1 | 2017 1 | 2017 2018 | 1

Market Update

January 2019

2 | 2017 2 | 2017 2018 | 2

Company Highlights

• During 2017 and 2018, Flex LNG has raised $629m

of equity and $473m of debt financing to increase its

fleet from two to thirteen LNGCs

• All thirteen LNGCs are large 174k cbm fifth

generation vessels fitted with slow speed two stroke

dual fuel engines (ME-GI and XDFs) resulting in

significant reduction in unit transportation costs

compared to steam or tri-fuel vessels

• Four vessels delivered during 2018, two vessels

scheduled for delivery in 2019 and another seven

for delivery in 2020/21

• Due to well positioned fleet and buoyant market,

revenues expected to increase from $19m in Q3 to

$ ≈35m in Q4

3 | 2017 3 | 2017 2018 | 3

Unique fleet comprising of 13 modern large 5th generation LNGCs

ME-GI X-DF ME-GI with Full

Reliquefaction System

ME-GI with Partial

Reliquefaction System

High Pressure Low pressure

Endeavour (2018)

Courageous (2019)

Freedom (2020)

Vigilant (2021)

ME-GI and X-DF vessels are the most fuel-efficient and technically advanced LNGCs

Source: Company

Enterprise (2018)

Ranger (2018)

Rainbow (2018)

Constellation (2019)

Resolute (2020)

Reliance (2020) Aurora (2020)

Amber (2020)

Volunteer (2021)

Initial Flex LNG LNGCs

Acquired in 2017:

$329m equity issued Acquired in 2018: $300m equity issued

4 | 2017 4 | 2017 2018 | 4

Flex LNG is the largest owner of 5th gen LNG vessels Unit transportation costs (round-trip US gulf to China)

The leading owner of 5th generation LNGCs

Based on commercial ownership of the vessels (source: Poten, Clarkson & Company)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

1stGeneration

145k ST 155k ST 160-165kDFDE/TFDE

174k ME-GI

Fuel Boil Off Port Charges Charter Hire

(1) Assuming speed of 16.5 knots (~74 days round trip), term charter rate of USD

70k/day, boil off gas priced at USD 5 / mmbtu, port cost of USD 250k, and allowance for

port fees and loadring discharge time. Source: Poten & Partners

$/MMBtu

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FlexLNG

Teekay GasLog MaranGas

Cardiff BP BWGroup

NYK KnutsenOAS

On OrderTrading

Open: 13

Open: 0 Open: 2

Open: 0

Open: 4

Open: 5 Open: 0

Open: 0

Open: 0

5 | 2017 5 | 2017 2018 | 5

LNG transportation in early phase of recovery

• Headline spot rates doubled from 2017 to 2018 due to tighter LNGC market driven by strong demand

• Arbitrage window expected to improve from Q4-18 to 2019

Estimated weekly average LNGC spot rates

Source: SSY, Affinity, Bloomberg and Company

Natural Gas Prices by Region and Arbitrage US -> Asia

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ARB - US -> Asia Henry HUB US

Delivered Asia NBP Europe

$ / Mmbtu

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250 000

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Spot $/Day

LNG 145K CBM Spot (Steam) LNG 160K CBM (TFDE)

DF-2S

6 | 2017 6 | 2017 2018 | 6

Steep nameplate capacity growth going in to 2019

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01.04.2018 01.07.2018 01.10.2018 01.04.2019 01.10.2019 01.01.2020 01.04.2020 01.07.2020 01.10.2020 01.10.2021 01.07.2022

Incremental LNG capacity growth 2018-2021

Cameron LNG Export T1-3

Cameroon FLNG

Coral FLNG

Corpus Christi LNG T1-3

Elba LNG

Freeport LNG T1-3

Ichthys T1

Petronas FLNG (Sabah)

Sabine Pass T2-5

Tangguh LNG T3

Wheatstone LNG T1-2

Yamal LNG T1,3,4

Mmtpa-Post FID

Source: Bloomberg, Poten and Company

7 | 2017 7 | 2017 2018 | 7

Resulting in glut of LNG coming to the market

Source: Bloomberg, Company

Year on Year Change LNG Export Volumes Post FID AND Likely LNG Export Projects

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North America Other Russia Africa

Indonesia Malaysia Australia Qatar

Mmtpa

(10)

(5)

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5

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25

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40

2019 2020 2021 2022 2023 2024 2025

Other

NorthAmerica

Russia

Africa

Indonesia

Malaysia

Australia

Qatar

Mmtpa-Post FID

8 | 2017 8 | 2017 2018 | 8

Tonnage demand by key LNG export areas

~1,4 x Vsl

~2,2 x Vsl ~1,5 x Vsl

~2,2 x Vsl

~0,8 x Vsl

~1,2 x Vsl

# of Vessels needed to deliver 1 MT of LNG

gradually increasing as especially US and

Northern Russia (winter) volume grows.

2018/2019 the multiplier is expected to increase

by 2,5%, absolute volume by 9%, fleet by ~10%

Source: Poten and Company

2018

New Export MT

2019E

New % split

Supply Country / Region % of Supply Multiplier

Vessel

Demand

Africa 10 % 1,46 0,70 9 %

Australia 22 % 1,16 10,5 12,2 21 %

Qatar 24 % 1,39 23 %

South East Asia 15 % 0,83 14 %

U.S. 7 % 2,19 15,0 32,9 10 %

Row 22 % 1,50 7,0 15,4 23 %

Volume weighted multiplier 1,34 33,2 60 1,37

9 | 2017 9 | 2017 2018 | 9

Basic assumptions:

• Average size of 155,000 cbm is capacity of

68,350 tonnes

• Average sailing distance: 4,000 nautical

miles

• RT 8,000 nautical miles

• Average speed (ballast/laden): 15 knots

• Average RT inc discarge/loading time: 29

days

• 2% time spent for dry-docking

• Average utilization: 90%

• Yearly lifting capacity per vessel: ≈750,000

• Gives multiple per mmpta of about 1.3 x

Why 1.3x multiple for LNGC?

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ipp

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ltip

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al m

ile

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Sample routes

Source: Company

10 | 2017 10 | 2017 2018 | 10

Half of US cargoes going far east in 2018

Source: Poten and Reuters

52% 29%

13%

6%

Asia Lat America

Europe Middle East

US cargo destinations for 2018

11 | 2017 11 | 2017 2018 | 11

Larger than usual movement in inventories

• In periods where Exports surpasses Demand, storage appears

• Vessel demand increases in the build up towards peak demand

• As imports catch up, inventories are drawn and vessel availability grows

Source: KPLER and Company

(30,00)

(20,00)

(10,00)

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2018 vsl 5y Avg vsl 2018 5y avg

World Exported less Imported LNG Balance (Adjusted for boil-off)

MT/

M #

Vessels

12 | 2017 12 | 2017 2018 | 12

El Nino conditions have resulted in higher temperatures in Pacific

Source: Australian Bureau of Metrology

Sea Surface Temperature anomaly December 2018

13 | 2017 13 | 2017 2018 | 13

Very few uncommitted vessels available before H2-2020

• About 105 LNGC orders including 6 Arc 7 LNGCs

• Very limited open vessels before H2-2020

• Increased sailing distances due to US/Russian volumes supportive of LNGC demand

Order book for large LNG carriers Average sailing distances (laden)

Source: Fearnleys and DNB

3 600

3 800

4 000

4 200

4 400

4 600

4 800

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tica

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Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4

2019 2020 2021

Committed Open

# V

esse

ls

14 | 2017 14 | 2017 2018 | 14

Ketchup effect on ordering

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

LNG Contracting activity

# N

o o

f V

esels

Source: Poten

187 vessels 110 vessels

15 | 2017 15 | 2017 2018 | 15

Switching to LNG is as much health policy as energy and/or

environmental policy

• In South Asia, air pollution larger health risk than tobacco, cancer, water sanitation and on par with dietary risk

• If the air pollution improves from China's level to the American EPA standard level, that means that would improve

everyone's education by around one year

Source: Texas A&M University, NPR and Science News

16 | 2017 16 | 2017 2018 | 16

Air pollution: a glocal problem

• 9 out of 10 people breathe unhealthy air.

• 6.5 million pre-mature deaths every year caused by outdoor and household air pollution.

Source: WHO/FT

17 | 2017 17 | 2017 2018 | 17

Summary

Right Ships

Right Time

Right Market

Right Owner

Four LNGCs on the water and nine LNGCs under

construction, all fitted with 5th generation propulsion

(two-stroke low-speed engines) providing substantial fuel

savings and larger parcel size

The market have re-balanced and is now in early phase of

recovery with higher charter rates and utilization as well

as increased interest for longer term contracts

LNGC market have very strong long-term fundamentals

due to increased demand for LNG, emissions focus and

commoditization of LNG resulting in more trading

The principal shareholder has evidenced unrivaled

performance in building strong shipping companies and

is supportive of Flex LNG in relation to credit and S&P

transactions

18 | 2017 18 | 2017 2018 | 18 18 | 2018

Q&A