liability company by the filing of the Certificate of Formation.


2.2	Name.

The name of the Company is “Golar Hilli LLC” and all Company business shall be conducted in that name or such other names that comply with applicable law as the Managing Member may from time to time designate.


2.3	Purposes.

The purposes for which the Company is established is to engage in any lawful activity permitted by the Act.


2.4	Registered Office; Registered Agent.

The registered office of the Company required by the Act to be maintained in the Republic of the Marshall Islands shall be the office of the initial registered agent named in the Certificate of Formation or such other office as the Managing Member may designate from time to time in the manner provided by law. The registered agent of the Company required by the Act to be maintained in the Republic of the Marshall Islands shall be the initial registered agent named in the Certificate of Formation or such other person or persons as the Managing Member may designate from time to time in the manner provided by law.


2.5	Principal Office.

The principal office of the Company shall be 2 ^nd Floor, S.E. Pearman Building, 9 Par-la-Ville Road, Hamilton, HM11, Bermuda, except as may otherwise be determined by the Managing Member.


2.6	Term.

The Company commenced on the date the Certificate of Formation was accepted for filing by the Republic of the Marshall Islands Registrar of Corporations and shall have perpetual existence, unless the Company is dissolved in accordance with the Act.


2.7	Limited Liability of the Members.

In accordance with the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Members shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company, notwithstanding the Managing Member’s exercising powers of the Company or managing the business and affairs of the Company.


2.8	LLC Certificate.

The limited liability company interests in the Company shall be represented solely by Units, which Units shall be evidenced by certificates (each, an “ LLC Certificate ”). Common Units, Series A Special Units and Series B Special Units shall be evidenced by LLC Certificates substantially in the form of Exhibit 1, Exhibit 2 and Exhibit 3, respectively.


2.9	Tax Status.

The Company has elected or will timely elect to be disregarded as an entity separate from its owner for U.S. federal income tax purposes as of the date of its formation. It is the intention of the Company and the Members that the Company be treated as a partnership for U.S. federal income tax purposes as of the Closing. The Company and the Managing Member shall take all action necessary to qualify for and receive such tax treatment and neither of them shall take any action inconsistent with this Section 2.9 .


2.10	Transfer of Membership Interest; Pledge of Membership Interest.

(a) Subject to Section 2.10(b) and Section 2.11 , upon the endorsement by a Member on its LLC Certificate (or on a separate transfer power) in favor of a third party (a “ Transferee ”) and the delivery of such LLC Certificate (and such separate power, if applicable) to the Company for registration and issuance of a new LLC Certificate to such Transferee, such Member shall be deemed to have assigned and transferred all its right, title and interest in the Company and in this Agreement to such Transferee and all references in this Agreement to such Member shall be deemed to refer to such Transferee, in each case effective as of the date of such LLC Certificate delivery. Golar Partners shall become a Member upon the Closing. A Member’s right, title and interest in the Company shall not be transferred other than as provided in this Section 2.10(a) .

(b) The pledge of, or granting of a security interest, lien or other encumbrance in or against, any or all of the Membership Interest of a Member in the Company shall not cause the Member to cease to be a Member until the secured party shall have lawfully exercised its remedies under the security agreement and completed the endorsement in favor of a Transferee. Until the exercise of such remedies, the secured party shall not have the power to exercise any rights or powers of the Members.


2.11	Right of First Refusal.

(a) Each Member hereby grants to the other Members a right of first refusal on any proposed transfer to a non-Member (other than a transfer to an Affiliate) of Common Units, Series A Special Units or Series B Special Units.

(b) If a Common Unit Holder, Series A Holder or Series B Holder proposes to transfer (other than a transfer to an Affiliate) any of its Units to any non-Member pursuant to a bona fide third-party offer (an “ Acquisition Proposal ”), then such holder (the “ Selling Holder ”) shall promptly give written notice (a “ Disposition Notice ”) thereof to the other Members. The Disposition Notice shall set forth the following information in respect of the proposed transfer: the name and address of the prospective acquiror (the “ Proposed Transferee ”), the Units subject to the Acquisition Proposal (the “ Sale Units ”), the purchase price offered by such Proposed Transferee (the “ Offer Price ”) and all other material terms and conditions of the Acquisition Proposal that are then known to the other Members. To the extent the Proposed Transferee’s offer consists of consideration other than cash (or in addition to cash) the Offer Price shall be deemed equal to the amount of any such cash plus the fair market value of such non-cash consideration. Each Member will provide written notice of its decision regarding the exercise of its right of first refusal to purchase its pro rata portion of the Sale Units within 60 days of its receipt of the Disposition Notice (the “ ROFR Acceptance Deadline ”). Failure to provide such notice within such 30-day period shall be deemed to constitute a decision not to purchase the Sale Units. If any Member fails to exercise its right of first refusal during any applicable period set forth in this Section 2.11(b) , it shall be deemed to have waived its rights with respect to such proposed disposition of the Sale Units, but not with respect to any future offer of Units.

(c) If a Member chooses to exercise its right of first refusal to purchase the Sale Units under Section 2.11(b) , such Member and the Selling Holder shall enter into a purchase and sale agreement for the Sale Units which shall include the following terms:

(i) the Member will agree to deliver cash for the Offer Price (unless such Member and the Selling Holder agree that consideration will be paid by means of an interest-bearing promissory note);

(ii) the Selling Holder will represent that it has good title to the Sale Units; and

(iii) unless otherwise agreed by the Selling Holder and such Member, the closing date for the purchase of the Sale Units shall occur no later than 60 days following receipt by the Selling Holder of written notice by such Member of its intention to exercise its option to purchase the Sale Units pursuant to Section 2.11 (b) .

(d) The Selling Holder and the exercising Member shall cooperate in good faith in obtaining all necessary governmental and other third party approvals, waivers and consents required for the closing. Any such closing shall be delayed, to the extent required, until the third Business Day following the expiration of any required statutory waiting periods; provided, however, that such delay shall not exceed 90 days and, if governmental approvals and waiting periods shall not have been obtained or expired, as the case may be, by such 90 ^th day, then the Members shall be deemed to have waived their right of first refusal with respect to the Sale Units described in the Disposition Notice and thereafter neither the Selling Holder nor the Members shall have any further obligation under this Section 2.11 with respect to such Sale Units unless such Sale Units again become subject to this Section 2.11 pursuant to Section 2.11(e) .

(e) If the transfer to the Proposed Transferee is not consummated in accordance with the terms of the Acquisition Proposal within the later of (A) 90 days after the later of the ROFR Acceptance Deadline, and (B) 10 days after the satisfaction of all governmental approval or filing requirements, if any, the Acquisition Proposal shall be deemed to lapse, and the Selling Holder may not transfer any of the Sale Units described in the Disposition Notice without complying again with the provisions of this Section 2.11 if and to the extent then applicable.


3.	OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS


3.1	Initial Capital Contributions.

On or about the date of the Company’s formation, Golar LNG made an initial capital contribution to the Company, and upon the Company’s receipt and in consideration thereof, a certificate evidencing 100% of the limited liability company interests of the Company (the “ Initial Interests ”) was issued to Golar LNG. By execution of this Agreement, such certificate and the Initial Interests represented thereby are hereby cancelled.


3.2	Unit Issuances

The Membership Interests in the Company are represented by three classes of Units: the Common Units, the Series A Special Units and the Series B Special Units, each of which shall have the rights and obligations set forth in this Agreement. Upon the effectiveness of this Agreement:

(a) the Company shall issue to Golar LNG, in exchange for its contribution to the Company of 1,096 Hilli Corp Shares, 2,192 Common Units, (B) 2,192 Series A Special Units and (C) 2,192 Series B Special Units;

(b) the Company shall issue to Keppel, in exchange for its contribution to the Company of 123 Hilli Corp Shares, (A) 246 Common Units, (B) 246 Series A Special Units and (C) 246 Series B Special Units; and

(c) the Company shall issue to B&V, in exchange for its contribution to the Company of 11 Hilli Corp Shares, (A) 22 Common Units, (B) 22 Series A Special Units and (C) 22 Series B Special Units.


3.3	Issuances of Additional Membership Interests

(a) Subject to Section 4.8 , the Company may issue additional Units for any Company purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as the Managing Member shall determine, without the approval of any Members.

(b) Each additional Unit authorized to be issued by the Company pursuant to Section 3.3 may be issued in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties, as shall be fixed by the Managing Member, including (i) the right to share in Company distributions; (ii) the rights upon dissolution and liquidation of the Company; (iii) whether, and the terms and conditions upon which, the Company may or shall be required to redeem the Units (including sinking fund provisions); (iv) whether such Unit is issued with the privilege of conversion or exchange and, if so, the terms and conditions of such conversion or exchange; (v) the terms and conditions upon which each Unit will be issued, evidenced by certificates and assigned or transferred; (vi) the method for determining the percentage interest in the Company represented by such Units; and (vii) the right, if any, of each such Unit to vote on Company matters, including matters relating to the relative rights, preferences and privileges of such Membership Interests.

(c) The Managing Member shall take all actions that it determines to be necessary or appropriate in connection with each issuance of Units pursuant to this Section 3.3 and the admission of such additional Members in the books and records of the Company. The Managing Member shall determine the relative rights, powers and duties of the holders of the Units or other Membership Interests being so issued. The Managing Member shall do all things necessary to comply with the Marshall Islands Act and is authorized and directed to do all things that it determines to be necessary or appropriate in connection with any future issuance of limited liability company interests, including compliance with any statute, rule, regulation or guideline of any federal, state or other governmental agency.


3.4	Additional Capital Contributions.

With the Managing Member’s consent, each Member may contribute such additional sums and/or assets, if any, as the Member and the Managing Member may determine.


3.5	Liability Limited to Capital Contributions.

No Member shall have any obligation to contribute money to the Company or any personal liability with respect to any liability or obligation of the Company.


3.6	No Interest on Capital Contributions.

Except as otherwise expressly provided herein, no Member shall receive any interest on its Capital Contributions to the Company.


3.7	Capital Accounts.

From and after the time at which the Company is treated as a partnership for U.S. federal income tax purposes, the Company shall maintain a capital account for each of the Members in accordance with the regulations issued pursuant to Section 704 of the Code and as determined by the Managing Member as consistent therewith.


3.8	Allocations.

For U.S. federal income tax purposes, from and after the time at which the Company is treated as a partnership for U.S. federal income tax purposes, each item of income, gain, loss, deduction and credit of the Company shall be allocated among the classes of Members taking into consideration any distributions paid pursuant to Section 5 and, within a class of Members, on a pro rata basis based on the Members’ percentage interest of the total Units in that class, except that the Managing Member shall have the authority to make such other allocations as are necessary and appropriate to comply with Section 704 of the Code and the regulations issued pursuant thereto.


4.	MANAGEMENT


4.1	Management.

The management of the Company shall be vested in the Managing Member, who shall have all authority, rights and powers in the management of the Company to do any and all acts and things necessary, proper, appropriate, advisable, incidental or convenient to effectuate or further the purposes of the Company as described in this Agreement, subject to Section 4.8 . Any action taken by the Managing Member on behalf of the Company in accordance with this Agreement shall constitute the act of and shall serve to bind the Company. Persons dealing with the Company are entitled to rely conclusively on the power and authority of the Managing Member as set forth in this Agreement. The Managing Member shall have all rights and powers of a manager under the Act. Any matter requiring the consent or approval of the Managing Member pursuant to this Agreement may be taken without a meeting, without prior notice and without a vote, by written consent, setting forth such consent or approval and signed by the Managing Member. No other Member of the Company shall have any authority or right to act on behalf of or bind the Company, unless otherwise provided herein or unless specifically authorized by the Managing Member pursuant to a resolution expressly authorizing such action that is duly adopted by the Managing Member.


4.2	Resignation of Managing Member.

The Managing Member may not voluntarily resign, unless otherwise consented to by all of the Members. Upon such resignation, the holders of at least a majority of the Common Units and the holders of at least a majority of the Series B Special Units shall appoint another Person (who may be a newly admitted Member) to manage the operations of the Company. The resignation of the Managing Member shall not affect its rights as a Member and shall not constitute a withdrawal of a Member.


4.3	Officers.

The Managing Member may, from time to time as it deems advisable, select natural persons and designate them as officers of the Company (the “Officers”) and assign titles (including, without limitation, President, Vice President, Secretary or Treasurer) to any such person. Unless the Managing Member determines otherwise or as otherwise provided below, if the title is one that is customary under the Marshall Islands Business Corporation Act, the assignment of such title shall constitute the delegation to such person of the power, authority and duties as is customary for each such position if it were in a corporation. Any person may hold any number of offices. The Managing Member may delegate to any Officer any of the Managing Member’s powers under this Agreement, including, without limitation, the power to bind the Company; provided that any delegation pursuant to this Section 4.3 may be revoked by the Managing Member at any time. Officers shall be appointed pursuant to this Agreement or from time to time by the Managing Member, and each such Officer shall hold office until a successor is appointed by the Managing Member or until such Officer’s earlier death, resignation or removal by the Managing Member. The Managing Member may remove an Officer, with or without cause, at any time.

(a) President . The President, if any, shall be the chief executive officer of the Company, shall preside at all meetings of the Members, shall be responsible for the general and active management of the business of the Company, and shall see that all orders and resolutions of the Managing Member and the Members are carried into effect. The President or any other Officer authorized by the President or the Managing Member shall execute all bonds, mortgages and other contracts, except: (i) where required or permitted by law or this Agreement to be otherwise signed and executed, and (ii) where signing and execution thereof shall be expressly delegated by the Managing Member to some other Officer or agent of the Company.

(b) Vice President . In the absence of the President or in the event of the President’s inability to act, the Vice President, if any (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Managing Member, or in the absence of any designation, then in the order of their election), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents, if any, shall perform such other duties and have such other powers as the Managing Member may from time to time prescribe.

(c) Secretary and Assistant Secretary . If the Managing Member selects and designates a Secretary, (i) the Secretary shall be responsible for filing legal documents and maintaining records for the Company; (ii) the Secretary shall attend all meetings of the Members and record all the proceedings of the meetings of the Company and of the Managing Member or the Members in a record to be kept for that purpose and shall perform like duties for the standing committees when required; (iii) the Secretary shall give, or shall cause to be given, notice of all meetings of the Members, if any, and special meetings of the Members, and shall perform such other duties as may be prescribed by the Member or the President, under whose supervision the Secretary shall serve. The Assistant Secretary (if any), or if there be more than one, the Assistant Secretaries in the order determined by the Managing Member (or if there be no such determination, then in order of their election), shall, in the absence of the Secretary or in the event of the Secretary’s inability to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Managing Member may from time to time prescribe.

(d) Treasurer and Assistant Treasurer . If the Managing Member selects and designates a Treasurer, (i) the Treasurer shall have the custody of the Company funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Managing Member; (ii) the Treasurer shall disburse the funds of the Company as may be ordered by the Managing Member, taking proper vouchers for such disbursements, and shall render to the President and to the Managing Member, at its regular meetings or when the Managing Member so requires, an account of all of the Treasurer’s transactions and of the financial condition of the Company. The Assistant Treasurer (if any), or if there shall be more than one, the Assistant Treasurers in the order determined by the Managing Member (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the Treasurer’s inability to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Managing Member may from time to time prescribe.


4.4	Compensation of Managing Member and Officers.

(a) The Managing Member shall not receive compensation for its services to the Company.

(b) The Officers shall serve with or without such compensation for their services to the Company as the Managing Member shall determine.


4.5	Indemnification.

(a) To the fullest extent permitted by law but subject to the limitations expressly provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the Company from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee; provided , that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 4.5 , the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful. Any indemnification pursuant to this Section 4.5 shall be made only out of the assets of the Company, it being agreed that the Members shall not be personally liable for such indemnification and shall have no obligation to contribute or loan any monies or property to the Company to enable it to effectuate such indemnification.

(b) To the fullest extent permitted by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to this Section 4.5 in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to a determination that the Indemnitee is not entitled to be indemnified upon receipt by the Company of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 4.5 .

(c) The indemnification provided by this Section 4.5 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, as a matter of law or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

(d) The Company may purchase and maintain (or reimburse any Member or its Affiliates for the cost of) insurance, on behalf of any Member, its Affiliates and such other Persons as the Managing Member shall determine, against any liability that may be asserted against, or expense that may be incurred by, such Person in connection with the Company’s activities or such Person’s activities on behalf of the Company, regardless of whether the Company would have the power to indemnify such Person against such liability under the provisions of this Agreement.

(e) For purposes of this Section 4.5 , the Company shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Company also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of Section 4.5(a) ; and action taken or omitted by it with respect to any employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in the best interests of the Company.

(f) In no event may an Indemnitee subject any of the Members to personal liability by reason of the indemnification provisions set forth in this Agreement.

(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 4.5 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

(h) The provisions of this Section 4.5 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

(i) No amendment, modification or repeal of this Section 4.5 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Company, nor the obligations of the Company to indemnify any such Indemnitee under and in accordance with the provisions of this Section 4.5 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.


4.6	Liability of Indemnitees.

(a) No Indemnitee shall be personally liable for the debts and obligations of the Company.

(b) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Company for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was criminal.

(c) Any amendment, modification or repeal of this Section 4.6 or Section 4.7 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability of the Indemnitees under this Section 4.6 or Section 4.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.


4.7	Standards of Conduct and Modification of Duties.

(a) Whenever the Managing Member makes a determination or takes or declines to take any other action, or any of its Affiliates causes it to do so, in its capacity as the managing member of the Company as opposed to in its individual capacity, whether under this Agreement or any other agreement contemplated hereby or otherwise, then, unless another express standard is provided for in this Agreement, the Managing Member, or such Affiliates causing it to do so, shall make such determination or take or decline to take such other action in good faith and shall not be subject to any other or different standards imposed by this Agreement any other agreement contemplated hereby or under the Act or any other law, rule or regulation or at equity. In order for a determination or other action to be in “good faith” for purposes of this Agreement, the Person or Persons making such determination or taking or declining to take such other action must reasonably believe that the determination or other action is in the best interests of the Company, unless the context otherwise requires.

(b) Whenever the Managing Member makes a determination or takes or declines to take any other action, or any of its Affiliates causes it to do so, in its individual capacity as opposed to in its capacity as the managing member of the Company, whether under this Agreement or any other agreement contemplated hereby or otherwise, then the Managing Member, or such Affiliates causing it to do so, are entitled to make such determination or to take or decline to take such other action free of any duty (including any fiduciary duty) or obligation whatsoever to the Company or any Member or any other Person bound by this Agreement, and, to the fullest extent permitted by law, the Managing Member, or such Affiliates causing it to do so, shall not be required to act in good faith or pursuant to any other standard imposed by this Agreement, any other agreement contemplated hereby or under the Act or any other law, rule or regulation or at equity. For the avoidance of doubt, whenever the Managing Member votes or transfers its Units, if any, to the extent permitted under this Agreement, or refrains from voting or transferring its Units, as appropriate, it shall be acting in its individual capacity.

(c) Notwithstanding anything to the contrary in this Agreement, the Managing Member and its Affiliates shall have no duty or obligation, express or implied, to (i) approve the sale or other disposition of any asset of the Company or any of its subsidiaries or (ii) permit any of the Company or its subsidiaries to use any facilities or assets of the Managing Member and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use. Any determination by the Managing Member or any of its Affiliates to enter into such contracts shall, in each case, be at their option.

(d) Except as expressly set forth in this Agreement, neither the Managing Member or any other Indemnitee shall have any duties or liabilities, including fiduciary duties, to the Company or any Member and the provisions of this Agreement, to the extent that they restrict, eliminate or otherwise modify the duties and liabilities, including fiduciary duties, of the Managing Member or any other Indemnitee otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of the Managing Member or such other Indemnitee.


4.8	Actions Required by Members.

(a) The following actions may only be taken with the approval or consent of the holders of at least 95% of each of the Series A Special Units, Series B Special Units and Common Units:

(i) effecting any merger or consolidation involving the Company or Hilli Corp;

(ii) effecting any sale or exchange of all or substantially all of the Company’s assets or the assets of Hilli Corp, including Hilli FLNG;

(iii) dissolving or liquidating the Company or Hilli Corp; and

(iv) effecting a transfer of any of the Company’s shares of Hilli Corp;

(b) The following actions may only be taken with the approval or consent of the holders of at least a majority of the Series A Special Units, the holders of at least a majority of the Series B Special Units and the holders of at least a majority of the Common Units:

(i) creating or causing to exist any consensual restriction on the ability of the Company or Hilli Corp to make distributions, pay any indebtedness, make loans or advances or transfer assets to its Members or their subsidiaries;

(ii) settling or compromising any claim, dispute or litigation directly against, or otherwise relating to indemnification by the Company of, any of the officers of the Company or any Member;

(iii) causing the Company to incur indebtedness in excess of $50 million or issue Senior Securities or Parity Securities;

(iv) causing Hilli Corp to incur additional indebtedness in excess of $50 million or to issue equity securities;

(v) amending the Perenco Contract in any material manner; or

(vi) amending the existing financing and sale and leaseback arrangement for the Hilli FLNG in any material manner.

(c) The approval or consent of the holders of at least 95% of the Series A Special Units is required to amend any provision of this Agreement that would adversely affect the Series A Special Units.

(d) the approval or consent of the holders of at least 95% of the Series B Special Units is required to amend any provision of this Agreement that would adversely affect the Series B Special Units.

(e) the approval or consent of the holders of at least 95% of the Common Units is required to amend any provision of this Agreement that would adversely affect the Common Units.

(f) The approval or consent of the holders of at least a majority of the Series B Special Units and the holders of at least a majority of the Common Units is required to cause Hilli Corp to enter into new commercial liquefaction services agreements utilizing Hilli FLNG.


5.	DISTRIBUTIONS


5.1	Reserves and Distributions.

Within 60 days after the end of each quarter, the Managing Member shall review the Company’s accounts and determine the amount of the Company’s available cash and appropriate reserves (including cash reserves for future maintenance capital expenditures, working capital and other matters), and the Company shall make a distribution to the Members of the available cash, subject to the reserves pursuant to Section 5.2 . The Company may make such additional cash distributions as the Managing Member may determine and without being limited to current or accumulated income or gains from any Company funds, including, without limitation, Company revenues, capital contributions or borrowed funds; provided , that no such distribution shall be made if, after giving effect thereto, the liabilities of the Company exceed the fair market value of the assets of the Company. In its sole discretion, the Managing Member may, subject to the foregoing proviso, also distribute to the Members other Company property or other securities of the Company or other entities.


5.2	Priority of Distributions.

The Company shall make distributions to the Members when, as and if declared by the Managing Member pursuant to Section 5.1 ; provided however that no distributions may be made on the Common Units on any Distribution Date unless (i) Series A Distributions for the most recently ended Series A Distribution Period and any accumulated Series A Distributions in Arrears for any past Series A Distribution Period have been or contemporaneously are being paid or provided for and (ii) Series B Distributions for the most recently ended Series B Distribution Period and any accumulated Series B Distributions in Arrears for any past Series B Distribution Period have been or contemporaneously are being paid or provided for. The Series A Special Units and the Series B Special Units shall be treated on a pari passu basis as to the right to receive distributions.


6.	SERIES A SPECIAL UNITS


6.1	Designation.

The Company hereby designates and creates a series of Membership Interests to be designated as “Series A Special Units,” and fixes the preferences rights, powers and duties of the holders of the Series A Special Units as set forth in this Section 6 . The Series A Special Units shall initially be represented by certificates issued in the name of Golar LNG, Keppel and B&V.


6.2	Distributions.

(a) Distributions on the Series A Special Units shall be cumulative and shall accrue in each Series A Distribution Period from and including the first day of the Series A Distribution Period to and including the earlier of (i) the last day of such Series A Distribution Period and (ii) the date the Company pays the Series A Distribution or redeems the Series A Special Units in full in accordance with Section 6.3 below, whether or not such Series A Distributions shall have been declared. The Series A Holders shall be entitled to receive Series A Distributions from time to time out of any assets of the Company legally available for the payment of distributions when, as, and if declared by the Managing Member. Distributions, to the extent declared by the Managing Member to be paid by the Company in accordance with this Section 6.2 , shall be paid for each Series A Distribution Period on each Series A Distribution Payment Date. All Series A Distributions payable by the Company pursuant to this Section 6.2 shall be payable without regard to income of the Company.

(b) Not later than 5:00 p.m., New York City time, on each Series A Distribution Payment Date, the Company shall pay those Series A Distributions, if any, that shall have been declared by the Managing Member to Series A Holders on the record date for the applicable Series A Distribution. The record date (the “ Series A Distribution Record Date ”) for any Series A Distribution payment shall be the fifth Business Day immediately preceding the applicable Series A Distribution Payment Date, except that in the case of payments of Series A Distributions in Arrears, the Series A Distribution Record Date with respect to a Series A Distribution Payment Date shall be such date as may be designated by the Managing Member. No distribution shall be declared or paid or set apart for payment on any Common Units unless full cumulative Series A Distributions have been or contemporaneously are being paid or provided for on all outstanding Series A Special Units through the most recent respective Series A Distribution Payment Date. Accumulated Series A Distributions in Arrears for any past Series A Distribution Period may be declared by the Managing Member and paid on any date fixed by the Managing Member, whether or not a Series A Distribution Payment Date, to the Series A Holders on the record date for such payment. Subject to Section 6.3 and Section 6.7 , Series A Holders shall not be entitled to any distribution in excess of full cumulative Series A distributions. No interest or sum of money in lieu of interest shall be payable in respect of any distribution payment which may be in arrears on the Series A Special Units.


6.3	Redemption.

The Company shall have the right, at any time after the Perenco Contract has been terminated, to redeem the Series A Special Units in whole from any source of funds legally available for such purpose. Any such redemption shall occur on a date set by the Managing Member (the “ Series A Redemption Date ”). The Company shall effect any such redemption by paying cash to the Series A Holders in an aggregate amount equal to $1.00 plus all accumulated and unpaid Series A Distributions (whether or not such Series A Distributions have been declared) to the Series A Redemption Date (the “ Series A Redemption Price ”). The Company shall give notice to the Series A Holders of any redemption not less than 30 days prior to the scheduled Series A Redemption Date. Upon payment of the Series A Redemption Price to the Series A Holders, the Series A Special Units shall be cancelled by the Company. None of the Company, the Managing Member or any Affiliate of the Managing Member shall be permitted to redeem, repurchase or otherwise acquire any Common Units or any other Junior Securities unless full cumulative distributions on the Series A Special Units, the Series B Special Units and any Parity Securities for all prior and the then ending Series A Distribution Periods and Series B Distribution Periods shall have been paid or declared and set aside for payment.


6.4	Liquidation Rights.

Upon the occurrence of any dissolution or liquidation of the Company, the Series A Holders shall be entitled to receive out of the assets of the Company or proceeds thereof legally available for distribution to the Members, (i) after satisfaction of all liabilities, if any, to creditors of the Company, (ii) concurrently with any applicable distributions of such assets or proceeds being made to or set aside for holders of any Series B Special Units then outstanding and (iii) before any distribution of such assets or proceeds is made to or set aside for the Common Unit Holders, a liquidating distribution in an amount equal to any unpaid Series A Distributions to the date of dissolution or liquidation. Series A Holders shall not be entitled to any other amounts from the Company, in their capacity as Series A Holders, after they have received such Series A Distributions.


6.5	Voting Rights.

Notwithstanding anything to the contrary in this Agreement, the Series A Special Units shall have no voting rights except as set forth in Section 4.8 or as otherwise provided by the Act.


6.6	Rank.

The Series A Special Units shall be deemed to rank:

(a) Senior to (i) the Common Units and (ii) any other class or series of Membership Interests established after the Series A Original Issue Date by the Managing Member, the terms of which class or series do not expressly provide that it is made senior to or on parity with the Series A Special Units or Series B Special Units as to current distributions (collectively referred to with the Common Units as “ Junior Securities ”);

(b) On a parity with the Series B Special Units and any other class or series of Membership Interests established after the Series A Original Issue Date by the Managing Member, the terms of which class or series are not expressly subordinated or senior to the Series A Special Units and Series B Special Units as to current distributions (collectively referred to with the Series B Special Units as “ Parity Securities ”); and

(c) Junior to any class or series of Membership Interests established after the Series A Original Issue Date by the Managing Member, the terms of which class or series expressly provide that it ranks senior to the Series A Special Units as to current distributions (collectively referred to as “ Senior Securities ”).


6.7	Insurance Proceeds

If the Company receives insurance proceeds resulting from damage to or loss of the Hilli FLNG (“ Insurance Proceeds ”) the Series A Holders shall be entitled to receive a payment of a portion of such proceeds (an “ Insurance Proceeds Payment ”). The Company and the Series A Holders shall negotiate in good faith to determine the amount of the Insurance Proceeds Payment payable to the Series A Holders. In determining this amount, the parties shall consider, among other things, (i) the then-recent history of Incremental Perenco Revenues, (ii) the remaining term under the Perenco Contract and reasonable estimates for future Incremental Perenco Revenues, (iii) the then-current price of Brent Crude and reasonable estimates of future Brent Crude prices and (iv) Series A Distributions paid for all prior Series A Distribution Periods. The Insurance Proceeds Payment shall be due and payable by the Company to the Series A Holders within 90 days following the Company’s receipt of Insurance Proceeds.


7.	SERIES B SPECIAL UNITS


7.1	Designation.

The Company hereby designates and creates a series of Membership Interests to be designated as “Series B Special Units,” and fixes the preferences rights, powers and duties of the holders of the Series B Special Units as set forth in this Section 7 . The Series B Special Units shall initially be represented by certificates issued in the name of Golar LNG, Keppel and B&V.


7.2	Distributions.

(a) Distributions on the Series B Special Units shall be cumulative and shall accrue in each Series B Distribution Period from and including the first day of the Series B Distribution Period to and including the earlier of (i) the last day of such Series B Distribution Period and (ii) the date the Company pays the Series B Distributions in full, whether or not such Series B Distributions shall have been declared. The Series B Holders shall be entitled to receive Series B Distributions from time to time out of any assets of the Company legally available for the payment of distributions when, as, and if declared by the Managing Member. Distributions, to the extent declared by the Managing Member to be paid by the Company in accordance with this Section 7.2 , shall be paid quarterly on each Series B Distribution Payment Date. All Series B Distributions payable by the Company pursuant to this Section 6.2 shall be payable without regarding to income of the Company.

(b) Not later than 5:00 p.m., New York City time, on each Series B Distribution Payment Date, the Company shall pay those Series B Distributions, if any, that shall have been declared by the Managing Member to Series B Holders on the record date for the applicable Series B Distribution. The record date (the “ Series B Distribution Record Date ”) for any Series B Distribution payment shall be the fifth Business Day immediately preceding the applicable Series B Distribution Payment Date, except that in the case of payments of Series B Distributions in Arrears, the Series B Distribution Record Date with respect to a Series B Distribution Payment Date shall be such date as may be designated by the Managing Member. No distribution shall be declared or paid or set apart for payment on any Common Units unless full cumulative Series B Distributions have been or contemporaneously are being paid or provided for on all outstanding Series B Special Units through the most recent respective Series B Distribution Payment Date. Accumulated Series B Distributions in Arrears for any past Series B Distribution Period may be declared by the Managing Member and paid on any date fixed by the Managing Member, whether or not a Series B Distribution Payment Date, to the Series B Holders on the record date for such payment. Subject to Section 7.7 , Series B Holders shall not be entitled to any distribution in excess of full cumulative Series B Distributions. No interest or sum of money in lieu of interest shall be payable in respect of any distribution payment which may be in arrears on the Series B Special Units.


7.3	Redemption.

The Series B Special Units shall not be subject to redemption.


7.4	Liquidation Rights.

Upon the occurrence of any dissolution or liquidation of the Company, the Series B Holders shall be entitled to receive out of the assets of the Company or proceeds thereof legally available for distribution to the Members, (i) after satisfaction of all liabilities, if any, to creditors of the Company, (ii) concurrently with any applicable distributions of such assets or proceeds being made to or set aside for holders of any Series A Special Units then outstanding and (iii) before any distribution of such assets or proceeds is made to or set aside for the Common Unit Holders, a liquidating distribution in an amount equal to any unpaid Series B Distributions to the date of dissolution or liquidation. Series B Holders shall not be entitled to any other amounts from the Company, in their capacity as Series B Holders, after they have received such Series B Distributions.


7.5	Voting Rights.

Notwithstanding anything to the contrary in this Agreement, the Series B Special Units shall have no voting rights except as set forth in Section 4.8 or as otherwise provided by the Act.


7.6	Rank.

The Series B Special Units shall be deemed to rank:

(a) Senior to (i) the Common Units and (ii) any other Junior Securities;

(b) On a parity with the Series A Special Units and any other Parity Securities; and


7.7	Insurance Proceeds

If the Company receives Insurance Proceeds the Series B Holders shall be entitled to receive an Insurance Proceeds Payment. The Company and the Series B Holders shall negotiate in good faith to determine the amount of the Insurance Proceeds Payment payable to the Series B Holders. In determining this amount, the parties shall consider (i) the then-recent history of Revenues Less Expenses, (ii) the Hilli FLNG’s then-current contracted production capacity and reasonable estimates of future contracted production capacity of the Hilli FLNG and (iii) Series B Distributions actually paid for all prior Series B Distribution Periods. The Insurance Proceeds Payment shall be due and payable by the Company to the Series B Holders within 90 days following the Company’s receipt of Insurance Proceeds.


8.	BOOKS AND RECORDS; FISCAL YEAR; BANK ACCOUNTS; ACCOUNTING PRINCIPLES; INFORMATION


8.1	Books and Records.

The books and records of the Company shall, at the cost and expense of the Company, be kept at the principal office of the Company or at such other location as the Managing Member may from time to time determine provided such location is in the United Kingdom, but in no circumstances shall any register of members be brought into the United Kingdom.


8.2	Fiscal Year.

Unless otherwise determined by the Managing Member, the Company’s books and records shall be kept on a December 31 calendar year basis and shall reflect all Company transactions and be appropriate and adequate for conducting the Company’s affairs.


8.3	Bank Accounts.

All funds of the Company will be deposited in its name in an account or accounts maintained with such bank or banks selected by the Managing Member. Checks shall be drawn upon the Company account or accounts only for the purposes of the Company and may be signed by such persons as may be designated by the Managing Member.


8.4	Accounting Principles.

The Company shall prepare its financial statements in accordance with US GAAP.


8.5	Information.

(a) Subject to Section 8.1, a Member may, at its own expense, at all reasonable times, inspect and make copies of all books, records, accounts, agreements and other documents relating to the affairs of the Company.

(b) Within 90 days after the end of each quarter the Company shall furnish the Members with (i) unaudited statements of profit or loss and balance sheets of the Company, (ii) a statement of actual expenses of the Company compared to the applicable Budget and (iii) a cash flow forecast for the next quarter.

(c) To the extent the Managing Member elects to have the books and records of the Company audited, the Company shall furnish the Members with such audited financial statements promptly after the audited financial statements have been received by the Company.

(d) No more frequently than once in any calendar year and provided that no other Member has conducted an audit of the Company in that calendar year in respect of which each other Member may rely on the contents and conclusions contained in the relevant audit report, a Member who holds at least a 5% of any class of Membership Interests in the Company may, by providing written notification to the Company, request an independent audit of the Company. The Company shall, subject to the requesting Member bearing all costs of such audit, provide such information and access as the independent auditors may reasonably require so that the audit report may be completed within 180 days of such written request.

(e) If a Member undertakes an audit pursuant to Section 8.5(d), that Member shall ensure that each other Member is notified that an audit is being undertaken at its request and shall at the written request of a Member, provide such Member with a copy of the audit report and shall direct that the auditor accepts that the Member receiving a copy of the report may rely on its contents and conclusions.


9.	DISSOLUTION AND LIQUIDATION

The Company shall be dissolved, and its affairs shall be wound up, upon the expiration of its term as provided in Section 2.6 . Upon such dissolution or liquidation, any assets remaining after payment of the Company’s debts and satisfaction of the requirements imposed under Section 6.4 and Section 7.4 shall be distributed to the Common Unit Holders on a pro rata basis based on each such holder’s percentage interest ownership of the total Common Units.


10.	MISCELLANEOUS


10.1	Complete Agreement.

This Agreement and the exhibits hereto constitute the complete and exclusive statement of the agreement regarding the operation of the Company and replace and supersede all prior agreements regarding the operation of the Company.


10.2	Governing Law.

This Agreement and the rights of the parties hereunder (save for the arbitration agreement contained in Section 10.7 , which shall be governed by the laws of England and Wales) will be governed by, interpreted, and enforced in accordance with the laws of the Republic of the Marshall Islands, without giving regard to principles of conflicts of law.


10.3	Headings.

All headings herein are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement.


10.4	Severability.

If any provision of this Agreement is held to be illegal, invalid or unenforceable under the present or future laws effective during the term of this Agreement, such provision will be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.


10.5	No Third Party Beneficiary.

This Agreement is made solely and specifically for the benefit of the Members and their successors and Transferees and no other Persons shall have any rights, interest or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise.


10.6	Amendment.

All amendments to this Agreement must be in writing and signed by the Members. To the extent that Golar Partners agrees to an amendment to this Agreement, such amendment must be approved by the Conflicts Committee.


10.7	Arbitration.

The Members acknowledge that the expeditious and equitable settlement of disputes arising under this Agreement is to their mutual advantage. To that end, the Members agree to attempt to resolve differences of opinion and to settle all disputes through joint cooperation and consultation if possible. Any dispute, alleged breach, interpretation, challenge or disagreement whatsoever between or among any of the parties hereto with respect to any dispute arising out of or relating to this Agreement (or any other agreement contemplated hereby) that the Members are unable to settle within sixty (60) days of the initial written notice of dispute, as set forth in the preceding sentence, shall be resolved by final and binding arbitration before a single arbitrator pursuant to the rules of arbitration then in force of the London Court of International Arbitration, which rules are incorporated by reference herein. The elapse of sixty (60) days shall not be a precondition to the obtaining of emergency interim relief, either via arbitration or from a court of appropriate jurisdiction.

The seat (or legal venue) of arbitration shall be London. Such arbitration shall be the exclusive remedy hereunder; provided that nothing contained in this Section 10.7 shall limit any party’s right to bring (i) post arbitration actions seeking to enforce an arbitration award or (ii) actions seeking injunctive or other similar relief in the event of a breach or threatened breach of any of the provisions of this Agreement (or any other agreement contemplated hereby). The decision of the arbitrator may, but need not, be entered as judgment in a court of competent jurisdiction. If this arbitration provision is for any reason held to be invalid or otherwise inapplicable to any dispute, the Members agree that any action or proceeding brought with respect to any dispute arising under this Agreement, or to interpret or clarify any rights or obligations arising hereunder, shall be maintained solely and exclusively in the courts of England and Wales. With respect to any action or proceeding that a successful party to the arbitration may wish to bring to enforce any arbitral award or to seek injunctive or other similar relief in the event of the breach or threatened breach of this Agreement (or any other agreement contemplated hereby), each party irrevocably and unconditionally (and without limitation): (i) submits to and accepts, generally and unconditionally the non-exclusive jurisdiction of the courts of England and Wales, (ii) waives any objection it may have now or in the future that such action or proceeding has been brought in an inconvenient forum, (iii) agrees that in any such action or proceeding it will not raise, rely on or claim any immunity (including, without limitation, from suit, judgment, attachment before judgment or otherwise, execution or other enforcement), (iv) waives any right of immunity which it has or its assets may have at any time, and (v) consents generally to the giving of any relief or the issue of any process in connection with any such action or proceeding including, without limitation, the making, enforcement or execution of any order or judgment against any of its property. IN ENTERING INTO THE ARBITRATION PROVISION OF THIS SECTION 10.7 , EACH PARTY TO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.

[Signature Page follows]

WHEREFORE, this Agreement has been executed by a duly authorized representative of each of the Members as of the date first set forth above.

Member:

GOLAR LNG LIMITED

By:

Name:

Title:

GOLAR PARTNERS OPERATING LLC

By:

Name:

Title:

KSI INVESTMENT PTE. LTD.

By:

Name:

Title:

BLACK & VEATCH INTERNATIONAL CORPORATION

By:

Name:

Title:

EXHIBIT 1

CERTIFICATE OF LIMITED LIABILITY COMPANY INTEREST

GOLAR HILLI LLC

Organized Under The Laws Of The Republic Of The Marshall Islands

This Certificate evidences the ownership by _______________________ of ______ common units representing limited liability company interests in Golar Hilli LLC (the “ Company ”), which interests are subject to the provisions of the Certificate of Formation and the Amended and Restated Limited Liability Company Agreement of the Company, as each may be amended, modified or otherwise supplemented from time to time.

Witness, the signature of the Company by its duly authorized officer.

Date: __________

Name:

Title:

For value received, the undersigned hereby sells, assigns and transfers unto _________________________________________ a total of __________ common units representing limited liability company interests in Golar Hilli LLC represented by this Certificate.

Date: __________

Name:

Title:

EXHIBIT 2

CERTIFICATE OF LIMITED LIABILITY COMPANY INTEREST

GOLAR HILLI LLC

Organized Under The Laws Of The Republic Of The Marshall Islands

This Certificate evidences the ownership by _______________________ of ______ Series A Special Units representing limited liability company interests in Golar Hilli LLC (the “ Company ”), which interests are subject to the provisions of the Certificate of Formation and the Amended and Restated Limited Liability Company Agreement of the Company, as each may be amended, modified or otherwise supplemented from time to time.

Witness, the signature of the Company by its duly authorized officer.

Date: __________

Name:

Title:

For value received, the undersigned hereby sells, assigns and transfers unto _________________________________________ a total of __________ Series A Special Units representing limited liability company interests in Golar Hilli LLC represented by this Certificate.

Date: __________

Name:

Title:

EXHIBIT 3

CERTIFICATE OF LIMITED LIABILITY COMPANY INTEREST

GOLAR HILLI LLC

Organized Under The Laws Of The Republic Of The Marshall Islands

This Certificate evidences the ownership by _______________________ of ______ Series B Special Units representing limited liability company interests in Golar Hilli LLC (the “ Company ”), which interests are subject to the provisions of the Certificate of Formation and the Amended and Restated Limited Liability Company Agreement of the Company, as each may be amended, modified or otherwise supplemented from time to time.

Witness, the signature of the Company by its duly authorized officer.

Date: __________

Name:

Title:

For value received, the undersigned hereby sells, assigns and transfers unto _________________________________________ a total of __________ Series B Special Units representing liability company interests in Golar Hilli LLC represented by this Certificate.

Date: __________

Name:

Title:

EXHIBIT 4

COMPUTATION OF INCREMENTAL PERENCO REVENUES

“ Incremental Perenco Revenues ” means:

(a) any cash received by Hilli Corp from revenues invoiced to the extent such revenues invoiced are based on Tolling Fees in excess of that set forth in Section 5.1(a)(iii) of the Perenco Contract (such invoiced amount being the “ Invoiced Brent Premium ”), before deducting any Underperformance Costs (as defined below) (“ Incremental Perenco Cash ”); less

(b) any incremental tax expense arising from or related to any cash receipts referred to in clause (a) above (“ Incremental Tax Expense ”); less

(c) the Pro-Rata Share of Underperformance Costs (as defined below) incurred by Hilli Corp during such Distribution Period (as defined below).

In the event that the amount of cash received by Hilli Corp is less than the amount invoiced, the amount of such cash that shall be treated as Incremental Perenco Cash shall be determined by applying the percentage that the Invoiced Brent Premium represented of the total amount invoiced, provided however that to the extent such shortfall in the cash received is specifically identifiable as Invoiced Brent Premium than such shortfall shall be applied entirely to Incremental Perenco Cash to the extent of that identification.

“ Distribution Period ” means any Series A Distribution Period or Series B Distribution Period.

“ Underperformance Costs ” means, with respect to any Distribution Period, additional costs incurred as a result of any one or more of the following with respect to such Distribution Period:

(a) Services Unavailability;


(b)	Off-Spec LNG;


(d)	Demurrage Event;


(e)	LNG shortfalls pursuant to the Perenco Contract;


(f)	Retainage in excess of the Operations Retainage Limit or during the Commissioning Period, Retainage in excess of the Commissioning Retainage Limit); or


(g)	terms or provisions in any other tolling agreement (or other agreement related thereto) then in effect that are similar to those set forth in (a) through (f) above relating to any similar claims or conditions.

Service Unavailability, Off-Spec LNG, SPA Costs, Demurrage Event, Retainage, Operations Retainage Limit, Commissioning Period and Commissioning Retainage Limit shall have the meaning given to such terms in the Perenco Contract.

“ Pro-Rata Share of Underperformance Costs ” means, with respect to any Distribution Period:


(a)	Incremental Perenco Cash less Incremental Tax Expense for such Series A Distribution Period; divided by the total cash received by Hilli Corp, before deducting any Underperformance Costs, during such Distribution Period; multiplied by

(b) the total Underperformance Costs with respect to such Distribution Period.

For example (excluding the effect of any Incremental Tax Expense):

If the Pro-Rata Share of Underperformance Costs exceeds the Incremental Perenco Revenues with respect to any Distribution Period, then the remaining cost shall be deducted from the next Series A Distribution.

EXHIBIT 5

COMPUTATION OF REVENUES LESS EXPENSES

“ Revenues Less Expenses ” means:

(a) the cash receipts from revenues invoiced by Hilli Corp as a direct result of the employment of more than the first fifty percent of LNG production capacity for Hilli FLNG, before deducting any Underperformance Costs (unless the incremental capacity above the first fifty percent is supplied under the terms of the Perenco Contract and the Term of the contract is not expanded beyond 500 billion cubic feet of Feed Gas (as defined in the Perenco Contract)), excluding, for the avoidance of doubt, any Incremental Perenco Revenues (“ Incremental Cash ”); less

(b) any incremental costs whatsoever, including but not limited to operating expenses, capital costs, financing costs and tax costs, arising as a result of employing and making available more than the first fifty percent of LNG production capacity for Hilli FLNG (“ Incremental Costs ”); less

(c) any reduction in revenue attributable to the first fifty percent of LNG production capacity availability as a result of making more than fifty percent of capacity available under the Perenco Contract (including, but not limited to, for example, as a result of a Tolling Fee rate reduction as contemplated in the Perenco Contract) (“ Revenue Reduction ”); less

(d) the Pro-Rata Share of Underperformance Costs (as defined below) incurred by Hilli Corp during such Distribution Period (as defined below).

For the avoidance of doubt, for so long as the Perenco Contract is in effect, the first fifty percent of LNG production capacity for Hilli FLNG shall be deemed to be supplied pursuant to the Perenco Contract (unless Perenco exercises its option pursuant to the Perenco Contract, in which case the percentage deemed to be supplied pursuant to the Perenco Contract shall be increased accordingly).

“ Underperformance Costs ” and “ Distribution Period ” have the meaning assigned to such terms in Exhibit 4 to this Agreement.

“ Pro-Rata Share of Underperformance Costs ” means, with respect to any Distribution Period:


(a)	Incremental Cash less Incremental Costs less Revenue Reduction for such Distribution Period; divided by the total cash received by Hilli Corp, before deducting any Underperformance Costs, during such Distribution Period; multiplied by

(b) the total Underperformance Costs with respect to such Distribution Period.

For example (excluding the effect of any Incremental Costs or Revenue Reduction):



	Revenue	Pro-Rata Share of Underperformance Costs	Net revenue
Total cash received excluding Incremental Perenco Revenues related to Series A Special Units and Revenues Less Expenses related to Series B Special Units (in all cases, before Underperformance Costs)	600	(100)	500
Incremental Perenco Revenues due to Series A Holders before Underperformance Costs	300	(50)	250
Revenue Less Expenses due to Series B Holders before Underperformance Costs	300	(50)	250
Total Cash Received Before Underperformance Costs	1200
Underperformance Costs	(200)
Total Cash Received After Underperformance Costs	1000	(200)	1000

If the Pro-Rata Share of Underperformance Costs exceeds the Revenues Less Expenses with respect to any Distribution Period, then the remaining cost shall be deducted from the next Series B Distribution.