Prospectus. Golar LNG Partners LP. Registration Document. Golar LNG Partners LP, prospectus of 6 December Registration Document

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1 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document Prospectus Golar LNG Partners LP Registration Document Oslo, 6 December 2012 Joint Lead Managers: 1

2 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document Important information References in this Registration Document to Issuer, Golar Partners, and Partnership refer to Golar LNG Partners L.P. and its subsidiaries. For further the definitions of terms used throughout this Registration Document, see Section 2 - Definitions. This Registration Document is based on sources such as annual reports and publicly available information and forward looking information based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for the Partnership's (including its subsidiaries and affiliates) lines of business. The Norwegian Financial Supervisory Authority (Nw.: Finanstilsynet) has reviewed and approved this Registration Document in accordance with Sections 7-7 and 7-8 of the Norwegian Securities Trading Act. All inquiries relating to this Registration Document should be directed to the Issuer or the Joint Lead Managers. No other person has been authorised to give any information about, or make any representation on behalf of, the Issuer in connection with the Bond Issue.If any such information is given or made, it must not be relied upon as having been authorised by the Issuer or the Managers or any of its affiliates or advisors. The information contained herein is as of the date hereof and subject to change, completion or amendment without notice. There may have been changes affecting the Issuer or its subsidiaries subsequent to the date of this Registration Document. The delivery of this Registration Document at any time after the date hereof will not, under any circumstances, create any implication that there has been no change in the Issuer s affairs since the date hereof or that the information set forth in this Registration Document is correct as of any time since its date. A prospective investor should consider carefully the factors set forth in chapter 1 Risk factors, and elsewhere in the Prospectus, and should consult his or her own expert advisers as to the suitability of an investment in the bonds. This Registration Document is subject to the general business terms of the Joint Lead Managers, available at their respective websites. Confidentiality rules and internal rules restricting the exchange of information between different parts of the Joint Lead Managers may prevent employees of the Joint Lead Managers who are preparing this Registration Document from utilizing or being aware of information available to the Joint Lead Managers and/or any of their affiliated companies and which may be relevant to the recipient's decisions. The Joint Lead Managers and/or any of their affiliated companies and/or officers, directors and employees may be a market maker or hold a position in any instrument or related instrument discussed in this Registration Document, and may perform or seek to perform financial advisory or banking services related to such instruments. The Joint Lead Managers' corporate finance department may act as manager or co-manager for this Partnership in private and/or public placement and/or resale not publicly available or commonly known. Copies of this Registration Document are not being mailed or otherwise distributed or sent in or into or made available in the United States. Persons receiving this document (including custodians, nominees and trustees) must not distribute or send such documents or any related documents in or into the United States. Other than in compliance with applicable United States securities laws, no solicitations are being made or will be made, directly or indirectly, in the United States. Securities will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The distribution of this Registration Document may be limited by law also in other jurisdictions, for example in Canada, Japan and in the United Kingdom. Verification and approval of this Registration Document by Finanstilsynet (the Norwegian FSA) implies that this Registration Document may be used in any EEA country. No other measures have been taken to obtain authorisation to distribute this Registration Document in any jurisdiction where such action is required. The Registration Document together with a Securities Note constitutes the Prospectus. 2

3 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document TABLE OF CONTENTS: 1 SUMMARY OF RISK FACTORS DEFINITIONS PERSONS RESPONSIBLE INDEPENDENT AUDITORS CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS INFORMATION ABOUT THE PARTNERSHIP BUSINESS OVERVIEW ORGANISATIONAL STRUCTURE TREND INFORMATION ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES MAJOR SHAREHOLDERS SELECTED FINANCIAL INFORMATION CONCERNING THE PARTNERSHIP'S ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST MATERIAL CONTRACTS DOCUMENTS ON DISPLAY CROSS REFERENCE LIST JOINT LEAD MANAGERS' DISCLAIMER ANNEX I GOLAR LNG PARTNERS LP

4 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 1 Summary of risk factors Investing in bonds issued by the Partnership involves inherent risks. Prospective investors should carefully consider, among other things, the risk factors set out in the Prospectus, including those set out in the Securities Note and the risk factors beginning on page 3 of the Partnership s 2011 Annual Report incorporated by reference into this prospectus, before making an investment decision. The risks and uncertainties described in the Prospectus are risks of which the Partnership is aware and that the Partnership considers to be material to its business. If any of the following risks were to occur, the Partnership s business, financial position, operating results or cash flows could be significantly and negatively affected, and the Partnership could be unable to pay interest, principal or other amounts on or in connection with the bonds. The order in which the summary of risks are presented below are not intended to provide an indication of the likelihood of their occurrence nor of their severity or significance. These risks should also be considered in connection with the cautionary note regarding forward-looking statements set forth in Section 5. Risks inherent in the business of the Partnership For further detail of the risk factors mentioned below refer to the risk factors beginning on page 3 of the Annual Report of The Partnership will be required to make substantial capital expenditures to expand the size of its fleet. Depending on whether the Partnership finances its expenditures through cash from operations or by issuing debt or equity securities, its ability to make cash distributions may be diminished, the Partnership s financial leverage could increase or the Partnership s unitholders could be diluted. Golar Partners has no ability to borrow additional amounts under its revolving credit facility. If the Partnership is unable to obtain additional financing, it may be unable to meet its obligations as they come due, enhance its existing business, complete acquisitions, respond to competitive pressures or otherwise execute its growth strategy. The Partnership depends on certain affiliates of Golar LNG Limited (or Golar), including Golar Management Limited (or Golar Management) and Golar Wilhelmsen AS (or Golar Wilhelmsen or GWM) to assist the Partnership in operating and expanding its business and providing interim financing for certain vessel acquisitions. Golar Partners may not have sufficient cash from operations following the establishment of cash reserves and payment of fees and expenses to enable the Partnership to pay the minimum quarterly distribution on its common units and subordinated units. The Partnership must make substantial capital expenditures to maintain and replace the operating capacity of its fleet, which will reduce its cash available for distribution. In addition, each quarter the Partnership is required to deduct estimated maintenance and replacement capital expenditures from operating surplus, which may result in less cash available to unitholders than if actual maintenance and replacement capital expenditures were deducted. Golar Partners may be unable to make or realize expected benefits from acquisitions, including the Partnership s acquisition of the Nusantara Regas Satu (or NR Satu) and the Golar Grand, which we acquired in July 2012 and November 2012, respectively, which could have an adverse effect on the Partnership s expected plans for growth. For further discussion of the acquisitions refer to section The required drydocking of the Partnership s vessels could be more expensive and time consuming than the Partnership anticipates, which could adversely affect its cash available for distribution and its ability to meet its obligations to security holders. The growth of the Partnership depends on continued growth in demand for LNG, FSRUs and LNG carriers. The Partnership has only seven vessels in its fleet. Any limitation on the availability or operation of those vessels could have a material adverse effect on its business, results of operations and financial condition and could significantly reduce its ability to make distributions to its unitholders and its ability to meet its obligations to security holders. 4

5 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document Golar Partners currently derives all of its revenue from five customers. The loss of any of these customers would result in a significant loss of revenues and cash flow, if for an extended period of time, the Partnership is not able to re-charter a vessel to another customer. The Partnerships debt levels may limit its flexibility in obtaining additional financing, pursuing other business opportunities and paying distributions to unitholders. The financing arrangements of the Partnership are secured by its vessels and contain operating and financial restrictions and other covenants that may restrict its business and financing activities as well as its ability to make cash distributions to its unitholders. Growth of the LNG market may be limited by many factors, including infrastructure constraints and community and political group resistance to new LNG infrastructure over concerns about the environment, safety and terrorism. The growth of the Partnership depends on its ability to expand relationships with existing customers and obtain new customers, for which it will face substantial competition. The Partnership may have more difficulty entering into long-term time charters in the future if an active short-term or spot LNG shipping market continues to develop. Hire rates for FSRUs and LNG carriers are not readily available and may fluctuate substantially. If rates are lower when the Partnership is seeking a new charter, its earnings, ability to make distributions to its unitholders and to meet its obligations to security holders may decline. Vessel values may fluctuate substantially and, if these values are lower at a time when the Partnership is attempting to dispose of vessels, it may incur a loss. The Partnership s insurance may be insufficient to cover losses that may occur to its property or result from its operations. An increase in operating expenses or drydocking costs could materially and adversely affect the financial performance of the Partnership. An increased shortage of qualified officers and crew could have an adverse effect on the Partnership s business and financial condition. The Partnership may be unable to attract and retain key management personnel in the LNG industry, which may negatively impact the effectiveness of its management and its results of operation. Exposure to currency exchange rate fluctuations will result in fluctuations in the Partnership s cash flows and operating results. Three of the Partnership s vessels are financed by UK tax leases. In the event of any adverse tax changes or a successful challenge by the UK Revenue authorities with regard to the initial tax basis of the transactions or in the event of an early termination of a lease, the lessees may be required to make additional payments to the UK vessel lessors, which could adversely affect the Partnership s earnings and financial position. Golar has agreed to indemnify the Partnership against the increased costs (with respect to the Methane Princess and Golar Grand leases but not with respect to the Golar Winter lease), but any default would not limit the Partnership s obligations. The economic downturn may affect the customers ability to charter the vessels of the Partnership and pay for its services and may adversely affect its business and results of operations. The Partnership currently operates primarily outside the United States, which could expose it to political, governmental and economic instability that could harm its operations. The Partnership may not be able to redeploy its FSRUs on terms as favorable as the Partnership s or Golar s current FSRU charter arrangements or at all. The charterer of the vessel the NR Satu, Nusantara Regas has the right to purchase the NR Satu at any time after the first anniversary of the commencement date of its charter at a price that must be agreed upon between the Partnership and Nusantara Regas. If Nusantara Regas exercises its purchase option, it would reduce the size of the Partnership s fleet and the Partnership may be unable to identify or acquire a suitable replacement vessel with the proceeds of the option exercise. In addition, if Nusantara Regas exercises its option to extend the charter, the total charter hire rate will be reduced by 5

6 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document approximately 11.6% per day for any day in the extension period falling in 2023, with a further 7.0% reduction for any day in the extension period falling in 2024 and The exercise of these options could have a material adverse effect on the Partnership s cash flow and the ability to make distributions to its unitholders and to meet its obligations to security holders. Due to the Partnership s lack of diversification, adverse developments in the Partnership s LNG transportation or storage and regasification businesses could reduce its ability to make distributions to its unitholders. The Partnership has a 60% interest in the Golar Mazo, which enables the Partnership to control the joint venture subject to certain negative controls held by Chinese Petroleum Corporation ( CPC ), who holds the remaining 40% interest in the Golar Mazo. Under the shareholder s agreement, no party may sell, assign, mortgage, or otherwise transfer its rights, interests or obligations under the agreement without the prior written consent of the other party. If the Partnership determines that the sale or transfer of its interest in the Golar Mazo is in its best interests, the Partnership must provide CPC notice of its intent to sell or transfer its interest and grant CPC a right of first refusal to purchase its interest. If CPC does not accept the offer within 60 days after notification, the Partnership will be free to sell or transfer its interest to a third party. Any delay in the sale or transfer of the Partnership s interest in the Golar Mazo or restrictions in its ability to manage the joint venture could have a material adverse effect on its cash flow and affect its ability to make distributions to its unitholders and to meet its obligations to security holders. Risks related to the industry of the Partnership The operation of FSRUs (and where applicable related moorings) and LNG carriers is inherently risky, and an incident involving significant loss of life or environmental consequences affecting any of the Partnership s vessels could harm its reputation and business. A renewal of the global financial crisis could negatively impact the Partnership s business. Terrorist attacks, piracy, increased hostilities or war could lead to further economic instability, increased costs and disruption of the Partnership s business. The LNG transportation, storage and regasification industry is subject to substantial environmental and other regulations, compliance with which may significantly limit the operations of the Partnership or increase its expenses. The Partnership may be unable to obtain, maintain, and/or renew permits necessary for its operations or experience delays in obtaining such permits, which could have a material effect on its operations. The Partnership s vessels operating in international waters now or, in the future, will be subject to various federal, state and local laws and regulations relating to protection of the environment. The Partnership s vessels operating in U.S. waters now or, in the future, will be subject to various federal, state and local laws and regulations relating to protection of the environment. Further changes to existing environmental legislation that is applicable to international and national maritime trade may have an adverse effect on the Partnership. Climate change and greenhouse gas restrictions may adversely impact the Partnership s operations and markets. Maritime claimants could arrest the Partnership s vessels, which could interrupt its cash flow. Compliance with safety and other vessel requirements imposed by classification societies may be very costly and may adversely affect the Partnership s business. Risks inherent in an investment in the Partnership Golar and its affiliates may compete with Golar Partners. Unitholders have limited voting rights, and the Partnership s partnership agreement restricts the voting rights of the unitholders owning more than 4.9 % of its common units. 6

7 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document The Partnership s general partner and its other affiliates own a significant interest in the Partnership and have conflicts of interest and limited fiduciary and contractual duties, which may permit them to favor their own interests to the detriment of the unitholders. The officers of Golar Partners face conflicts in the allocation of their time to the business of the Partnership. The partnership agreement limits the Partnership s general partner s and the Partnership s directors fiduciary duties to its unitholders and restricts the remedies available to unitholders for actions taken by the Partnership s general partner or its directors. Fees and cost reimbursements, which Golar Management determines for services provided to Golar Partners, are substantial, are payable regardless of its profitability and reduce its cash available for distribution to its unitholders. The partnership agreement of Golar Partners contains provisions that may have the effect of discouraging a person or group from attempting to remove the Partnership s current management or the Partnership s general partner, and even if public unitholders are dissatisfied, they will be unable to remove the general partner without Golar s consent, unless Golar s ownership interest in the Partnership is decreased; all of which could diminish the trading price of the common units. The control of the Partnership s general partner may be transferred to a third party without unitholder consent. Substantial future sales of the Partnership s common units in the public market could cause the price of the common units to fall. The Partnership s general partner, as the holder of a majority of the incentive distribution rights, may elect to cause us to issue additional common units to it and Golar in connection with a resetting of the target distribution levels related to the general partner s and Golar s incentive distribution rights without the approval of the conflicts committee of the Partnership s board of directors or holders of its common units and subordinated units. This may result in lower distributions to holders of the Partnership s common units in certain situations. Golar Partners may issue additional equity securities, including securities senior to the common units, without the approval of its unitholders, which would dilute the Partnership s current unitholders ownership interests. Upon the expiration of the subordination period, the subordinated units will convert into common units and will then participate pro rata with other common units in distributions of available cash. In establishing cash reserves, the board of directors may reduce the amount of cash available for distribution to the Partnership s unitholders. The general partner of Golar Partners has a limited call right that may require unitholders to sell their common units at an undesirable time or price. Unitholders may not have limited liability if a court finds that unitholder action constitutes control of the Partnership s business. Golar Partners can borrow money to pay distributions, which would reduce the amount of credit available to operate its business. Increases in interest rates may cause the market price of the Partnership s common units to decline. Under some circumstances, unitholders may have liability to repay amounts wrongfully returned or distributed to them. Golar Partners is organized as a limited partnership under the laws of the Republic of the Marshall Islands, which does not have a well-developed body of partnership law. Because the Partnership is organized under the laws of the Marshall Islands, it may be difficult to serve it with legal process or enforce judgements against it, its directors or its management. 7

8 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document Tax risks U.S.tax authorities could treat Golar Partners as a passive foreign investment Partnership, which would have adverse U.S. federal income tax consequences to U.S.unitholders. The preferential tax rates applicable to qualified dividend income are temporary, and the enactment of previously proposed legislation could affect whether dividends paid by Golar Partners constitute qualified dividend income eligible for the preferential rate. The Partnership may have to pay tax on U.S. source income, which would reduce its cash flow. Unitholders may be subject to income tax in one or more non-u.s. jurisdictions, including the United Kingdom, as a result of owning the Partnership s common units if, under the laws of any such jurisdiction, the Partnership is considered to be carrying on business there. Such laws may require unitholders to file a tax return with, and pay taxes to, those jurisdictions. Risks related to the Partnership s bond offering Bonds are senior unsecured obligations and are effectively subordinated to Golar Partner s and its subsidiaries secured debt. Although senior to Golar s vendor financing loans in the event of a bankruptcy or similar proceeding involving Golar Partners or a subsidiary, the assets that serve as collateral will be available to satisfy the obligations under any secured debt before any payments are made on the bonds. Golar Partner s ability to service its debt, including the bonds, will depend upon, among other things, its future financial operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond the Partnership s control. If the Partnership s operating results are not sufficient to service its current or future indebtedness, including the bonds, the Partnership will be forced to take actions such as reducing distributions, reducing or delaying its business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing debt, or seeking additional equity capital or bankruptcy protection. Golar Partners may not be able to effect any of these remedies on satisfactory terms, or at all. 8

9 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 2 Definitions Issuer/Golar Partners/ Partnership EIA FSRU GAAP Golar Group LNG Golar LNG Partners L.P. and its subsidiaries The U.S. Energy Information Administration. Floating Storage and Regasification Units U.S. generally accepted accounting principles. Golar LNG Limited and its subsidiaries The Issuer and its Subsidiaries, and a Group Company means the Issuer or any of its Subsidiaries. Liquefied Natural Gas Registration Document This document dated 6 December Annual Report of 2011 The Partnership's report for the year ended 31 December U.S. Registration Statement Registration Statement relating to the Partnership s initial public offering in the U.S dated 7 April Quarterly Report 1 Q 2012 The Partnership's report for the quarterly period ended 31 March 2012 (unaudited). Quarterly Report 2 Q 2012 The Partnership's report for the quarterly period ended 30 June 2012 (unaudited). Quarterly Report 3 Q 2012 The Partnership's report for the quarterly period ended 30 September 2012 (unaudited). 9

10 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 3 Persons responsible 3.1 Persons responsible for the information Persons responsible for the information given in the Registration Document are as follows: Golar LNG Partners LP, Par-la-Ville Place, 4th floor, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda 3.2 Declaration by persons responsible Golar LNG Partners LP accepts responsibility for the information contained in the Registration Document. The Issuer confirms that, after having taken all reasonable care to ensure that such is the case, the information contained in the Registration Document is, to the best of its knowledge, in accordance with the facts and contains no omissions likely to affect its import. 6 December 2012 Graham Robjohns Chief Executive Officer Golar LNG Partners LP 10

11 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 4 Independent Auditors 4.1 Names and addresses The Partnership s auditor is PricewaterhouseCoopers LLP, independent public accountants, located at 1 Embankment Place, London, WC2N 6RH, United Kingdom. PricewaterhouseCoopers LLP is an independent public accounting firm registered with the Public Company Accounting Oversight Board. PwC has not audited, reviewed or produced any report on any information provided in this Registration Document, except with respect to its audit report on the Partnership s Financial Statements for the years ended 31 December 2010 and 2011 incorporated by reference as per section PricewaterhouseCoopers LLP is a statutory audit firm registered with the Institute of Chartered Accountants of England and Wales. 11

12 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 5 Cautionary Note Regarding Forward Looking Statements The Registration Document includes forward-looking statements that involve risks and uncertainties. Such forward-looking statements discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to the Partnership, based on the current beliefs of management as well as assumptions made by, and information currently available to, management. Words such as expect, anticipate, intend, plan, believe, estimate, project, forecast, will, may, potential, should, and similar expressions identify forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this Registration Document and the documents that have been incorporated by reference. Actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially include, but are not limited to those factors discussed in Section 1 Summary Risk Factors. Although it is believed that the expectations are based upon reasonable assumptions, the Partnership can give no assurance that those expectations will be achieved or that the actual results will be as set out in the presentation 12

13 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 6 Information about the Partnership 6.1 History and development of the Partnership Legal and commercial name The legal name of the Issuer is Golar LNG Partners LP, the commercial name is Golar LNG Partners Place of registration and registration number The Partnership is registered in the Marshall Islands Register of Companies with registration number Date of incorporation Golar LNG Partners LP was formed on 24 September Domicile and legal form The Partnership is a limited partnership organized under the laws of The Republic of The Marshall Islands. The Partnership operates under the provisions of the Marshall Islands Business Corporation Act. The Partnership is registered in Bermuda as an overseas partnership which permits the Partnership to maintain its principal executive headquarters and registered address at Par-la-Ville Place, 14 Par-la- Ville Road, Hamilton HM 08, Bermuda. The telephone number at such address is +1 (441) The Partnership maintains its principal administrative offices at 13 th floor, One America Square, 17 Crosswall, London EC3N 2LB, United Kingdom Recent events relevant to evaluation of solvency There are no recent events relevant to evaluation of insolvency. 13

14 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 7 Business overview 7.1 Introduction General The business of the Partnership is to own and operate FSRUs and LNG carriers under long-term time charters (which is defined as charters with terms of five or more years). The primary business objective is to increase quarterly distributions per unit over time by growing the Partnership s business through accretive acquisitions of FSRUs and LNG carriers and by chartering the Partnership s vessels pursuant to long-term charters with high quality customers that generate long-term stable cash flows. The vessels in the current fleet are chartered to BG Group Plc (or BG Group), PT Pertamina PERSERO (or Pertamina), Petróleo Brasileiro S.A. (or Petrobras), Dubai Supply Authority (or DUSUP) and PT Nusantara Regas (or Nusantara Regas) under long-term time charters that, as of 30 September 2012 had an average remaining term of 7.9 years (including that of the Golar Grand). The Partnership intends to leverage the relationships, expertise and reputation of Golar, a leading independent owner and operator of FSRUs and LNG carriers, to pursue potential growth opportunities and to attract and retain high-quality, creditworthy customers. Golar owns the 2.0% general partner interest, all of the Partnership s incentive distribution rights and a 52% limited partner interest in the Partnership. Golar intends to utilize the Partnership as its primary growth vehicle to pursue the acquisition of long-term stable cash flow generating FSRUs and LNG carriers Recent developments Golar Grand Acquisition On 8 November 2012, the Partnership acquired ownership interests in the subsidiaries that lease and operate the Golar Grand (or the Golar Grand Acquisition) for an aggregate purchase price of $265.0 million less the assumption of outstanding lease obligations relating to the Golar Grand (net of the associated cash deposit) amounting to approximately $90.0 million. The Golar Grand is an LNG carrier with a carrying capacity of 145,700 cubic meters that was built by Korean shipyard Daewoo Shipbuilding & Marine Engineering Co. Ltd and delivered to Golar in The Golar Grand was delivered to its current charterer, Methane Services Limited, a wholly owned subsidiary of BG Group, in March 2012 under a charter with an initial term expiring in March 2015 (or the Golar Grand charter). The charterer has the option to extend the Golar Grand charter for an additional three years at the same hire rate payable during the initial term. In connection with the Golar Grand Acquisition, the Partnership entered into an option agreement with Golar pursuant to which the Partnership will have the option to require Golar to charter the Golar Grand from the Partnership in the event that the charterer does not renew the Golar Grand charter beyond its initial term. In the event that the Partnership exercises this option, the hire rate that will be paid by Golar will be approximately 75% of the hire rate that would have been payable by Methane Services Limited under the Golar Grand charter. The new charter with Golar would expire in October NR Satu Acquisition On July 19, 2012, the Partnership acquired ownership interests in the entities that own and operate the FSRU, the NR Satu, and related mooring facility (or the NR Satu Acquisition) from Golar for a purchase price of $385 million. The NR Satu Acquisition was financed by the proceeds of the Partnership s July 2012 equity offerings, cash on hand and vendor financing from Golar in the amount of $155 million. The loan from Golar has a term of three years and bears interest at 6.75% per annum. The Partnership expects to refinance the loan from Golar with bank financing in the near future. The NR Satu is being employed in connection with the West Java FSRU Project in Indonesia and is permanently moored during the charter term at a purpose-built mooring structure located offshore of West Java, Indonesia. The NR Satu has a storage capacity of 125,000 cubic meters of LNG and a maximum offtake capacity of 0.5 billion cubic feet per day of regasified LNG via Nusantara Regas pipeline that fuels two power plants owned and operated by Perusahaan Listrik Negara, Indonesia s national power company. Nusantara Regas is a joint venture that is 60% owned by Pertamina and 40% owned by an Indonesian distribution firm, PT Perusahaan Gas Negara. In connection with the NR Satu Acquisition, the Partnership acquired a 100% equity interest in a subsidiary of Golar that holds all of the voting stock and controls all of the economic interest in PT Golar Indonesia (or PTGI), 14

15 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document the subsidiary that is the registered owner and operator of the NR Satu, pursuant to a shareholders agreement with the other sole shareholder of PTGI, PT Pesona Sentra Utama (or PT Pesona). PT Pesona is an Indonesian company, established in 2005 and engaged in technical and crewing management in Indonesia, that holds a 51% interest in the issued share capital of PTGI. PT Pesona financed its purchase of its shareholding with a loan from a subsidiary of Golar. PT Pesona provides agency and local representation services for the Partnership with respect to the NR Satu in exchange for a fee. PT Pesona is a joint venture partner in respect of the acquisition and operations of NR Satu in order to comply with Indonesian cabotage laws. Upon its delivery in May 2012, the NR Satu began receiving charter hire under a charter with Nusantara Regas with an initial term that expires on 31 December Nusantara Regas is required to extend the charter by up to three years if, at the time of the expiration of the initial term, Nusantara Regas has contracted for the delivery of LNG to the NR Satu for a period that extends beyond the initial term The natural gas industry Predominately used to generate electricity and as a heating source, natural gas is one of the big three fossil fuels that make up the vast majority of world energy consumption. As a cleaner burning fuel than both oil and coal, natural gas has become an increasingly attractive fuel source in the last decade. As more emphasis is placed on reducing carbon emissions, Organization for Economic Cooperation and Development (or OECD) nations have come to view natural gas as a way of reducing their environmental footprint, particularly for electricity where natural gas-fired facilities have been gradually replacing oil, coal and older natural gasfired plants. Natural gas is an abundant fuel source, with the EIA estimating that, as of 1 January 2011, worldwide proved natural gas reserves were 6,675 Tcf (189,014 bcm). Almost three-quarters of the world s natural gas reserves are located in the Middle East and Eurasia. Russia, Iran and Qatar accounted for 54 % of the world s natural gas reserves as of 1 January 2011, and the United States is the fifth largest holder of natural gas reserves at 4.1% of the world s reserves. The EIA predicts a substantial increase in the production of unconventional natural gas, including tight gas, shale gas and coalbed methane. Although reserves of unconventional natural gas are unknown, the EIA predicts a substantial increase in natural gas supplies from unconventional formations in the future, especially from the United States but also from Canada, France, Poland, Turkey, Ukraine, South Africa, Morocco, Chile, Mexico, China, Australia, Libya, Algeria, Argentina and Brazil. Shale gas production has been particularly prolific increasing by over 5 billion cubic feet (or Bcf) per day since the beginning of This increase largely results from recent advances in horizontal drilling and hydraulic fracturing technologies, especially in the U.S. These technologies have made it possible to exploit the U.S. s vast shale gas resources. Rising estimates of shale gas resources have helped to increase estimates of the total U.S. natural gas reserves by almost 50% over the past decade. The EIA expects shale gas to comprise 47% of U.S. natural gas production in The reduced rate of growth in LNG demand in the U.S. resulting from the increase in production of shale gas is expected to be at least partly offset by increased demand for LNG in other nations, especially non-oecd countries. 7.2 Liquefied natural gas Overview The need to transport natural gas over long distances across oceans led to the development of the international LNG trade. The first shipments were made on a trial basis in 1959 between the United States and the United Kingdom, while 1964 saw the start of the first commercial-scale LNG project to ship LNG from Algeria to the United Kingdom. LNG shipping provides a cost-effective and safe means for transporting natural gas overseas. The LNG is transported overseas in specially built tanks on double-hulled ships to a receiving terminal, where it is offloaded and stored in heavily insulated tanks. In regasification facilities at the receiving terminal, the LNG is returned to its gaseous state (or regasified) and then conveyed by pipeline for distribution to natural gas customers. The following diagram displays the flow of natural gas and LNG from production to regasification- 1 Poten & Partners -LNG Databases 15

16 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document The LNG supply chain involves the following components: Gas field production and pipeline: Natural gas is produced and transported via pipeline to natural gas liquefaction facilities located along the coast of the producing country. Liquefaction Plant and Storage: Natural gas is cooled to a temperature of minus 260 degrees Fahrenheit, transforming the gas into a liquid, which reduces its volume to approximately 1/600th of its volume in a gaseous state. The reduced volume facilitates economical storage and transportation by ship over long distances, enabling countries with limited natural gas reserves or limited access to long-distance transmission pipelines to meet their demand for natural gas. Shipping: LNG is loaded onto specially designed, double-hulled LNG carriers and transported overseas from the liquefaction facility to the receiving terminal. Regasification: At the regasification facility (either onshore or aboard specialized LNG carriers), the LNG is returned to its gaseous state, or regasified. Storage, Distribution and Marketing: Once regasified, the natural gas is stored in specially designed facilities or transported to natural gas consumers and end-use markets via pipelines. According to Wood Mackenzie LNG 2 liquefaction capacity was 175 million tonnes per annum in 2007, this increased to 242 million tonnes per annum by 2011 and is expected to increase to approximately 280 million tonnes by The LNG carrier fleet As of end March 2012, the world LNG carrier fleet consisted of 367 LNG carriers (including FSRUs and Regasification Vessels and 8 vessels currently in Lay-up). By end March 2012, there were orders for 79 new LNG carriers (including 6 FSRUs, 1 small vessel with a capacity of 15,600m3 and 2 production units), with the bulk of ordered vessels not expected to deliver until While there are a number of different types of LNG vessels and containment systems, there are two dominant containment systems in use today: The Moss system was developed in the 1970s and uses free standing insulated spherical tanks supported at the equator by a continuous cylindrical skirt. In this system, the tank and the hull of the vessel are two separate structures. The Membrane system uses insulation built directly into the hull of the vessel, along with a membrane covering inside the tanks to maintain their integrity. In this system, the ship s hull directly supports the pressure of the LNG cargo. Illustrations of these systems are included below: 2 Wood Mackenzie LNG Databases. 16

17 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document Of the vessels currently trading and on order, approximately 72% employ the membrane containment system, 26% employ the Moss system and the remaining 2% employ other systems. Of the newbuilds, vessels on order that have employed the membrane containment system, they have done so primarily because it most efficiently utilizes the entire volume of a ship s hull. The construction period for an LNG carrier is approximately months. Propulsion systems also differ. Historically most ships were built with steam turbine propulsion whereas most current newbuilds have been ordered with more efficient tri-fuel diesel electric engines. Most LNG carriers can use the natural boil off of gas from LNG to power the vessel Seasonality Historically, LNG trade, and therefore charter rates, increased in the winter months and eased in the summer months as demand for LNG in the Northern Hemisphere rose in colder weather and fell in warmer weather. The tanker industry in general has become less dependent on the seasonal transport of LNG than a decade ago as new uses for LNG have developed, spreading consumption more evenly over the year. There is a higher seasonal demand during the summer months due to energy requirements for air conditioning in some markets and a pronounced higher seasonal demand during the winter months for heating in other markets Floating LNG regasification Floating LNG storage and regasification vessels Floating LNG regasification vessels are commonly known as FSRUs. The FSRU regasification process involves the vaporization of LNG and injection of the resultant natural gas directly into one or more pipelines. In order to regasify LNG, FSRUs are equipped with vaporizer systems that can operate in the open-loop mode, the closedloop mode or in both modes. In the open-loop mode, seawater is pumped through the system to provide the heat necessary to convert the LNG to the vapor phase. In the closed-loop system, a natural gas-fired boiler is used to heat water circulated in a closed-loop through the vaporizer and a steam heater to convert the LNG to the vapor phase. In general, FSRUs can be divided into four subcategories: FSRUs that are permanently located offshore; FSRUs that are permanently alongside (with LNG transfer being either directly ship to ship or over a jetty); shuttle carriers that regasify and discharge their cargos offshore (sometimes referred to as energy bridge); and shuttle carriers that regasify and discharge their cargos alongside. Golar s and the Partnership s business model to date has been focused on FSRUs that are permanently offshore or alongside and focused on continuous regasification service. Demand for floating LNG regasification facilities The long-term outlook for global natural gas supply and demand has stimulated growth in LNG production and trade, which is expected to drive a necessary expansion of regasification infrastructure. While worldwide regasification exceeds worldwide liquefaction capacity, a large portion of the existing global regasification capacity is concentrated in a few markets such as Japan, Korea and the U.S. Gulf Coast. There remains a significant demand for regasification infrastructure in growing economies in Asia, Middle-East and Central/South America. The Partnership believes that the advantages of FSRUs compared to onshore facilities make them highly competitive in these markets. Floating LNG regasification projects first emerged as a solution to the difficulties and protracted nature of obtaining permission to build shore-based LNG reception facilities (especially along the North American coasts). Due to their offshore location, floating facilities are less likely than onshore facilities to be met with resistance in local communities, which is especially important in the case of a facility that is intended to serve a highly populated area where there is a high demand for natural gas. As a result, it is typically easier and faster for 17

18 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document FSRUs to obtain necessary permits than for comparable onshore facilities. More recently, cost and time have become the main drivers behind the growing interest in the various types of floating LNG regasification projects. In addition, the flexibility afforded by floating LNG regasification facilities provides an advantage over onshore facilities. A floating regasification vessel can load, store and regasify LNG before delivering the natural gas to market. It can be operated partially as a conventional trading ship that transports and regasifies its own cargo, or as a mother-ship that processes supplies received by way of ship-to-ship transfers. FSRUs can also be moved to (and operated at) a different location if required, which is particularly beneficial in markets where demand for LNG is seasonal. Additionally, FSRUs offer quicker access to LNG supply for markets that lack onshore regasification infrastructure. The FSRU can be a substitute for a land based terminal and remain a fixed and permanent facility over the long term but can also complement land based regasification by providing storage and regasification to a market while the longer lead time land based terminal is being constructed. Floating LNG regasification vessel fleet size and ownership Compared to onshore terminals, the floating LNG regasification industry is fairly young. There are only a limited number of companies, including Golar as well as Exmar, Excelerate Energy, and Hoegh LNG that are operating FSRU terminals for LNG importers around the world. In this regard, Golar was the first company to enter into an agreement for the long-term employment of an FSRU based on the conversion of an existing LNG carrier. As of September 2012, there are 14 FSRU vessels in existence with an additional 7 FSRUs under construction. FSRUs can have some potential disadvantages. While FSRUs can have comparable ability to offload cargo from LNG carriers relative to land based terminals, land based terminals typically have greater storage capacity which can facilitate faster cargo offload in a situation when storage tanks are partially full. Land based terminals are also potentially better suited for large gas send out capacity requirements in excess of the capacity of the largest FSRUs Competition LNG carriers and FSRUs While the majority of the existing world LNG carrier fleet is employed on long-term charters, there is competition for the employment of vessels whose charters are expiring and for the employment of vessels which are not dedicated to a long-term contract. Competition for mid- and long-term LNG charters is based primarily on and reputation of the operator and price. In addition, vessels may operate in the emerging LNG carrier spot market that covers short-term charters of one year or less. Recent market developments have seen a considerable tightening in the supply/demand balance leading to a sharp increase in employment and hire rates. Together with Golar the Partnership believes that it is one of the world s largest independent LNG carrier and FSRU owner and operators. The Partnership competes with other independent shipping companies who also own and operate LNG carriers. While there are some barriers to entry, including the cost of an LNG carrier and expertise, new entrants have entered the market over the last five years. In addition to independent LNG operators, some of the major oil and gas producers, including Royal Dutch Shell, BP, and BG own LNG carriers and have in the recent past contracted for the construction of new LNG carriers. National gas and shipping companies also have large fleets of LNG vessels that have expanded and will likely continue to expand. These include Malaysian International Shipping Partnership, or MISC, National Gas Shipping Partnership located in Abu Dhabi and Qatar Gas Transport Partnership, or Nakilat. FSRUs are in an early stage of their commercial development and thus there is less competition in that market than in the more mature commercial market of LNG carriers. There are currently a very limited number of FSRU owner / operators, in addition to the Partnership, made up of Excelerate Energy, an Exmar/Teekay joint venture, and Hoegh LNG The Partnership s fleet and customers The current fleet of the Partnership consists of: the Golar Spirit, an FSRU retrofitted in 2007 from an LNG carrier built in 1981 that is currently operating under a time charter that expires in 2018 with Petrobras, the majority state-owned oil and gas Partnership of Brazil; the Golar Winter, an FSRU retrofitted in 2008 from an LNG carrier built in 2004 that is currently operating under a time charter that expires in 2024 with Petrobras; 18

19 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document the Golar Freeze, an FSRU retrofitted in 2010 from an LNG carrier built in 1977 that is currently operating under a time charter that expires in 2020 with DUSUP, the exclusive purchaser of natural gas in Dubai. the NR Satu, an FSRU retrofitted in 2012 from an LNG carrier built in 1977 that is currently operating under a time charter that expires in 2022 with Nusantara Regas; the Methane Princess, an LNG carrier built in 2003 that is currently operating under a time charter that expires in 2024 with BG Group; the Golar Mazo, an LNG carrier built in 2000 that is currently operating under a time charter that expires in 2017 with Pertamina, the state-owned oil and gas Partnership of Indonesia. The Partnership owns a 60% interest in the vessel and Chinese Petroleum Corporation owns the remaining 40%; and the Golar Grand, an LNG carrier built in 2006 that is currently operating under a time charter that expires in 2015, with BG Group. The Partnership intends to leverage its relationship with Golar to make additional accretive acquisitions of FSRUs and LNG carriers with long-term charters from Golar and third parties. For example, pursuant to the omnibus agreement, the Partnership had the right to purchase from Golar the NR Satu, an LNG carrier built in 1977, following the completion of its FSRU retrofitting and acceptance by its charterer. This option was exercised in July FSRUs FSRU Vessel Capacity (cbm) Offtake Capacity (Bcf/d) Year of Delivery Post-Retrofit Charter Commencement Charterer Charter Expiration Golar Spirit , July 2008 Petrobras 2018 Golar Winter , September 2009 Petrobras 2024 none NR Satu , May 2012 Golar Freeze , Total Capacity , Nusantara Regas May 2010 DUSUP 2020 Charter Extension Option Periods Three years plus two years Terms extending up to 2025 Terms extending up to 2025(1) (1) DUSUP has the option to extend the charter for two extension periods of two years and two years. DUSUP has an option to extend the initial term or either of the extension periods by one year. Golar Spirit. The Golar Spirit is operating under a 10-year time charter to Petrobras, which is the largest energy Partnership in Brazil with an integrated structure consisting of oil and oil byproduct exploration, production, refining, marketing, and transportation. Petrobras currently operates the Golar Spirit in northeastern Brazil at the port of Pecem, where it is moored at a jetty in sheltered waters behind a breakwater, delivering regasified LNG through a hard arm connection directly into a pipeline that services base load power generating assets. The Golar Spirit has the ability to operate as a traditional LNG carrier. Golar Winter. The Golar Winter was delivered to Golar in The Golar Winter is currently operating under a 10-year time charter to Petrobras. In January 2012, the Partnership agreed to make certain modifications to the Golar Winter in return for an increase in the charter rate and an extension in the contract term by five years. The Golar Winter utilizes a regasification system able to operate in both open- and closed-loop modes. From the time that it commenced service as an FSRU, the Golar Winter was operated at an island jetty in Guanabara Bay outside Rio de Janeiro where it was moored at a jetty in sheltered waters behind a breakwater, delivering regasified LNG through a hard arm connection directly into a pipeline that services base load power generating assets. In January 2012, Petrobras elected to move the Golar Winter from Rio de Janeiro to Bahia, requiring certain modifications, including the addition of LNG loading arms. The Partnership has agreed to make these modifications which are expected to be completed in the third quarter of 2013 in return for an increase in the charter rate and an extension in the contract term by 5 years. The Golar Winter is employed by Petrobras as an FSRU to service peak load power requirements. 19

20 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document Golar Freeze. The Golar Freeze was delivered to Golar in 1977 and Golar operated the vessel as an LNG carrier until commencement of its retrofitting. The Golar Freeze completed its retrofitting in May 2010 and is currently operating as an FSRU under a time charter with DUSUP, the exclusive purchaser of natural gas in Dubai, that expires in The Golar Freeze is permanently moored alongside a purpose built jetty within the existing Jebel Ali port. The Golar Freeze is capable of storing and delivering regasified LNG to DUSUP for further delivery into the Dubai gas network. The NR Satu is being employed in connection with the West Java FSRU Project in Indonesia and is permanently moored during the charter term at a purpose-built mooring structure located offshore of West Java, Indonesia. The Golar Freeze and the NR Satu were built in 1977 and the Golar Spirit was built in Given these three FSRUs are principally operated in a stationary location and given the non-corrosive nature of LNG, the Partnership believes that their useful post-retrofit service life will each be extended by ten years in excess of their initial 40-year useful life. LNG Carriers The following table provides additional information about the Partnership s three LNG carriers: Capacity Year of Current Charter Charter Extension LNG Carrier (cbm) Delivery Charterer Expiration Option Periods Golar Mazo (1) , Pertamina 2017 Five years plus five years Golar Grand , BG Group (2) Methane Princess , BG Group 2024 Five years plus five years Total Capacity ,700 (1) Chinese Petroleum Corporation holds the remaining 40% interest in the Golar Mazo. (2) In the event that the charterer does not exercise its option to renew the Golar Grand beyond its initial term. The Partnership has an option to require Golar to charter the Golar Grand until October As of 30 September 2012, the Partnership s LNG carriers had an average age of 9.5 years, compared to the world LNG carrier fleet average age of approximately 11 years 3. LNG carriers are generally expected to have a lifespan of approximately 40 years. The Golar Mazo has a Moss containment system, while the Methane Princess and the Golar Grand have a membrane-type cargo containment system. The Partnership s charterers are able to use the Partnership s LNG carriers worldwide or to sublet the vessels to third parties. Golar Mazo. The Golar Mazo is currently chartered to Pertamina. Founded in 1960, Pertamina is the state-owned oil and gas company in Indonesia and one of the world s largest producers and exporters of LNG. Methane Princess. The Methane Princess is currently chartered to BG Group. BG Group engages in exploration and production of gas and oil reserves, export, shipping and import of LNG, pipeline transmission and distribution of gas, and various gaspowered electricity generation projects. BG Group operates in 23 countries on five continents. BG Group operates in the Atlantic Basin, with liquefaction and/or regasification activities on stream or in development in Chile, Egypt, Italy, Nigeria, the United Kingdom and the United States. Golar Grand. The Golar Grand is currently chartered to Methane Services Limited, a subsidiary of BG Group. Golar s Newbuilding Programme Golar has firm contracts for the construction of thirteen newbuilding vessels consisting of eleven LNG carriers and two FSRUs. Five of the newbuilds are due for delivery in 2013 with the rest in 2014 and early Under its agreement with the Partnership Golar is obliged to offer any vessel for which it obtains a contract of 5 years or more to the Partnership for sale FSRU charters The Partnership provides the services of each of the Golar Spirit and the Golar Winter to Petrobras under separate Time Charter Parties (or TCP) and Operation and Services Agreements (or OSAs). The TCPs and OSAs are interdependent and when combined have the same effect as the time charters for the Partnership s 3 Wood McKenzie - The LNG Fleet publication September

21 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document LNG carriers. The services of each of the Golar Freeze and NR Satu are provided under TCPs to DUSUP and Nusantara Regas, respectively. The Golar Spirit, Golar Winter, Golar Freeze and NR Satu charters feature hire and off-hire provisions similar to those provisions in the charters for the Partnership s LNG carriers. The Golar Spirit, Golar Winter, Golar Freeze and NR Satu charters have additional requirements that the vessels are able to receive LNG from another LNG carrier within a specified time and then to discharge regasified LNG at a specified pressure and flow rate LNG Carrier Charters The Partnership provides the LNG marine transportation services of the Golar Mazo, the Methane Princess and the Golar Grand under time charters. A time charter is a contract for the use of the vessel for a fixed period of time at a specified daily rate. Under a time charter, the vessel owner provides crewing and other services related to the vessel s operation, the cost of which is included in the daily rate, and the customer is responsible for substantially all of the vessel voyage costs (including fuel, port and canal fees and LNG boil-off). 21

22 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 8 Organisational structure 8.1 Description of group Golar GP LLC, a Marshall Islands limited liability Partnership, is the general partner of Golar LNG Partners LP. The general partner is a subsidiary of Golar, which is a Bermuda exempted Partnership. The Partnership is a holding entity and conducts its operations and business through subsidiaries to maximize operational flexibility. The following table lists the Partnership s significant subsidiaries and their purpose as of 8 November Unless otherwise indicated, the Partnership owns 100% of each subsidiary. Name Jurisdiction of Incorporation Purpose Golar Partners Operating LLC... Marshall Islands Holding Company Golar LNG Holding Corporation... Marshall Islands Holding Company Golar Maritime (Asia) Inc.... Republic of Liberia Holding Company Oxbow Holdings Inc.... British Virgin Islands Holding Company Faraway Maritime Shipping Company (60% ownership)... Republic of Liberia Owns and operates Golar Mazo Golar Singapore... Singapore Holding company PT Golar Indonesia (1)... Indonesia Owns and operates NR Satu Golar Khannur Corporation... Marshall Islands Holding company Gas Solutions Corporation... Marshall Islands Holding Company Golar LNG 2226 Corporation... Marshall Islands Leases Golar Grand Golar LNG 2215 Corporation... Marshall Islands Leases Methane Princess Golar Spirit Corporation... Marshall Islands Owns Golar Spirit Golar LNG 2220 Corporation... Marshall Islands Leases Golar Winter Golar Freeze Holding Corporation... Marshall Islands Owns Golar Freeze Golar 2226 (UK) Limited... United Kingdom Operates Golar Grand Golar 2215 (UK) Limited... United Kingdom Operates Methane Princess Golar Spirit (UK) Limited... United Kingdom Operates Golar Spirit Golar Winter (UK) Limited... United Kingdom Operates Golar Winter Golar Freeze (UK) Limited... United Kingdom Operates Golar Freeze Golar Servicos de Operacao de Embaracaoes Limited... Brazil Management Company 1) The Partnership holds all of the voting stock and controls all of the economic interest in PT Golar Indonesia (or PTGI) pursuant to a shareholders agreement with the other sole shareholder of PTGI, PT Pesona Sentra Utama (or PT Pesona). PT Pesona holds the remaining 51% interest in the issued share capital of PTGI. 8.2 Dependence upon other entities The Partnership depends on certain affiliates of Golar, including Golar Management and Golar Wilhelmsen, to assist in operating and expanding the Partnership s business and providing interim financing for certain vessel acquisitions. The ability to enter into new charters and expand customer relationships will depend largely on the Partnership s ability to leverage its relationship with Golar and its reputation and relationships in the shipping industry. If Golar suffers material damage to its reputation or relationships, it may harm the Partnership s ability to: renew existing charters upon their expiration; obtain new charters; successfully interact with shipyards; obtain financing on commercially acceptable terms; maintain access to capital under Golar s $20 million revolving credit facility; or maintain satisfactory relationships with suppliers and other third parties. Rights of first offer on vessels In connection with the Partnerships s initial public offering in April 2011, the Partnership entered into an Omnibus agreement with Golar and certain of its affiliates, its general partner. Under the Omnibus Agreement, the Partnership has the option to purchase from Golar all vessels (including newbuildings upon delivery) that have entered into long-term charters. Golar is incurring all costs for the construction and delivery of thirteen 22

23 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document newbuildings. If Golar fails to make construction payments for these newbuildings, the Partnership could lose the ability to purchase these vessels as a result of such default, which could harm the Partnership s business and reduce its ability to make cash distributions. Refer to section 14 for further discussion as to the significant provisions of the Omnibus agreement. Management agreements Each vessel in the Partnership s fleet is subject to management agreements pursuant to which certain commercial and technical management services are provided by certain affiliates of Golar, including Golar Management and Golar Wilhelmsen. Pursuant to these agreements, these entities provide significant commercial and technical management services for the Partnership s fleet. In addition, pursuant to a management and administrative services agreement between the Partnership and Golar Management, Golar Management provides the Partnership with significant management, administrative, financial and other support services. Operational success and the ability to execute the Partnership s growth strategy depend significantly upon the satisfactory performance of these services. The Partnership s business will be harmed if its service providers fail to perform these services satisfactorily, if they cancel their agreements with the Partnership or if they stop providing these services to the Partnership. Vendor financing arrangements Golar Freeze Vendor Loan - In October 2011, in connection with the purchase of the Golar Freeze, the Partnership entered into a financing loan agreement with Golar for an amount of $222.3 million. The facility was unsecured, non-amortizing with a payment of $222.3 million due October 2014 and bore interest at a fixed rate of interest of 6.75% per annum payable quarterly. This facility was repaid with the net proceeds from the Norwegian Bond Offering in October NR Satu Vendor Loan - In July 2012, in connection with the purchase of the NR Satu, the Partnership entered into a financing loan facility with Golar for an amount of $175 million. In July 2012, the Partnership drew down $155 million from the facility. The facility is unsecured, non-amortizing with a payment of $155 million due October 2015 and bears interest at a fixed rate of interest of 6.75% per annum payable quarterly. Senior Unsecured Norwegian Bonds As of the current date, Golar holds $35 million of Norwegian Bonds in the Partnership. Further details of the bonds are given in section Golar Grand Option In connection with the Golar Grand Acquisition, the Partnership entered into an option agreement with Golar pursuant to which the Partnership will have the option to require Golar to charter the Golar Grand in the event Methane Services Limited does not renew the Golar Grand charter beyond its initial term. In the event that the Partnership exercises this option, the hire rate payable by Golar will be approximately 75% of the hire rate that would have been payable by Methane Services Limited under the Golar Grand charter. The new charter with Golar would expire in October $20 million revolving credit facility In April 2011, the Partnership entered into a $20.0 million revolving credit facility with Golar. The facility matures in December 2014 and is unsecured and interest-free. However, as of the current date the Partnership has not borrowed under the facility. Conflicts of interest Currently all of the Partnership s current executive officers and four of the Partnership s current directors also serve as executive officers or directors of Golar LNG Limited, Golar Management or Golar Wilhelmsen. Please read Section 10.2 for discussion of conflicts of interest. 23

24 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 9 Trend information General trend information Historically charter hire rates for LNG carriers have been uncertain and volatile as has the supply and demand for LNG carriers. Since 2004, there has been an oversupply of LNG ships, however, this oversupply has been falling since the second half of 2010 and the trend has reversed, such that the demand for LNG shipping is currently not being met as a result of the lack of availability of ships. This is primarily due to the lack of newbuilding orders placed during the years 2008 to 2010, partly as a result of the economic downturn. As a result, the increase in demand for, and supply of, LNG is not being met by new shipping tonnage, and has led to strong demand for LNG ships resulting in higher than average charter rates. Please see section 7 entitled Business Overview for detail. Acquisition of vessels Since its IPO in April 2011, Golar Partners has completed three accretive acquisitions from Golar, relating to the Golar Freeze, the NR Satu and the Golar Grand. 9.1 Statement of no material adverse change There has been no material adverse change in the prospects of the Partnership since the date of its last published audited financial statements. 24

25 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 10 Administrative, management and supervisory bodies 10.1 Information about persons Board of directors The table below set out the names of the board of directors of the Partnership: Name Position Business address Tor Olav Trøim Chairman Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda Kate Blankenship Director and Audit Committee Member Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda Hans Petter Aas Director and Audit Committee Member Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda Paul Leand Jr. Director and Conflicts Committee Member Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda Carl Steen Director and Conflicts Committee Member Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda Bart Veldhuizen Director, Audit and Conflicts Committee Member Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda Georgina Souza Director and Secretary Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda Tor Olav Trøim has served on the board of directors since his appointment in January Mr. Trøim is also a director of Golar. Mr. Trøim was appointed Chairman of the board of directors in March Mr. Trøim graduated as M.Sc Naval Architect from the University of Trondheim, Norway in His careers include Portfolio Manager Equity in Storebrand ASA ( ), and Chief Executive Officer for the Norwegian Oil Company DNO AS ( ). Since 1995 Mr. Trøim has been a Director of Seatankers Management in Cyprus. Mr. Trøim serves as a director of and Chairman of Independent Tankers Corporation Limited (or ITCL), a director of Seadrill Limited (or Seadrill), Golden Ocean Group Limited (or Golden Ocean), Golden State Petro (IOM I-A) Plc, Archer Limited and as an alternate director of Frontline Ltd (or Frontline). Kate Blankenship has served on the board of directors since her appointment in September Ms. Blankenship has served as a director of Golar since July Ms. Blankenship also served as Company Secretary of Golar from its inception in 2001 until November Ms. Blankenship has also been a director of Frontline since August 2003 and served as Chief Accounting Officer and Secretary of Frontline from 1994 and October Ms. Blankenship has served as a director of NYSE-listed Ship Finance International Limited (or Ship Finance) since July 2003, Seadrill since May 2005, Golden Ocean since November 2004 and Archer Limited since August She is a member of the Institute of Chartered Accountants in England and Wales. Hans Petter Aas has served on the board of directors since March Mr. Aas has served as a director of Golar since September Mr. Aas has had a long career as a banker in the international shipping and offshore market, and retired from his position as Global Head of the Shipping, Offshore and Logistics Division of DnB NOR in August He joined DnB NOR (then Bergen Bank) in 1989, and has previously worked for the Petroleum Division of the Norwegian Ministry of Industry and the Ministry of Energy, as well as for Vesta Insurance and Nevi Finance. Mr. Aas is also a director and Chairman of Ship Finance and Knutsen Offshore Tanker Co ASA and has recently become a director of the Norwegian Export Credit Guaranty Institute. Paul Leand Jr. has served on the board of directors since March Mr. Leand has been a Director of Ship Finance since Mr. Leand has served as the Chief Executive Officer and Director of AMA Capital Partners LLC, or AMA, an investment bank specializing in the maritime industry since From 1989 to 1998 Mr. Leand served at the First National Bank of Maryland where he managed its Railroad Division and its International Maritime Division. He has worked extensively in the U.S. capital markets in connection with AMA's restructuring and mergers and acquisitions practices. Mr. Leand serves as a member of American Marine Credit LLC's Credit Committee and served as a member of the Investment Committee of AMA Shipping Fund I, a private equity fund formed and managed by AMA. Mr. Leand holds a BS/BA from Boston University s School of Management and is a director of publicly listed SEA CO LTD and privately held Helm Financial Corporation and GE SEACO SRL. Carl Steen has served on the board of directors since his appointment in August Mr. Steen initially graduated in 1975 from ETH Zurich Switzerland with a M.Sc. in Industrial and Management Engineering. After 25

26 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document working for a number of high profile companies, Mr. Steen joined Nordea Bank from January 2001 to February 2011 as head of the bank's Shipping, Oil Services & International Division. Currently, Mr. Steen holds directorship positions in various Norwegian companies including Wilhelm Wilhelmsen Holding ASA and RS Platou ASA. Bart Veldhuizen has been working in the shipping industry since 1994 on both the banking and non-banking side. From August 2007 until September 2011, he has been the Managing Director & Head of Shipping of Lloyds Banking. In this capacity, Mr. Veldhuizen managed the combined Lloyds Bank and Bank of Scotland's USD 16 billion shipping loan and lease portfolio. He started his career with Van Ommeren Shipping, a Dutch public shipping & storage company after which he joined DVB bank as a shipping banker working in both Rotterdam and Piraeus. In 2000, he joined Smit International, a publicly listed Maritime service provider active in Salvage, Marine Contracting and Harbour Towage. After working for Smit in both Greece and Singapore, Mr. Veldhuizen returned to the Netherlands in August 2003 to work with NIBC Bank, a Dutch based merchant bank. Mr. Veldhuizen holds a degree in Business Economics from the Erasmus University in Rotterdam, the Netherlands. Georgina E. Sousa has served on the board of directors since her appointment in September Ms. Sousa has also served as Company Secretary of Golar and its subsidiaries since 30 November She is also Head of Corporate Administration for Frontline. Up until January 2007, she was Vice-President-Corporate Services of Consolidated Services Limited, a Bermuda Management Company having joined the firm in 1993 as Manager of Corporate Administration. From 1976 to 1982 she was employed by the Bermuda law firm of Appleby, Spurling & Kempe as a Company Secretary and from 1982 to 1993 she was employed by the Bermuda law firm of Cox & Wilkinson as Senior Company Secretary. Management The table below set out the names of the members of the Management of the Partnership: Name Position Business address Graham Robjohns Chief Executive Officer 13 th Floor, One America Square, 17 Crosswall, London EC3N 2LB, United Kingdom Brian Tienzo Principal Financial & Accounting Officer 13 th Floor, One America Square, 17 Crosswall, London EC3N 2LB, United Kingdom. Oistein Dahl Chief Operating Officer 13 th Floor, One America Square, 17 Crosswall, London EC3N 2LB, United Kingdom. Graham Robjohns has acted as the Principal Executive Officer of the Partnership since July From April 2011 to July 2011, Mr. Robjohns served as Chief Executive Officer and Chief Financial Officer. Mr. Robjohns served as the Chief Financial Officer of Golar Management from November 2005 until June Mr. Robjohns also served as Chief Executive Officer of Golar LNG Management from November 2009 until July Mr. Robjohns served as Group Financial Controller of Golar Management from May 2001 to November 2005 and as Chief Accounting Officer of Golar Management from June 2003 until November He was the Financial Controller of Osprey Maritime (Europe) Ltd from March 2000 to May From 1992 to March 2000 he worked for Associated British Foods Plc. and then Case Technology Ltd (Case), both manufacturing businesses, in various financial management positions and as a director of Case. Prior to 1992, Mr. Robjohns worked for PricewaterhouseCoopers in their corporation tax department. He is a member of the Institute of Chartered Accountants in England and Wales. Brian Tienzo has acted as the Principal Financial and Accounting Officer of the Partnership since July Mr. Tienzo was Controller from April 2011 until July Mr. Tienzo has also served as the Chief Financial Officer of Golar Management since July 2011 and as the Group Financial Controller of Golar Management since Mr. Tienzo joined Golar Management in February 2001 as the Group Management Accountant. From 1995 to 2001 he worked for Z-Cards Europe Limited, Parliamentary Communications Limited and Interoute Communications Limited in various financial management positions. He is a member of the Association of Certified Chartered Accountants. Oistein Dahl is the Chief Operating Officer of the Partnership and the Managing Director of Golar Wilhelmsen Management (Golar Wilhelmsen or GWM). GWM is Golar's own technical management company and is a joint venture (owned 60% by Golar) with Wilhelmsen Ship Management. Mr. Dahl started in Golar in September He comes from Höegh Fleet, where he was President for four years. He has served in Höegh for several years and has had several positions within vessel management, newbuilding and projects, as well as business 26

27 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document development. Mr. Dahl has also worked within offshore engineering and with the Norwegian Class Society DNV. Mr. Dahl has a MSc degree from the NTNU technical university in Trondheim Administrative, management and supervisory bodies conflicts of interest Both the general partner of the Partnership and the Partnership s directors have a legal duty to manage the Partnership in a manner beneficial to its unitholders, subject to certain limitations. This legal duty is commonly referred to as a "fiduciary duty." The Partnership s directors have fiduciary duties to manage the Partnership in a manner beneficial to the Partnership, its general partner and its limited partners. The Partnership s executive officers are employed by Golar Management and have fiduciary duties to that entity and not to the Partnership. As a result of these relationships, conflicts of interest may arise between the Partnership and its unaffiliated limited partners on the one hand, and Golar LNG Limited and its affiliates, including the Partnership s general partner, on the other hand. The resolution of these conflicts may not be in the best interest of the Partnership or its unitholders. In particular: all of the Partnership s current executive officers and four of the Partnership s current directors also serve as executive officers or directors of Golar LNG Limited, Golar Management or Golar Wilhelmsen; Golar LNG Limited and affiliates may compete with the Partnership, subject to the restrictions contained in the omnibus agreement; and The Partnership has entered into arrangements, and may enter into additional arrangements, with Golar and certain of its subsidiaries, relating to the purchase of additional vessels, the provision of certain services to the Partnership by Golar Management and other matters. In the performance of their obligations under these agreements, Golar and its subsidiaries, other than Golar GP LLC, the general partner of the Partnership, are not held to a fiduciary duty standard of care to the Partnership, the Partnership s general partner or the Partnership s limited partners, but rather to the standard of care specified in these agreements. Other than the above, there are no potential conflicts of interest between any duties to the Partnership of the board of directors or the Partnership s management, and their private interests or other duties. The Partnership has a conflicts committee currently comprising of three members of the board of directors; Paul Leand Jr., Bart Veldhuizen and Carl Steen. The conflicts committee will be available at the board s discretion to review specific matters that the board believes may involve conflicts of interest. The conflicts committee will determine if the resolution of the conflict of interest is fair and reasonable to the Partnership. The members of the conflicts committee may not be officers or employees of the Partnership or directors, officers or employees of the Partnership s general partner or its affiliates, and must meet the independence standards established by the Nasdaq Stock Market LLC to serve on an audit committee of a board of directors and certain other requirements. Any matters approved by the conflicts committee will be conclusively deemed to be fair and reasonable to the Partnership, approved by all of its partners, and not a breach by the Partnership s directors, its general partner or its affiliates of any duties any of them may owe the Partnership or its unitholders. 27

28 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 11 Major shareholders 11.1 Ownership As of 8 November 2012, the outstanding shares of the Partnership s classes of capital was divided into 36,246,149 Common Units representing limited partner interest, 15,949,831 Subordinated Units representing limited partner interests and a 2% general partner interest as of that date. The following table sets forth the beneficial ownership of the Partnership s common units and subordinated units as of 8 November 2012 by each person that the Partnership knows to beneficially own more than 5% of its outstanding common or subordinated units. The number of units beneficially owned by each person is determined under SEC rules and the information is not necessarily indicative of beneficial ownership for any other purpose: Name of Beneficial Owner Common Units Beneficially Owned Subordinated Units Beneficially Owned Percentage of Total Common and Subordinated Units Beneficially Owned Number Percent Number Percent Golar LNG Limited(a)... 11,821, % 15,949, % 53.2% Kayne Anderson Capital Advisors LP(b)... 3,008, % 5.8% a) World Shipholding Ltd., the company that is the main shareholder of Golar, is indirectly controlled by trusts established by John Fredriksen, Chairman of the Board of Directors of Golar, for the benefit of his immediate family. Amounts exclude the 2.0% general partner interest held by our general partner, a wholly-owned subsidiary of Golar. The address of World Shipholding's principal place of business is P.O. Box 53562, CY3399 Limassol, Cyprus. b) Based solely on information contained in a Schedule 13G/A filed on 9 August 2012 by Kayne Anderson Capital Advisors LP. The address of Kayne Anderson Capital Advisors LP is 1800 Avenue of the Stars, Second Floor, Los Angeles CA Change in control of the issuer There are no arrangements, known to the Partnership, the operation of which may at a subsequent date result in a change in control of the Partnership. 28

29 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 12 Selected financial information concerning the Partnership's assets and liabilities, financial position and profits and losses 12.1 Historical Financial Information The consolidated and combined financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Investments in entities in which the Partnership directly or indirectly holds more than 50% of the voting control are consolidated in the financial statements, as well as certain variable interest entities in which the Partnership is deemed to be subject to a majority of the risk of loss from the variable interest entity s activities or entitled to receive a majority of the entity s residual returns, or both. All intercompany balances and transactions are eliminated. The non-controlling interests of the above mentioned subsidiaries are included in the Balance Sheets and Statements of Operations as Non-controlling interests. The Partnership accounts for the acquisition of interests in vessels from Golar as a transfer of a business between entities under common control. The method of accounting for such transfers is similar to the pooling of Interests method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity is carried forward to the balance sheet of the combined entity, and no other assets or liabilities are recognized as a result of the combination. The excess of the proceeds paid, if any, by the Partnership over Golar s historical cost is accounted for as an equity distribution to Golar. In addition, transfers of net assets between entities under common control are accounted for as if the transfer occurred from the date that the Partnership and the acquired vessels were both under the common control of Golar and had begun operations. As a result, the Partnership s financial statements prior to the date the interests in these vessels were actually acquired by the Partnership are retroactively adjusted to include the results of these vessels during the periods they were under common control of Golar. As a result, the Partnership s applicable combined and consolidated financial statements reflect the vessels and their results of operations, referred to as either the Combined Entity or in the case of acquisitions subsequent to the Partnership s initial public offering in April 2011, the Dropdown Predecessor, as if we had acquired them when the vessels began operations under the ownership of Golar. A summary of the Partnership's significant accounting policies is set forth in Note 2 of the Notes to the Audited Consolidated and Combined Carve-Out Financial Statements in the Partnership s Annual Report of 2011, pages F-9 F-14. According to the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council, information in a registration document may be incorporated by reference. The following financial statements are incorporated by reference. Reference is made to the Quarterly Report 3Q 2012 (unaudited), Quarterly Report 2Q 2012 (unaudited), Quarterly Report 1Q 2012 (unaudited) and the Annual Report of 2011 and the U.S Registration Statement on Form F-1 dated 7, April See Cross Reference List for complete internet-addresses. Golar LNG Partners LP Consolidated and Combined Carve-out Financial Statements Quarterly Report (unaudited) Annual Report U.S. Registration Statement Q Q Q Page(s) Page(s) Page(s) Page(s) Page(s) Consolidated and combined carve-out statements for operations Consolidated and combined carve-out balance sheet Consolidated and combined carve-out F-3 F-2 5 F-5 F-4 6 F-6 F-5 29

30 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document statements of cash flow Notes to the audited consolidated and combined carve-out financial statements F-8 F-34 F-7 F Financial statements See section 12.1 Historical Financial Information Auditing of historical annual financial information Statement of audited historical financial information The historical annual financial information for 2010 and 2011 has been audited. Reports of the Partnership's current independent public accounting firm is included in the Annual Report of 2011, page F-2, and the U.S Registration Statement on Form F-1, page F Other audited information No other information in this Registration Document has been audited Source of financial data The financial data set forth in the Quarterly Report 3Q 2012, 2Q 2012 and 1Q 2012 have not been audited Age of latest financial information Latest year of audited financial information The latest year of audited financial information is Legal and arbitration proceedings From time to time the Partnership has been, and expects to continue to be, subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. These claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. The Partnership is not aware of any legal proceedings or claims that the Partnership believes will have, individually or in the aggregate, a material adverse effect on the Partnership. There are no further governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past, significant effects on either the Partnership s or the group s financial position or profitability Significant change in the Partnership's financial or trading position Except for those changes described further below, there have been no other significant changes in the financial or trading position of the group since the end of the last financial period for which interim financial information has been published. Golar Grand Acquisition Refer to section for detail of the Golar Grand Acquisition. November 2012 Equity Offerings On 7 November 2012, the Partnership sold 4,300,000 common units in a public offering at a price of $30.50 per unit, raising net proceeds of $130.5 million. Golar GP LLC, the Partnership s general partner, contributed an additional $3.6 million to the Partnership to maintain its 2.0% general partner interest in the Partnership. The Partnership also sold 1,524,590 common units in a concurrent private placement to Golar at a price of $30.50 per 30

31 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document common unit, raising gross proceeds of $46.5 million. Accordingly, the Partnership raised total net proceeds of approximately $181 million. Quarterly Cash Distribution On 22 October 2012, the Partnership declared a quarterly cash distribution of $0.475 per unit ($22.5 million in the aggregate) for the three months ended 30 September 2012 payable on 15 November 2012 to all unitholders of record as of the close of business on 2 November Senior Unsecured Norwegian Bonds On 12 October 2012, Golar Partners issued NOK 1,300 million senior unsecured bonds that mature in October The aggregate principal amount of the bonds is equivalent to approximately $227 million. All interest and principal payments on the bonds will be swapped into U.S. dollars including fixing interest payments at 6.485%. The net proceeds from the bonds of approximately $224 million were used to repay the balance of $222.3 million on the Golar LNG Freeze 6.75% Vendor loan originally due October 2014 from Golar that was utilized to purchase the Golar Freeze. The remainder of the net proceeds was used for general partnership purposes. 31

32 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 13 Third party information and statement by experts and declarations of any interest Part of the information given in this Registration document has been sourced from third parties as stated below. The Partnership hereby confirms that this information has been accurately reproduced and that as far as the Partnership is aware and is able to ascertain from information published by the companies below, no facts have been omitted which would render the reproduced information inaccurate or misleading. Kind of information Name of third party Chapter 7 Business overview Chapter 7 Business Overview Poten & Partners (UK) Limited Business address Qualifications Material interest in the Partnership Viewpoint 20 Balderton Street, London W1K 6TL. Wood MacKenzie Exchange Place 2, 5 Semple Street, Edinburgh EH3 8BL. Research Services Research Services None None 14 Material contracts The following is a summary of material contracts that are not entered into in the ordinary course of the Partnership's business, which could result in the Partnership being under an obligation or entitlement that is material to its ability to meet its obligations to security holders: 1. Credit facility agreement dated 29 September 2008 providing for a Senior Secured Revolving Credit Facility by and among Golar LNG Partners L.P. (as borrower) and the Banks and Financial Institutions Referred to therein (as lenders). In September 2008, the Partnership entered into a revolving credit facility with a banking consortium to refinance existing loan facilities in respect of two of its vessels, the Methane Princess and the Golar Spirit (or the Golar LNG Partners credit facility). The loan is secured against the Golar Spirit and assignment to the lending bank of a mortgage given to the Partnership by the lessors of the Methane Princess and the Golar Spirit, with a second priority charge over the Golar Mazo. The Golar LNG Partners credit facility accrues floating interest at a rate per annum equal to LIBOR plus a margin. 2. Omnibus Agreement dated 13 April 2011, by and among Golar LNG Ltd., Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited. 3. Amendment No. 1 to Omnibus Agreement, dated 5 October 2011 by and among Golar LNG Ltd., Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited. The following discussion describes certain provisions of the omnibus agreement, as amended: Noncompetition. Under the omnibus agreement, Golar agreed, and caused its controlled affiliates (other than the Partnership, its general partner and its subsidiaries) to agree, not to acquire, own, operate or charter any FSRU or LNG carrier operating under a charter for five or more years. These vessels, together with any related charters, are referred here as Five-Year Vessels and all other FSRUs and LNG carriers, together with any related charters, are referred to as Non-Five-Year Vessels. The restrictions in this paragraph did not prevent Golar or any of its controlled affiliates (other than the Partnership and its subsidiaries) from: a) acquiring, owning, operating or chartering Non-Five-Year Vessels; b) acquiring one or more Five-Year Vessels if Golar promptly offers to sell the vessel to the Partnership for the acquisition price plus any administrative costs (including re-flagging and reasonable legal costs) associated with the transfer to us at the time of the acquisition; c) putting a Non-Five-Year Vessel under charter for five or more years if Golar offers to sell the vessel to us for fair market value (x) promptly after the time it becomes a Five-Year Vessel and (y) at each renewal or extension of that charter for five or more years; d) acquiring one or more Five-Year Vessels as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or chartering those vessels; provided, however, that: (i) if less than a majority of the value of the business or assets acquired is attributable to Five- Year Vessels, as determined in good faith by Golar s board of directors, Golar must offer to sell such vessels to the Partnership for their fair market value plus any additional tax or other similar costs that Golar incurs in connection with the acquisition and the transfer of such vessels to us separate from the acquired business; and (ii) if a majority or more of the value of the business or assets acquired is attributable to Five- Year Vessels, as determined in good faith by Golar s board of directors, Golar must notify the Partnership of the proposed acquisition in advance. Not later than 10 days following 32

33 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document receipt of such notice, the Partnership will notify Golar if it wishes to acquire such vessels in cooperation and simultaneously with Golar acquiring the Non-Five-Year Vessels. If the Partnership does not notify Golar of its intent to pursue the acquisition within 10 days, Golar may proceed with the acquisition and then offer to sell such vessels to the Partnership as provided in (i) above; (e) acquiring a non-controlling interest in any company, business or pool of assets; (f) acquiring, owning, operating or chartering any Five-Year Vessel if the Partnership does not fulfill its obligation to purchase such vessel in accordance with the terms of any existing or future agreement; (g) acquiring, owning, operating or chartering a Five-Year Vessel subject to the offers to the Partnership described in paragraphs (b), (c) and (d) above pending our determination whether to accept such offers and pending the closing of any offers the Partnership accept; (h) providing ship management services relating to any vessel; or (i) acquiring, owning, operating or chartering a Five-Year Vessel if the Partnership has previously advised Golar that it consents to such acquisition, operation or charter. If Golar or any of its controlled affiliates (other than the Partnership or its subsidiaries) acquires, owns, operates or charters Five-Year Vessels pursuant to any of the exceptions described above, it may not subsequently expand that portion of its business other than pursuant to those exceptions. In addition, under the omnibus agreement the Partnership and its affiliates may not acquire, own, operate or charter Five-Year Vessels only. The restrictions in this paragraph will not: 1) prevent the Partnership from owning, operating or chartering any Non-Five-Year Vessel that was previously a Five-Year Vessel while owned by the Partnership; 2) prevent the Partnership or any of its subsidiaries from acquiring Non-Five-Year Vessels as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or chartering those vessels; provided, however, that: (a) if less than a majority of the value of the business or assets acquired is attributable to Non-Five-Year Vessels, as determined in good faith by us, the Partnership must offer to sell such vessels to Golar for their fair market value plus any additional tax or other similar costs that the Partnership incurs in connection with the acquisition and the transfer of such vessels to Golar separate from the acquired business; and (b) if a majority or more of the value of the business or assets acquired is attributable to Non-Five-Year Vessels, as determined in good faith by the Partnership, it must notify Golar of the proposed acquisition in advance. Not later than 10 days following receipt of such notice, Golar must notify the Partnership if it wishes to acquire the Non-Five- Year Vessels in cooperation and simultaneously with the Partnership acquiring the Five-Year Vessels. If Golar does not notify the Partnership of its intent to pursue the acquisition within 10 days, the Partnership may proceed with the acquisition and then offer to sell such vessels to Golar as provided in (a) above; prevent the Partnership or any of its subsidiaries from acquiring, owning, operating or chartering any Non-Five-Year Vessels subject to the offer to Golar described in paragraph (2) above, pending its determination whether to accept such offer and pending the closing of any offer it accepts; or prevent the Partnership or any of our subsidiaries from acquiring, owning, operating or chartering Non-Five-Year Vessels if Golar has previously advised the Partnershipthat it consents to such acquisition, ownership, operation or charter. If the Partnership or any of its subsidiaries acquires, owns, operates or charters Non-Five-Year Vessels pursuant to any of the exceptions described above, neither the Partnership nor such subsidiary may subsequently expand that portion of the Partnership s business other than pursuant to those exceptions. Upon a change of control of the Partnership or its general partner, the noncompetition provisions of the omnibus agreement will terminate immediately. Upon a change of control of Golar, the noncompetition provisions of the omnibus agreement applicable to Golar will terminate at the time that is the later of the date of the change of control and the date on which all of our outstanding subordinated units have been converted to common units. 33

34 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document Rights of First Offer on FSRUs and LNG carriers. Under the omnibus agreement, the Partnership and its subsidiaries granted to Golar a right of first offer on any proposed sale, transfer or other disposition of any Five-Year Vessels or Non-Five-Year Vessels owned by the Partnership and its subsidiaries. Under the omnibus agreement, Golar and its subsidiaries granted a similar right of first offer to the Partnership for any Five-Year Vessels they might own. These rights of first offer do not apply to a (a) sale, transfer or other disposition of vessels between any affiliated subsidiaries, or pursuant to the terms of any current or future charter or other agreement with a charter party or (b) merger with or into, or sale of substantially all of the assets to, an unaffiliated third-party. Prior to engaging in any negotiation regarding any vessel disposition with respect to a Five-Year Vessel with a non-affiliated third-party or any Non-Five-Year Vessel, the Partnership or Golar will deliver a written notice to the other relevant party setting forth the material terms and conditions of the proposed transaction. During the 30-day period after the delivery of such notice, the Partnership and Golar will negotiate in good faith to reach an agreement on the transaction. If no agreement is reached within such 30-day period, the Partnership or Golar, as the case may be, will be able within the next 180 calendar days to sell, transfer, dispose or re-charter the vessel to a third party (or to agree in writing to undertake such transaction with a third party) on terms generally no less favorable to the Partnership or Golar, as the case may be, than those offered pursuant to the written notice. Upon a change of control of the Partnership or its general partner, the right of first offer provisions of the omnibus agreement will terminate immediately. Upon a change of control of Golar, the right of first offer provisions applicable to Golar under the omnibus agreement will terminate at the time that is the later of the date of the change of control and the date on which all of the Partnership s outstanding subordinated units have converted to common units. Indemnification. Under the omnibus agreement, Golar agreed to indemnify the Partnership for a period of five years after its initial public offering (and for a period of at least three years after the purchase of the NR Satu) against certain environmental and toxic tort liabilities with respect to the assets contributed or sold to the Partnership to the extent arising prior to the time they were contributed or sold to the Partnership. Liabilities resulting from a change in law after the closing of the Partnership s initial public offering are excluded from the environmental indemnity. There is an aggregate cap of $5.0 million on the amount of indemnity coverage provided by Golar for environmental and toxic tort liabilities. No claim may be made unless the aggregate dollar amount of all claims exceeds $500,000, in which case Golar is liable for claims only to the extent such aggregate amount exceeds $500,000. Golar will also indemnify the Partnership for liabilities related to: certain defects in title to the assets contributed or sold to the Partnership and any failure to obtain, prior to the time they were contributed to the Partnership, certain consents and permits necessary to conduct its business, which liabilities arise within three years after the closing of the Partnership s initial public offering (or, in the case of the Nusantara Regas Satu, within three years after the purchase of the NR Satu); certain income tax liabilities attributable to the operation of the assets contributed or sold to the Partnership prior to the time they were contributed or sold; and any liabilities in excess of our scheduled payments under the UK tax lease used to finance the Methane Princess, including liabilities in connection with termination of such lease. 4. First Amended and Restated Management and Administrative Services Agreement between Golar LNG Partners LP and Golar Management Limited. In connection with the Partnership s initial public offering, the Partnership entered into a management and administrative services agreement (as amended and restated, the management and administrative services agreement) with Golar Management, pursuant to which Golar Management agreed to provide certain management and administrative support services to the Partnership. As of 1 July 2011, the Partnership and Golar Management entered into an amended and restated management and administrative services agreement to reflect changes in the titles of certain of the Partnership s officers. The material provisions of the amended and restated management and administrative services agreement, including terms related to the Partnership s obligations and the obligations of Golar Management to provide the Partnership with services, remain unchanged from those contained in the management and administrative services agreement entered into at the time of the initial public offering of the Partnership. 5. Contribution and Conveyance Agreement, dated as of 5 April 2011, among Golar LNG Limited, Golar GP LLC, Golar LNG Partners LP, Golar LNG Holding Co., and Golar Partners Operating LLC, pursuant to which, among other things, Golar contributed interests in certain vessels in the Partnership s initial fleet to the Partnership in connection with the Partnership s initial public offering. 34

35 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document 6. $20.0 Million Revolving Credit Agreement by and between Golar LNG Partners LP and Golar LNG Limited. In connection with the Partnership s initial public offering, the Partnership entered into a $20.0 million revolving credit facility (or the sponsor credit facility) with Golar, to be used to fund the Partnership s working capital requirements. The facility has a term of four years and is interest-free and unsecured. As of 30 September 2012, the Partnership had not borrowed under the facility. 7. Purchase, Sale and Contribution Agreement, dated 5 October 2011, by and between the Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for, among other things, the acquisition of the Golar Freeze. 8. Loan Agreement, dated 18 October 2011, by and between Golar LNG Limited as the lender and Golar LNG Partners LP as the borrower. In connection with the Partnership s acquisition of the Golar Freeze from Golar in October 2011, the Partnership entered into a financing loan agreement with Golar for an amount of $222.3 million (or the Golar Freeze vendor loan). The Golar Freeze vendor loan is unsecured and bears interest at a fixed rate of 6.75% per annum and interest payments are quarterly over three years with a final balloon payment of $222.3 million due in October The balance outstanding on the loan was repaid with the proceeds from the Norwegian Bond Offering in October Purchase, Sale and Contribution Agreement, dated 9 July 2012, by and between the Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for, among other things, the acquisition of the NR Satu. 10. Loan Agreement, dated 19 July 2012, by and between Golar LNG Limited as the lender and Golar LNG Partners LP as the borrower. In connection with the Partnership s acquisition of the NR Satu from Golar in July 2012, the Partnership entered into a financing loan agreement with Golar for an amount of $155 million (or the NR Satu vendor loan). The NR Satu vendor loan is unsecured and bears interest at a fixed rate of 6.75% per annum and interest payments are quarterly over three years with a final balloon payment $155 million due in July Option Agreement dated 1 November 2012, by and between Golar LNG Partners and Golar LNG Limited. dated 19 July 2012, by and between Golar LNG Partners LP and Golar LNG Limited. In connection with the acquisition of the Golar Grand in November 2012 from Golar LNG Limited, the Partnership entered into an option agreement with Golar LNG Limited. In the event that the charterer Methane Services Limited does not renew the Golar Grand charter beyond March 2015, then the Partnership has the option to require Golar LNG Limited to charter the Golar Grand for approximately 75% of the hire rate that would have been payable by Methane Services Limited. The charter with Golar LNG Limited would expire in March Documents on display The following documents (or copies thereof) may be inspected for the life of the Registration Document at the headquarters of the Partnership, Par-la-Ville Place, 14 Par-la- Ville Road, Hamilton HM 08, Bermuda: (a) (b) (c) certificate of limited partnership and partnership agreement of the Partnership; all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the Partnership's request, any part of which is included or referred to in the Registration Document; the historical consolidated and combined financial information of the Partnership and its subsidiaries for each of the two financial years preceding the publication of the Registration Document. 35

36 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document Cross Reference List Reference in Registration Document 13.1 Historical Financial Information for the Partnership Report of Independent Registered Public Accounting Firm Refers to Quarterly Report 3Q 2012, available at pdf Quarterly Report 2Q 2012, available at pdf Quarterly Report 1Q 2012, available at pdf Annual Report 2011, available at 1_Annual_Report_Form_20-F.pdf U.S Registration Statement on Form F-1, available at B4_Prospectus.pdf Annual Report 2011, available at 1_Annual_Report_Form_20-F.pdf U.S. Registration Statement on Form F-1, available at B4_Prospectus.pdf Details Consolidated and combined carve-out statements for operations, page 5 Consolidated and combined carve-out balance sheet, page 6 Consolidated and combined carve-out statements of cash flow, page 7 Consolidated and combined carve-out statements for operations, page 4 Consolidated and combined carve-out balance sheet, page 5 Consolidated and combined carve-out statements of cash flow, page 6 Consolidated and combined carve-out statements for operations, page 4 Consolidated and combined carve-out balance sheet, page 5 Consolidated and combined carve-out statements of cash flow, page 6 Consolidated and combined carve-out statements for operations, page F-3 Consolidated and combined carve-out balance sheet, page F-5 Consolidated and combined carve-out statements of cash flow, page F-6 Notes to the audited consolidated and combined carveout financial statements, page F-8 F-34 Consolidated and combined carve-out statements for operations, page F-2 Consolidated and combined carve-out balance sheet, page F-4 Consolidated and combined carve-out statements of cash flow, page F-5 Notes to the audited consolidated and combined carveout financial statements, page F-7 F-34 Auditors report, page F-2 Auditors report, page F-1 36

37 Golar LNG Partners LP, prospectus of 6 December 2012 Registration Document Joint Lead Managers' disclaimer DNB Bank ASA and Nordea Bank Norge ASA, the Joint Lead Managers, have assisted the Partnership in preparing the Registration Document. The Joint Lead Managers have not verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and the Joint Lead Managers expressly disclaim any legal or financial liability as to the accuracy or completeness of the information contained in this Registration Document or any other information supplied in connection with the issuance or distribution of bonds by Golar LNG Partners LP. This Registration Document is subject to the general business terms of the Joint Lead Managers, available at their respective websites. Confidentiality rules and internal rules restricting the exchange of information between different parts of the Joint Lead Managers may prevent employees of the Joint Lead Managers who are preparing this Registration Document from utilizing or being aware of information available to the Joint Lead Managers and/or any of their affiliated companies and which may be relevant to the recipient's decisions. Each person receiving this Registration Document acknowledges that such person has not relied on the Joint Lead Managers, nor on any person affiliated with it in connection with its investigation of the accuracy of such information or its investment decision. Oslo (Norway), 6 December 2012 DNB Bank ASA Nordea Bank Norge ASA Annex I Golar LNG Partners LP 37

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