You should rely only on the information contained in this prospectus or in any free writing prospectus we may authorize to be delivered to you. We have not, and the underwriters have not, authorized any other person to provide you with information different from that contained in this prospectus and any free writing prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. You should not assume that the information contained in this registration statement is accurate as of any date other than the date on the front cover of this registration statement. Our business, financial condition, results of operations and prospects may have changed since such dates. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted.

This prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. Please read “Risk Factors” and “Forward-Looking Statements.”

Common shares may be offered or sold in Bermuda only in compliance with the provisions of the Investment Business Act of 2003 and the Exchange Control Act 1972, and related regulations of Bermuda which regulate the sale of securities in Bermuda. In addition, specific permission is required from the Bermuda Monetary Authority, or the BMA, pursuant to the provisions of the Exchange Control Act 1972 and related regulations, for all issuances and transfers of securities of Bermuda companies, other than in cases where the BMA has granted a general permission. The BMA, in its policy dated June 1, 2005, provides that where any equity securities, including our common shares, of a Bermuda company are listed on an appointed stock exchange, general permission is given for the issue and subsequent transfer of any securities of a company from and/or to a non-resident, for as long as any equities securities of such company remain so listed. The Nasdaq Global Select Market is an appointed stock exchange under Bermuda law. Approvals or permissions given by the Bermuda Monetary Authority do not constitute a guarantee by the Bermuda Monetary Authority as to our performance or our creditworthiness. Accordingly, in granting such permission, the BMA accepts no

responsibility for our financial soundness or the correctness of any of the statements made or expressed in this prospectus or any prospectus supplement. Neither this prospectus nor any prospectus supplement needs to be filed with the Registrar of Companies in Bermuda in accordance with Part III of the Companies Act 1981 of Bermuda (the “Companies Act”) pursuant to provisions incorporated therein following the enactment of the Companies Amendment Act 2013. Such provisions state that a prospectus in respect of the offer of shares in a Bermuda company whose equities are listed on an appointed stock exchange under Bermuda law does not need to be filed in Bermuda, so long as the company in question complies with the requirements of such appointed stock exchange in relation thereto.

The BMA and the Registrar of Companies accept no responsibility for the financial soundness of any proposal or for the correctness of any of the statements made or opinions expressed in this prospectus.

The data included in this prospectus regarding the industries in which we operate, including trends in the market and our position and the position of our competitors, is based on a variety of sources, including independent industry publications, government publications and other published independent sources, information obtained from customers, distributors, suppliers, trade and business organizations and publicly available information (including the reports and other information our competitors file with the Securities and Exchange Commission (the “SEC”), which we did not participate in preparing and as to which we make no representation), as well as our good-faith estimates, which have been derived from management’s knowledge and experience in the industries in which we operate. Estimates of market size and relative positions in a market are difficult to develop and inherently uncertain. Accordingly, investors should not place undue weight on the industry and market share data presented in this prospectus.

Unless the context otherwise requires, references in this prospectus to the following terms have the meanings set forth below:

In addition, we have provided definitions of some of the terms we use to describe our business and industry and other terms used in this prospectus in the “Glossary” on page A-1 of this prospectus.

This is the initial public offering of Hygo. Historically, Hygo’s revenues have been derived primarily from its wholly owned liquefied natural gas (“LNG”) carriers. Hygo’s assets also include a Floating Storage and Regasification Unit (“FSRU”) as well as equity interests in non-controlled and non-consolidated joint ventures, including CELSEPAR and CELBA. Because we generally have between 20% and 50% of the voting rights and do not exercise control, or have the power to control, the financial and operational policies of these entities, our investment in these entities are accounted for by the equity method of accounting. Pursuant to Rule 3-09 of Regulation S-X, we are required to include separate audited financial statements for significant investments in entities that are accounted for under the equity method of accounting (“3-09 Financial Statements”). As of December 31, 2019, we owned interests in one significant investment, CELSEPAR. As our projects mature, we may present 3-09 Financial Statements for other significant equity investments.

In addition, we qualify as a “foreign private issuer” as defined under SEC rules. As such, we are exempt from certain SEC rules that are applicable to U.S. domestic public companies, including the rules requiring domestic filers to issue financial statements prepared under U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). We have elected to present Hygo’s consolidated financial statements in accordance with U.S. GAAP. However, the 3-09 Financial Statements for our investment in CELSEPAR have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”), and we are not required to, and do not, reconcile the 3-09 Financial Statements to U.S. GAAP.

Further, the financial information contained in this prospectus includes both Brazilian real amounts and U.S. dollar amounts. Certain other information presented in this prospectus have been presented in the currency rounded to the nearest whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column in certain tables in this prospectus. In addition, certain percentages presented in this prospectus reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers or may not sum due to rounding.

This prospectus and other offering materials include forward-looking statements regarding, among other things, our plans, strategies, prospects and projections, both business and financial. All statements contained in this prospectus other than historical information are forward-looking statements that involve known and unknown risks and relate to future events, our future financial performance or our projected business results. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “targets,” “potential” or “continue” or the negative of these terms or other comparable terminology. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual events or results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated by us include:

When considering forward-looking statements, you should keep in mind the risks set forth under the heading “Risk Factors” and other cautionary statements included in this prospectus. The cautionary statements referred to in this section also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. We undertake no duty to update these forward-looking statements, even though our situation may change in the future. Furthermore, we cannot guarantee future results, events, levels of activity, performance, projections or achievements.

Investing in our common shares involves risks. You should carefully consider the following risk factors together with all of the other information included in this prospectus in evaluating an investment in our common shares. Additional risks not presently known to us or that we currently deem immaterial could also materially affect our business. This prospectus includes forward-looking statements regarding, among other things, our plans, strategies, prospects and projections, both business and financial. As a result, you should not place undue reliance on any such statements included in this prospectus or any other offering materials.

If any of the following risks were to occur, our business, financial condition and results of operations could be materially adversely affected. In that case, the trading price of our common shares could decline and you could lose all or part of your investment.

Our Sergipe Terminal commenced commercial operations in March, 2020. However, we have not yet commenced commercial operations or entered into binding construction contracts or obtained all necessary environmental, regulatory, construction and zoning permissions for any of our other facilities. We expect to convert the Golar Celsius or the Golar Penguin into a FSRU to service our Barcarena Terminal, but have not yet reached FID for the deployment and conversion of such vessel. In addition, although we have been awarded environmental and regulatory licenses for our Santa Catarina Terminal, we have not secured any commercial projects nor obtained all remaining necessary approvals. We also have various agreements in place that remain subject to final investment decisions, such as our agreement to provide an FSRU to CI-GNL in the Ivory Coast. There can be no assurance that we will be able to enter into the contracts required for the development of our facilities on commercially favorable terms, if at all, or that we will be able to obtain all of the environmental, regulatory, construction and zoning permissions we need in Brazil and elsewhere.

In particular, we will require agreements with ports proximate to our facilities capable of handling the transload of LNG direct from our occupying vessel to our transportation assets. If we are unable to enter into favorable contracts or to obtain the necessary regulatory and land use approvals on favorable terms, we may not be able to construct and operate these assets as described in this prospectus, or at all. In addition, to develop future projects we will, in many cases, have to secure the use of suitable vessels and, as required, convert them. Finally, the construction of facilities is inherently subject to the risks of cost overruns and delays. For example, the construction of our Sergipe Power Plant experienced a two-month delay related to the installation of various offshore equipment.

If we are unable to construct, commission and operate all of our facilities as described in this prospectus, or, when and if constructed, they do not accomplish the goals described in this prospectus, or if we experience delays or cost overruns in construction, our business, operating results, cash flows and liquidity could be materially and adversely affected. Expenses related to our pursuit of contracts and regulatory approvals related to our facilities still under development may be significant and will be incurred by us regardless of whether these assets are ultimately constructed and operational.

The transportation industry in Brazil currently relies on traditional fuels such as gasoline and diesel. And although there is wide acknowledgement in the industry that LNG represents a less expensive and more environmentally friendly alternative to these fuels, no significant portion of the transportation industry is currently utilizing LNG. We cannot predict when, or even if, any meaningful portion of the transportation industry within Brazil will convert to LNG powered vehicles. Our agreement with BR Distribuidora does not contractually obligate it to convert any portion of its fleet of diesel trucks to LNG-powered vehicles. Unless and until there is a significant conversion to LNG-powered vehicles within Brazil, we will not realize the anticipated benefits of our partnership, which could adversely impact our future revenues.

In addition, our agreement with BR Distribuidora is subject to approval by Brazilian antitrust authorities and our activities with respect to the sale of LNG are subject to the approval of other regulatory authorities, including ANP. There can be no assurance as to whether regulatory approvals will be received or that they will be granted in a timely manner. Until we receive these approvals, we will be unable to make sales through BR Distribuidora’s distribution channels or other channels. Accordingly, we have not yet made any sales pursuant to this arrangement.

We currently anticipate that a major source of our earnings will be cash distributions from our operating subsidiaries and joint ventures. The amount of cash that our operating subsidiaries and joint ventures can distribute each quarter to their owners, including us, principally depends upon the amount of cash they generate from their operations, which will fluctuate from quarter to quarter based on, among other things:

In addition, we do not wholly own all of our operating subsidiaries and joint ventures. As a result, if such operating subsidiaries and joint ventures make distributions, including tax distributions, they will also have to make distributions to their noncontrolling interest owners.

Our FSRU terminals have significant excess capacity that is currently not dedicated to a particular anchor customer. Part of our business strategy is to utilize undedicated excess capacity of our FSRU terminals to serve additional downstream customers in the regions in which we operate. However, we have not secured, and we may be unable to secure, commitments for all of our excess capacity. Factors which could cause us to contract less than full capacity include difficulties in negotiations with potential counterparties and factors outside of our control such as the price of and demand for LNG. Failure to secure commitments for less than full capacity could impact our future revenues and materially harm our business, financial condition and operating results.

In addition, CELSE has the right to utilize 100% of the capacity at our Sergipe Terminal pursuant to the Sergipe FSRU Charter. In order to utilize the excess capacity of the Sergipe Terminal, we will need the consent of CELSE and the senior lenders under CELSE’s financing arrangements. If we are unable to obtain the necessary consents to utilize the excess capacity of the Sergipe Terminal, our business, financial condition and operating results may be adversely affected.

Our operations are, and will be, dependent upon LNG being a competitive source of energy in the markets in which we operate. In particular, hydroelectric power generation is the predominant source of electricity in Brazil and LNG is one of several other energy sources used to supplement hydroelectric generation. Potential expansion in other parts of world where we may operate is primarily dependent upon LNG being a competitive source of energy in those geographical locations. Likewise, recent declines in the cost of crude oil, if sustained, will make crude oil and its derivatives a more competitive fuel source to LNG.

As a result of these and other factors, natural gas may not be a competitive source of energy in the markets we intend to serve or elsewhere. The failure of natural gas to be a competitive supply alternative to oil and other alternative energy sources could adversely affect our ability to deliver LNG or natural gas to our customers or other locations on a commercial basis.

In the near term, we expect to convert the Golar Celsius or the Golar Penguin into a FSRU. To date, we have invested approximately $30 million in anticipation of a conversion of at least one of these carriers. However, our final investment decision to convert either of these carriers is subject to a variety of conditions, including, most importantly, obtaining an anchor customer with respect to certain of our planned projects. Additionally, the remaining expense of any such conversion will require project specific financing based on the value of the as-converted FSRU.

We cannot guarantee that any of our additional projects will be commenced on a timely basis, or at all, or that we will be able to obtain the necessary project financing for the conversion on favorable terms or at all. A delay in the conversion of the Golar Celsius or Golar Penguin may materially and adversely affect our ability to secure and commence future projects.

LNG processed and stored on FSRUs may be subject to loss or damage resulting from equipment malfunction, faulty handling, ageing or otherwise. For the period of time during which LNG is stored on an FSRU or is dispatched to a pipeline, CELSE, in the case of the Sergipe Terminal, bears the risk of loss or damage to all such LNG. Any such disruption to the supply of LNG and natural gas may lead to delays, disruptions or curtailments in the production of power at the Sergipe Power Plant. If CELSE cannot generate energy at the Sergipe Power Plant by burning natural gas, its revenues, financial condition and results of operations may be materially and adversely affected.

Our business is subject to a variety of risks, including, among others, any inability to identify and enter into appropriate projects, any inability to obtain sufficient financing for any project we identify, any failure of upstream and downstream LNG producing and consuming projects connected with our activities, and other industry, regulatory, economic and political risks.

Our business strategy relies upon our future ability to successfully market natural gas to end-users, develop and maintain cost-effective logistics in our supply chain and construct, develop and operate energy-related infrastructure in Brazil and other emerging and developing countries where we do not currently operate. Our strategy assumes that we will be able to expand our operations into other countries, enter into long-term agreements with end-users, develop infrastructure into efficient and profitable operations in a timely and cost-effective way, obtain approvals from all relevant federal, state and local authorities, as needed, for the construction and operation of these projects and other relevant approvals and obtain long-term capital appreciation and liquidity with respect to such investments. We cannot assure you if or when we will enter into contracts for the sale of LNG and/or natural gas in connection with our downstream distribution business, or, if we are able to enter into contracts, whether such contracts will materialize. In addition, there is no certainty as to the price at which we will be able to sell LNG and/or natural gas or our costs for such LNG and/or natural gas.

Thus, there can be no assurance that we will achieve our target pricing, costs or margins. Our strategy may also be affected by future governmental laws and regulations, which are subject to change in emerging countries, such as Brazil. Our strategy also assumes that we will be able to enter into strategic relationships with energy end-users, power utilities, LNG providers, shipping companies, infrastructure developers, financing counterparties and other partners. These assumptions are subject to significant economic, competitive, regulatory and operational uncertainties, contingencies and risks, many of which are beyond our control. Additionally, in

furtherance of our business strategy, we may acquire operating businesses or other assets in the future. Any such acquisitions would be subject to significant risks and contingencies, including the risk of integration and we may not be able to realize the benefits of any such acquisitions.

Additionally, our strategy may evolve over time. Our future ability to execute our business strategy is uncertain, and it can be expected that one or more of our assumptions will prove to be incorrect and that we will face unanticipated events and circumstances that may adversely affect our business. Any one or more of the following factors may have a material adverse effect on our ability to implement our strategy and achieve our targets:

If we experience any of these failures, such failure may adversely affect our financial condition, results of operations and ability to execute our business strategy.

The scale and scope of the recent COVID-19 outbreak, the resulting pandemic, and the impact on the financial markets is unknown and could adversely affect our business, financial condition and results of operation at least for the near term. The rapid spread of COVID-19 globally has also resulted in increased travel restrictions and disruption and shutdown of certain businesses around the world, including our own. For example, there is an increased risk that FID of our Barcarena and Santa Catarina terminals may be delayed due to severe restrictions on travel within Brazil, which have prevented personnel from traveling between states to execute contracts and which have impacted the timing of inspections and permitting. In addition, the planned power auction related to the Santa Catarina Power Plant has been further postponed due to COVID-19. We continue to ask the majority of our non-essential workforce to work remotely, avoid public transportation and wear face coverings, and travel to other regions has been limited to essential personnel only. If COVID-19 were to affect a significant amount of our workforce, we may experience delays or the inability to fulfill our supply obligations to our customers on a timely basis. We will closely monitor this global health crisis and will reassess our strategy and operational activities on a regular, ongoing basis as the situation evolves.

The spread of COVID-19 has caused severe disruptions in the worldwide economy, including a significant decrease in the demand for LNG and natural gas, which could in turn disrupt our and our customers’ businesses, activities, and operations, including the marketability of our products. Moreover, since the beginning of January 2020, the COVID-19 outbreak has caused significant disruption in the financial markets both globally and in the U.S., which could limit our ability to access capital and sources of liquidity at attractive rates or at all, adversely affecting our business, financial condition, liquidity and results of operations. The global scale and scope of COVID-19 is unknown and the duration of the business disruption and related financial impact cannot be reasonably estimated at this time.

The extent to which COVID-19 impacts our results will ultimately depend on future developments, which are highly uncertain, and will include emerging information concerning the severity of COVID-19 and the actions taken by governments and private businesses to attempt to contain COVID-19. However, we believe COVID-19 could adversely affect our business, financial condition and results of operations at least for the near term. See “Management's Discussion and Analysis of Results of Operations and Financial Condition—Our Historical and Anticipated Future Operating Results Will Differ Materially—Impact of COVID-19.”

We have a limited operating history and track record. As a result, our prior operating history and historical consolidated financial statements may not be a reliable basis for evaluating our business prospects or the future value of our common shares. We commenced operations on May 19, 2016, and we had net losses attributable to common shareholders of approximately $7.3 million for the period from May 19, 2016 to December 31, 2017, $20.2 million in 2018, $24.3 million in 2019 and $60.8 million for the six months ended June 30, 2020. In addition, we have historically derived our revenues from the operation of our vessels in the Cool Pool, but we expect the majority of our future revenues to be derived from our LNG-to-power projects. Our strategy may not be successful, and if unsuccessful, we may be unable to modify it in a timely and successful manner. We cannot give you any assurance that we will be able to implement our strategy on a timely basis, if at all, or achieve our internal model or that our assumptions will be accurate. Accordingly, your investment in our common shares is speculative and subject to a high degree of risk. Prior to investing in our common shares, you should understand that there is a possibility of the loss of your entire investment. Our limited history also means that we continue to develop and implement various policies and procedures including those related to data privacy and other matters. We will need to continue to build our team to implement our strategies.

We will continue to incur significant capital and operating expenditures while we develop our network of downstream LNG infrastructure, including for the completion of the Sergipe Terminal, the Barcarena Terminal, the Santa Catarina Terminal and other projects in Brazil currently under construction, as well as other future projects in our project pipeline. We will need to invest significant amounts of additional capital to implement our strategy. We have not completed constructing all of our facilities and our strategy includes the construction of additional facilities. Any delays beyond the expected development period for these assets would prolong, and could increase the level of, operating losses and negative operating cash flows. Our future liquidity may also be

affected by the timing of construction financing availability in relation to the incurrence of construction costs and other outflows and by the timing of receipt of cash flows under our customer contracts in relation to the incurrence of project and operating expenses. Our ability to generate any positive operating cash flow and achieve profitability in the future is dependent on, among other things, our ability to successfully and timely complete necessary infrastructure, including our Barcarena and Santa Catarina Terminals and other projects in Brazil currently under construction, and fulfill our delivery obligations under our customer contracts.

Our business and the development of energy-related infrastructure and projects generally is based on assumptions about the future availability and price of natural gas and LNG and the prospects for international natural gas and LNG markets. Natural gas and LNG prices have at various times been and may become volatile due to one or more of the following factors:

Adverse trends or developments affecting any of these factors could result in decreases in the prices at which we are able to sell LNG and natural gas or increases in the prices we have to pay for natural gas or LNG, which could materially and adversely affect the performance of our customers, and could have a material adverse effect on our business, contracts, financial condition, operating results, cash flows, liquidity and prospects. There can be no assurance we will achieve our target cost or pricing goals. In particular, because we have not currently procured fixed-price, long-term LNG supply for some of our terminals, increases in LNG prices and/or shortages of LNG supply could be material and adverse to our business. There is inherent risk in the estimation process, including significant changes in the demand for and price of LNG as a result of the factors listed above, many of which are outside of our control.

In addition, the spread of COVID-19 across the globe has negatively affected worldwide economic and commercial activity, disrupted global supply chains, reduced global demand for oil, natural gas and LNG, and created significant volatility and disruption of financial and commodity markets. Other factors expected to impact crude oil and natural gas demand include production cuts and freezes implemented by OPEC members, other large oil producers such as Russia, and certain state regulators in the U.S. For example, during the first quarter of 2020, OPEC and Russia failed to agree on a plan to cut production of oil and related commodities. Subsequently, Saudi Arabia announced plans to increase production and reduce the prices at which they sell oil. In response to the oversupply of crude oil caused by COVID-19 and the actions of OPEC, Saudi Arabia and Russia, certain

state regulators in the U.S. are considering prorating production of hydrocarbons. These events, combined with the outbreak of the COVID-19 pandemic that has reduced economic activity and the related demand for oil, have contributed to a sharp drop in prices for crude oil, natural gas and LNG in the first half of 2020.

The Brazilian judiciary, our creditors and/or our subsidiaries may determine that any future liquidation proceeding of us or our subsidiaries be conducted as if we and our subsidiaries were a single company pursuant to the substantial consolidation theory. Should this happen, our shareholders may be adversely affected by the loss of value of the Company in the event our equity is allocated to pay the creditors of one or more of our subsidiaries.

Our power generation projects must interconnect to Brazil’s transmission system and such projects may depend on the completion of new lines and/or increases in the capacity of existing facilities by the applicable power transmission concessionaires in order to interconnect and become fully operational. Delays from such concessionaires in the completion of the necessary interconnection and associated facilities may affect the ability of our power generation projects to start commercial operation and/or fulfill power delivery commitments under the PPAs.

Historically, Brazil’s electricity generation has been dominated by hydroelectricity plants, which currently represent 64% of 171.8 GW of total installed capacity compared to 25% for thermoelectric facilities, 10% for renewables, and 1% for nuclear. There are substantial seasonal variations in monthly and annual flows to the plants, which depend fundamentally on the volume of rain that falls in each rainy season. When hydrological conditions are poor, the National Electricity System Operator (Operador Nacional do Sistema, or “ONS”) dispatches thermoelectric power plants, including those that we operate, to top up hydroelectric generation and maintain the electricity supply level.

The ONS Grid Code allows the ONS to dispatch thermoelectric power plants for the following reasons or under the following circumstances:

As a result, the amount of electricity generated by thermoelectric power plants, including our power plants that are already contracted and our power plants under development, can vary significantly in response to the hydrological and other grid conditions in Brazil. If our power plants are not dispatched or are dispatched at levels lower than expected, our operations and financial results may be adversely affected.

Our growth strategy focuses on expansion in the floating storage and regasification sector and the transportation sector within the LNG transportation, storage and regasification industry. The rate of LNG growth has fluctuated due to several reasons, including the global economic crisis and the continued increase in natural gas production from unconventional sources in regions such as North America. Accordingly, our growth depends on continued growth in world and regional demand for LNG, FSRUs and other LNG infrastructure assets, which could be negatively affected by a number of factors, including:

Reduced demand for LNG, FSRUs or other LNG infrastructure assets would have a material adverse effect on our future growth and could harm our business, financial condition and results of operations.

A portion of the net proceeds from this offering will be used to redeem the preference shares held by Stonepeak, with the remaining portion used to fund future capital expenditures. After giving effect to this offering, assuming the accuracy of our assumptions relating to construction, we believe that our cash resources will be sufficient to meet projected capital expenditures, financing obligations and operating requirements related to the construction and development of our assets and LNG facilities. In the future, we expect to incur additional indebtedness to assist us in developing our operations, including to finance the conversion of our existing LNG carriers to FSRUs. If we are unable to secure additional funding, or if it is only available on terms that we determine are not acceptable to us, we may be unable to fully execute our business plan and our business, financial condition or results of operations may be adversely affected. Additionally, we may need to adjust the timing of our planned capital expenditures and facilities development depending on the availability of such additional funding. Our ability to raise additional capital will depend on financial, economic and market conditions and other factors, many of which are beyond our control. We cannot assure you that such additional funding will be available on acceptable terms, or at all. To the extent that we raise additional equity capital by issuing additional securities at any point in the future, our then-existing shareholders may experience dilution. Debt financing, if available, may subject us to restrictive covenants that could limit our flexibility in conducting future business activities and could result in us expending significant resources to service our obligations. If we are unable to comply with these covenants and service our debt, we may lose control of our business and be forced to reduce or delay planned investments or capital expenditures, sell assets, restructure our operations or submit to foreclosure proceedings, all of which could result in a material adverse effect upon our business and reduce the value of your investment.

A variety of factors beyond our control could impact the availability or cost of capital, including the valuations of our assets, domestic or international economic conditions, increases in key benchmark interest rates and/or credit spreads, the adoption of new or amended banking or capital market laws or regulations, the re-pricing of market risks and volatility in capital and financial markets, risks relating to the credit risk of our customers and the jurisdictions in which we operate, as well as general risks applicable to the energy sector. Our financing costs could increase or future borrowings or equity offerings may be unavailable to us or unsuccessful, which could cause us to be unable to pay or refinance our indebtedness or to fund our other liquidity needs.

We have a limited operating history and did not commence revenue-generating activities until 2016, and therefore did not achieve profitability as of June 30, 2020. We will need to make a significant capital investment to construct and begin operations of the Barcarena Terminal, the Santa Catarina Terminal, our downstream distribution hubs and our other LNG-to-power projects in Brazil, and we will need to make significant additional investments to develop, improve and operate them, as well as all related infrastructure. We also expect to make significant expenditures and investments in identifying, acquiring and/or developing other future projects. We also expect to incur significant expenses in connection with the launch and growth of our business, including costs for LNG purchases, rail and truck transportation, shipping and logistics and personnel. We will need to raise significant additional debt and/or equity capital to achieve our goals.

We may not be able to achieve profitability, and if we do, we cannot assure you that we would be able to sustain such profitability in the future. Our failure to achieve or sustain profitability would have a material adverse effect on our business and the value of our common shares.

We conduct our business mainly through our operating subsidiaries. In addition, we and our subsidiaries conduct some of our business through joint venture and other special purpose entities, which are created specifically to participate in public auctions for enterprises in the generation and transmission segments. Our ability to meet our financial obligations is therefore related in part to the cash flow and earnings of our subsidiaries and joint ventures and the distribution or other transfers of earnings to us in the form of dividends, loans or other advances and payments that are governed by various joint venture financing and operating arrangements. For the purposes of Rule 3-09 of Regulation S-X, for the years ended December 31, 2019 and 2018, only CELSEPAR, whose sole material asset is its interest in CELSE, was considered a material investment.

A limited number of customers currently represent a substantial majority of our future income. Our operating results will be contingent on our ability to maintain sales to these customers. At least in the short term, we expect that a substantial majority of our sales will continue to arise from a concentrated number of customers, such as power utilities and industrial end-users. We expect the substantial majority of our revenue for the near future to be derived from our Sergipe Terminal and Sergipe Power Plant and as a result, are subject to any risks specific to those entities and the jurisdictions and markets in which they operate. We may be unable to accomplish our business plan to diversify and expand our customer base by attracting a broad array of customers, which could negatively affect our business, results of operations and financial condition.

Our contracts with our customers contain various termination rights. For example, each of our long-term customer contracts contains various termination rights allowing our customers to terminate the contract, including, without limitation:

In addition, we may be subject to a penalty upon termination equal to one year of sales revenue as calculated in accordance with the terms of the PPAs and may be required to indemnify the losses of off-takers.

We may not be able to replace these contracts on desirable terms, or at all, if they are terminated. Contracts that we enter into in the future may contain similar provisions. If any of our current or future contracts are terminated, such termination could have a material adverse effect on our business, contracts, financial condition, operating results, cash flows, liquidity and prospects.

We depend on a limited number of key suppliers and vendors to provide the equipment and other services necessary for the construction and operation of our projects in various jurisdictions. Although we contract with most of our suppliers and vendors at fixed prices and require them to pay delivery delay penalties, our suppliers may, among other things, extend delivery times, raise contract prices and limit supply due to their own shortages and business requirements. If our suppliers or vendors fail to provide the necessary equipment or services on a timely basis, we could experience disruptions in our operations, which could have a material adverse effect on our business and operations.

Our sale and leaseback agreements for the Golar Nanook, Golar Penguin and Golar Celsius contain, and any future sale and leaseback agreements we may enter into are expected to contain, customary covenants and event of default clauses, including cross-default provisions and restrictive covenants and performance requirements that may affect our operational and financial flexibility. In addition, we also assign the shares in our subsidiaries which are the charterers of these vessels to the owners/lessors. Such restrictions could affect, and in many respects limit or prohibit, among other things, our ability to incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could also limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. There can be no assurance that such restrictions will not adversely affect our ability to finance our future operations or capital needs.

Certain of our sale and leaseback agreements contain cross-default clauses and require us to maintain specified financial ratios, satisfy certain financial covenants and/or assign equity interests in our subsidiaries to third parties, including, among others, the following requirements:

As of December 31, 2019, we are in compliance with the consolidated leverage ratio and the minimum free liquidity covenants in our sale and leaseback agreements.

As a result of the restrictions in our sale and leaseback agreements, or similar restrictions in our future sale and leaseback agreements, we may need to seek permission from the owners of our leased vessels in order to engage in certain corporate actions. Their interests may be different from ours and we may not be able to obtain their permission when needed. This may prevent us from taking actions that we believe are in our best interest, which may adversely impact our revenues, results of operations and financial condition.

A failure by us to meet our payment and other obligations, including our financial covenant requirements, could lead to defaults under our sale and leaseback agreements or any future sale and leaseback agreements. If we are not in compliance with our covenants and we are not able to obtain covenant waivers or modifications, the current or future owners of our leased vessels, as appropriate, could retake possession of our vessels or require us to pay down our indebtedness to a level where we are in compliance with our covenants or sell vessels in our fleet. We could lose our vessels if we default on our bareboat charters in connection with the sale and leaseback agreements, which would negatively affect our revenues, results of operations and financial condition.

On closing of our sale and leaseback transactions, we transferred our ownership interests in each of the Golar Nanook, the Golar Penguin and the Golar Celsius. Although the operation of these vessels is expected to continue in the ordinary course, the bareboat charters in connection with the sale and leaseback transactions may, in certain

circumstances, be terminated. Any such termination could have a significant adverse effect on our business, financial condition and results of operations of our vessels. The sale and leaseback agreements will also require significant periodic cash payments in respect of the required rent thereunder, which we have not historically incurred for the Golar Celsius or, prior to December 2019, the Golar Penguin, and other allocated operating and maintenance costs. The increase in our lease expense may have an adverse impact on our future operations and profitability.

Our ability to make scheduled payments on or to refinance our existing or future debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to fund our day-to-day operations or to pay the principal, premium, if any, and interest on our indebtedness. As of December 31, 2019 and June 30, 2020, we had $469.2 million and $494.4 million of total indebtedness outstanding, respectively, excluding deferred financing costs.

If our cash flows and capital resources are insufficient to fund our debt service obligations and other cash requirements, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to sell assets or operations, seek additional capital or restructure or refinance our indebtedness or operations. We may not be able to affect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, such alternative actions may not allow us to meet our scheduled debt service obligations. The agreements that govern our indebtedness restrict our ability to dispose of assets and use the proceeds from any such dispositions and our ability to raise debt capital to be used to repay our indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.

Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations. In addition, obligations under certain of our financing arrangements are secured by certain of our vessels and guaranteed by our subsidiaries holding the interests in our vessels, and if we are unable to repay debt under our financing arrangements, the lenders or lessors could seek to foreclose on those assets.

If we cannot make scheduled payments on our debt, we will be in default and, as a result, lenders under any of our existing and future indebtedness could declare all outstanding principal and interest to be due and payable, the lenders under our debt instruments could terminate their commitments to loan money, our secured lenders could foreclose against the assets securing such borrowings and we could be forced into bankruptcy or liquidation, in each case, which could result in your losing your investment.

We have floating rate debt, the interest rate of which is determined based on the London Interbank Offered Rate (“LIBOR”). LIBOR and other “benchmark” rates are subject to ongoing national and international regulatory scrutiny and reform. For example, on July 27, 2017, the U.K. Financial Conduct Authority announced that it will no longer persuade or compel banks to submit rates for the calculation of the LIBOR rates after 2021 (the “FCA Announcement”). The Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, has proposed an alternative rate to replace U.S. dollar LIBOR: the Secured Overnight Financing Rate, or “SOFR.”

We are unable to predict the effect of the FCA Announcement or other reforms, whether currently enacted or enacted in the future. They may result in the phasing out of LIBOR as a reference rate. The impact of such transition away from LIBOR could be significant for us because of the number of our financing arrangements that are linked to LIBOR and our indebtedness. The outcome of reforms may result in increased interest expense to us, may affect our ability to incur debt on terms acceptable to us and may result in increased costs related to amending our existing debt instruments, which could adversely affect our business, results of operations and financial condition.

We have entered into joint ventures to acquire and develop LNG infrastructure projects and may in the future enter into additional joint venture arrangements with third parties. As we do not operate the assets owned by these joint ventures, our control over their operations is limited by provisions of the agreements we have entered into with our joint venture partners and by our percentage ownership in such joint ventures. Because we do not control all of the decisions of our joint ventures, it may be difficult or impossible for us to cause the joint venture to take actions that we believe would be in our or the joint venture’s best interests. For example, we cannot unilaterally cause the distribution of cash by our joint ventures. Additionally, as the joint ventures are separate legal entities, any right we may have to receive assets of any joint venture or other payments upon their liquidation or reorganization will be effectively subordinated to the claims of the creditors of that joint venture (including tax authorities and trade creditors). Moreover, joint venture arrangements involve various risks and uncertainties, such as committing us to fund operating and/or capital expenditures, the timing and amount of which we may not control, and our joint venture partners may not satisfy their financial obligations to the joint venture. Our results of operations depend on the performance of these joint ventures and their ability to distribute funds to us, and we may be unable to control the amount of cash we will receive from their operations or the timing of capital expenditures, which could adversely affect our financial condition.

We may provide guarantees to certain banks with respect to commercial bank indebtedness of our joint ventures and/or affiliates. Failure by any of our joint ventures, equity method investees and/or affiliate to service their debt requirements and comply with any provisions contained in their commercial loan agreements, including paying scheduled installments and complying with certain covenants, may lead to an event of default under the related loan agreement. As a result, if our joint ventures, equity method investees and/or affiliates are unable to obtain a waiver or do not have enough cash on hand to repay the outstanding borrowings, the relevant lenders may foreclose their liens on the vessels securing the loans or seek repayment of the loan from us, or both. Either of these possibilities could have a material adverse effect on our business. Further, by virtue of our guarantees with respect to our joint ventures and/or affiliates, this may reduce our ability to gain future credit from certain lenders.

We have significant working capital requirements, primarily driven by the delay between the purchase of and payment for natural gas and the extended payment terms that we offer our customers. Differences between the date when we pay our suppliers and the date when we receive payments from our customers may adversely affect our liquidity and our cash flows. We expect our working capital needs to increase as our total business increases. If we do not have sufficient working capital, we may not be able to pursue our growth strategy, respond to competitive pressures or fund key strategic initiatives, such as the development of our facilities, which may harm our business, financial condition and results of operations.

As of June 30, 2020, we had two LNG carriers operating in the spot market within the Cool Pool. We anticipate that one or both of these vessels may be converted to FSRUs, but until such time they will remain in the pool. Please see “Business—Our Vessels” for further detail. The spot market refers to charters for periods of up to twelve months. Spot/short-term charters expose the Cool Pool to the volatility in spot charter rates, which can be significant. In contrast, medium to long-term time charters generally provide reliable revenues, but they also limit the portion of our fleet available to the spot/short-term market during an upswing in the LNG industry cycle, when spot/short-term market voyages might be more profitable. The charter rates payable in the spot market are uncertain and volatile and will depend upon, among other things, economic conditions in the LNG market.

If we do not reach FID on the conversion of our LNG carriers to FSRUs, they will operate within the Cool Pool. If the Cool Pool is unable to find profitable employment or re-deploy ours or any of the other Cool Pool participants’ vessels, we will not receive any revenues from the Cool Pool, but we may be required to pay

expenses necessary to maintain that vessel in proper operating condition. A sustained decline in charter or spot rates or a failure by the Cool Pool to successfully charter its participating vessels could have a material adverse effect on our results of operations and our ability to meet our financing obligations.

Each of our vessels is operated and maintained by Golar LNG or its affiliates pursuant to ship management agreements. These agreements are the result of arms-length negotiations and subject to change. If Golar LNG or any of its affiliates that provide services to us fails to perform these services satisfactorily or the terms of the ship management agreements change, it could have a material adverse effect on our business, results of operations and financial condition.

As more fully discussed in this prospectus, our existing facilities and expected future facilities face operational risks, including the following: performing below expected levels of efficiency, breakdowns or failures of equipment, operational errors by tankers or tug operators, operational errors by us or any contracted facility operator, labor disputes and weather-related or natural disaster interruptions of operations, including ship-to-ship transfers. Any of these risks could disrupt our operations and increase our costs, which would adversely affect our business, operating results, cash flows and liquidity.

In particular, the operation of the Sergipe Power Plant will involve particular, significant risks, including, among others: failure to maintain the required license(s) and other permits required to operate the Sergipe Power Plant in Brazil; pollution or environmental contamination affecting operation of the Sergipe Power Plant; the inability, or failure, of any counterparty to any plant-related agreements to perform their contractual obligations to us including, but not limited to, planned and unplanned power outages due to maintenance, expansion and refurbishment. We cannot assure you that future occurrences of any of the events listed above or any other events of a similar or dissimilar nature would not significantly decrease or eliminate the revenues from, or significantly increase the costs of operating, the Sergipe Power Plant. If the Sergipe Power Plant is unable to generate or deliver power to its end-users, pursuant to its PPAs, such counterparties may not be required to make payments under their respective agreements so long as the event continues, and the Sergipe Power Plant may be required to pay penalties due to the unavailability of power. The counterparties to the PPAs and any other key plant-related agreements may have the right to terminate those agreements for certain failures to generate or deliver power. In addition under Brazilian law, we are strictly liable for direct and indirect damages resulted from the inadequate supply of electricity, such as abrupt interruptions or problems related to generation, transmission or distribution systems. As a consequence, there may be reduced or no revenues from the Sergipe Power Plant which could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects.

Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters, acts of piracy, environmental accidents, bad weather, mechanical failures, grounding, fire, explosions and collisions, human error, national emergency and war and terrorism. Incidents such as these have historically affected companies in our industry, and such an event or accident involving any of our vessels could result in any of the following:

Any of these circumstances or events could increase our costs or lower our revenues.

The construction of energy-related infrastructure, including our Barcarena Terminal, the Santa Catarina Terminal and other assets in Brazil, as well as other future projects, involves numerous operational, regulatory, environmental, political, legal and economic risks beyond our control and may require the expenditure of significant amounts of capital during construction and thereafter. These potential risks include, among other things, the following:

A materialization of any of these risks could adversely affect our ability to achieve growth in the level of our cash flows or realize benefits from future projects, which could have a material adverse effect on our business, financial condition and results of operations.

Storms and related storm activity and collateral effects, or other disasters such as explosions, fires, seismic events, floods or accidents, could result in damage to, or interruption of operations in our supply chain, including at our facilities or related infrastructure, as well as delays or cost increases in the construction and the development of our proposed facilities or other infrastructure. Changes in the global climate may have significant physical effects, such as increased frequency and severity of storms, floods and rising sea levels; if any such effects were to occur, they could have an adverse effect on our marine and coastal operations.

If one or more tankers, terminals, pipelines, facilities, equipment or electronic systems that we own, lease or operate or that deliver products to us or that supply our facilities and customers’ facilities are damaged by severe weather or any other disaster, accident, catastrophe, terrorist or cyber-attack or event, our operations and construction projects could be delayed and significantly interrupted. These delays and interruptions could involve significant damage to people, property or the environment, and repairs could take a week or less for a minor

incident to six months or more for a major interruption. Any such event that interrupts the revenues generated by our operations, or that causes us to make significant expenditures not covered by insurance, could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects.

Our current operations and future projects are subject to the inherent risks associated with LNG, natural gas and power operations, including explosions, pollution, release of toxic substances, fires, seismic events, hurricanes and other adverse weather conditions, and other hazards, each of which could result in significant delays in commencement or interruptions of operations and/or result in damage to or destruction of the our facilities and assets or damage to persons and property. In addition, such operations and the vessels of third parties on which our current operations and future projects may be dependent face possible risks associated with acts of aggression or terrorism. If our vessels suffer damage, they may need to be repaired. The costs of vessel repairs are unpredictable and can be substantial. We may have to pay repair costs that our insurance policies do not cover.

We do not, nor do we intend to, maintain insurance against all of these risks and losses. In particular, we do not carry business interruption insurance for hurricanes and other natural disasters. Therefore, the occurrence of one or more significant events not fully insured or indemnified against could create significant liabilities and losses which could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects.

Although we carry insurance, all risks may not be adequately insured against, and any particular claim may not be paid. Any claims covered by insurance would be subject to deductibles, and since it is possible that a large number of claims may be brought, the aggregate amount of these deductibles could be material. In addition, we may be unable to procure adequate insurance coverage at commercially reasonable rates in the future. For example, environmental regulations have led in the past to increased costs for, and in the future may result in the lack of availability of, insurance against risks of environmental damage or pollution. A catastrophic release of natural gas, marine disaster or natural disasters could result in losses that exceed our insurance coverage, which could harm our business, financial condition and operating results. Our insurance may be voidable by the insurers as a result of certain of our actions and any uninsured or underinsured loss could harm our business and financial condition.

Changes in the insurance markets attributable to terrorist attacks or political change may also make certain types of insurance more difficult for us to obtain. In addition, the insurance that may be available may be significantly more expensive than our existing coverage.

In the future we and our subsidiaries may be subject to material legal proceedings in the course of our business, including, but not limited to, actions relating to contract disputes, business practices, intellectual property and other commercial and tax matters. Such legal proceedings may involve claims for substantial amounts of money or for other relief or might necessitate changes to our business or operations, and the defense of such actions may be both time consuming and expensive. Further, if any such proceedings were to result in an unfavorable outcome, it could have a material adverse effect on our business, financial position and results of operations.

Significant demands are placed on our management as a result of our growth. As we expand our operations, we must manage and monitor our operations, control costs and maintain quality and control. Our success depends, to a significant extent, upon the abilities and the efforts of our senior executives. While we believe that we have an experienced management team, the loss or unavailability of one or more of our senior executives for any extended period of time could have an adverse effect on our business and results of operations.

Timely and cost-effective completion of our energy-related infrastructure, including our Sergipe Terminal, the Barcarena Terminal and the Santa Catarina Terminal, as well as future projects, in compliance with agreed specifications is central to our business strategy and is highly dependent on the performance of our primary building contractor and our other contractors under our agreements with them. For example, the construction of the Sergipe Power Plant was not completed on schedule, and we were forced to purchase energy in the spot market to avoid a breach of our obligations under the original PPAs. The ability of our primary building contractors and our other contractors to perform successfully under their agreements with us is dependent on a number of factors, including their ability to:

Until we have entered into an EPC contract for a particular project, in which the EPC contractor agrees to meet our planned schedule and projected total costs for a project, we are subject to potential fluctuations in construction costs and other related project costs. Although some agreements may provide for liquidated damages if the contractor fails to perform in the manner required with respect to certain of its obligations, the events that trigger a requirement to pay liquidated damages may delay or impair the operation of the applicable facility, and any liquidated damages that we receive may be delayed or insufficient to cover the damages that we suffer as a result of any such delay or impairment. The obligations of our primary building contractor and our other contractors to pay liquidated damages under their agreements with us are subject to caps on liability, as set forth therein. Furthermore, we may have disagreements with our contractors about different elements of the construction process, which could lead to the assertion of rights and remedies under their contracts and increase the cost of the applicable facility or result in a contractor’s unwillingness to perform further work. If any contractor is unable or unwilling to perform according to the negotiated terms and timetable of its respective agreement for any reason or terminates its agreement for any reason, we would be required to engage a substitute contractor, which could be particularly difficult in certain of the markets in which we plan to operate. This would likely result in significant project delays and increased costs, which could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects.

We are relying on third parties for the design and engineering services underlying our estimates of the future rated capacity and performance capabilities of our Sergipe Terminal, the Barcarena Terminal and the Santa Catarina Terminal, as well as other future projects. If any of these facilities, when actually constructed, fails to have the rated capacity and performance capabilities that we intend, our estimates may not be accurate. Failure of any of our existing or future facilities to achieve our intended future capacity and performance capabilities could prevent us from achieving the commercial start dates under our customer contracts and could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects.

Under the PPAs related to the Sergipe Power Plant and our other LNG-to-power facilities, we are required to deliver power, which also requires us to obtain sufficient amounts of LNG. However, we may not be able to purchase or receive physical delivery of sufficient quantities of LNG to satisfy those delivery obligations, which may subject us

to certain penalties and provide our counterparties with the right to terminate their PPAs. With respect to the Sergipe Power Plant, we have entered into a supply agreement with Ocean LNG, an affiliate of Qatar Petroleum. If Ocean LNG fails to deliver sufficient LNG to Sergipe, we would be forced to purchase LNG on the spot market, which may be on less favorable terms. In addition, price fluctuations in natural gas and LNG may make it expensive or uneconomical for us to acquire adequate supply of these items for our other customers.

We are dependent upon third party LNG suppliers and shippers and other tankers and facilities to provide delivery options to and from our tankers and energy-related infrastructure. If LNG were to become unavailable for current or future volumes of natural gas due to repairs or damage to supplier facilities or tankers, lack of capacity, impediments to international shipping or any other reason, our ability to continue delivering natural gas, power or steam to end-users could be restricted, thereby reducing our revenues. Additionally, under tanker charters, we will be obligated to make payments for our chartered tankers regardless of use. We may not be able to enter into contracts with purchasers of LNG in quantities equivalent to or greater than the amount of tanker capacity we have purchased. If any third parties were to default on their obligations under our contracts or seek bankruptcy protection, we may not be able to purchase or receive a sufficient quantity of natural gas in order to supply the Sergipe Power Plant and satisfy our delivery obligations under our PPAs. Any permanent interruption at any key LNG supply chains that caused a material reduction in volumes transported to our facilities could have a material adverse effect on our business, financial condition, operating results, cash flow, liquidity and prospects.

Recently, the LNG industry has experienced increased volatility. If market disruptions and bankruptcies of third party LNG suppliers and shippers negatively impacts our ability to purchase a sufficient amount of LNG or significantly increases our costs for purchasing LNG, our business, operating results, cash flows and liquidity could be materially and adversely affected.

If we fail to take delivery of contracted volumes under our gas supply agreements, we may be required to make payments to counterparties under such agreements. For example, CELSE entered into a 25-year LNG supply agreement with Ocean LNG for the supply of LNG to the Sergipe Terminal. Pursuant to the terms of the Sergipe Supply Agreement, CELSE is required to take delivery of a specified base quantity of LNG each year, subject to certain adjustments. If CELSE takes less than the full number of scheduled cargoes per year under the Sergipe Supply Agreement, CELSE will be required to pay Ocean LNG a cancellation fee per cargo according to a formula based on the number of the cargoes not taken, subject to a cap of $110 million for every five-year period, or an aggregate of $550 million over the 25-year term. For additional information regarding our relationship with Ocean LNG and the Sergipe Supply Agreement, please see “Business—Detailed Description of our Operating and Advanced Stage Terminals—Description of Contractual Arrangements Related to Sergipe—The Sergipe LNG Supply Agreement.”

Our business is subject to the risk of natural gas and LNG price competition at times when we need to replace any existing customer contract, whether due to natural expiration, default or otherwise, or enter into new customer contracts. Factors relating to competition may prevent us from entering into new or replacement customer contracts on economically comparable terms to existing customer contracts, or at all. Such an event could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects. Factors which may negatively affect potential demand for natural gas from our business are diverse and include, among others:

The success of our current operations and future projects will depend in part on our ability to create and maintain a competitive position in the natural gas industry. Our technologies may be rendered obsolete or

uneconomical by legal or regulatory requirements, technological advances, more efficient and cost-effective processes or entirely different approaches developed by one or more of our competitors or others, which could materially and adversely affect our business, ability to realize benefits from future projects, results of operations, financial condition, liquidity and prospects.

We plan to operate in the highly competitive area of LNG and face intense competition from independent, technology-driven companies as well as from both major and other independent oil and natural gas companies and utilities, many of which have been in operation longer than us.

We may face competition from major energy companies and others in pursuing our proposed business strategy. In addition, competitors have and are developing LNG import terminals in other markets, which may compete with our LNG facilities. Some of these competitors have longer operating histories, more development experience, greater name recognition, larger staffs and substantially greater financial, technical and marketing resources than we currently possess. We also face competition for the contractors needed to build our facilities. The superior resources that some of these competitors have available for deployment could allow them to compete successfully against us, which could have a material adverse effect on our business, ability to realize benefits from future projects, results of operations, financial condition, liquidity and prospects.

We are dependent upon the available labor pool of skilled employees, including technically skilled officers and crew. We compete with other energy companies and other employers to attract and retain qualified personnel with the technical skills and experience required to crew our vessels, construct and operate our energy-related infrastructure and to provide our customers with the highest quality service. In particular, our vessels require a technically skilled officer staff with specialized training. If we are unable to employ technically skilled staff and crew, we will not be able to adequately staff our vessels. We are subject to applicable labor regulations in the jurisdictions in which we operate, including Brazil. We may face challenges and costs in hiring, retaining and managing our Brazilian and other employee base. A shortage in the labor pool of skilled workers, particularly of skilled officers, or other general inflationary pressures or changes in applicable laws and regulations, could make it more difficult for us to attract and retain qualified personnel and could require an increase in the wage and benefits packages that we offer, thereby increasing our operating costs. Any increase in our operating costs could materially and adversely affect our business, financial condition, operating results, liquidity and prospects.

A work stoppage or strike could occur in the future. Since initiation of construction of the Sergipe Power Plant, there have been numerous labor demonstrations and other forms of labor unrest by unemployed workers and union groups in the State of Sergipe, some of which were directed towards CELSE. Labor unrest, as well as any strikes, could cause interruptions or delays our projects or their operations.

The substantial majority of our anticipated revenue in 2020 will be dependent upon our assets and customers in Brazil. Brazil has historically experienced economic volatility and the general condition and performance of the Brazilian economy, over which we have no control, may affect our business, financial condition and results of operations. Due to our current lack of asset and geographic diversification, an adverse development at any of our facilities in Brazil, in the energy industry or in the economic conditions in Brazil, would have a significantly greater impact on our financial condition and operating results than if we maintained more diverse assets and operating areas.

We test our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Significant negative industry or economic trends, declines in our market capitalization, reduced estimates of future cash flows for our reportable segments or

disruptions to our business could lead to an impairment charge of our long-lived assets, including our vessels. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and to rely heavily on projections of future operating performance. For example, as of December 31, 2019 and June 30, 2020, we determined that our vessels had a market value that was less than their carrying value but because estimated future undiscounted cash flows related to these vessels were significantly greater than the respective carrying values, we did not record an impairment. There can be no assurance that we will not record an impairment with respect to these vessels or any other assets in the future. Projections of future operating results and cash flows may vary significantly from results and we may recognize an impairment in the future. In addition, if our analysis results in an impairment to our long-lived assets, we may be required to record a charge to earnings in our consolidated financial statements during a period in which such impairment is determined to exist, which may negatively impact our operating results.

Health and safety performance is critical to the success of all areas of our business. Any failure in health and safety performance from our operations may result in an event that causes personal harm or injury to our employees, other persons, and/or the environment, as well as the imposition of injunctive relief and/or penalties for non-compliance with relevant regulatory requirements or litigation. Any such failure that results in a significant health and safety incident may be costly in terms of potential liabilities, and may result in liabilities that exceed the limits of our insurance coverage. Such a failure, or a similar failure elsewhere in the energy industry (including, in particular, LNG storage, transportation or regasification operations), could generate public concern, which may lead to new laws and/or regulations that would impose more stringent requirements on our operations, have a corresponding impact on our ability to obtain permits and approvals, and otherwise jeopardize our reputation or the reputation of our industry as well as our relationships with relevant regulatory agencies and local communities. Individually or collectively, these developments could adversely impact our ability to expand our business, including into new markets. Similarly, such developments could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects.

We rely on information technology systems and networks, the majority of which are provided by Golar Management, in our operations and the administration of our business. Our business operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or to steal data. A successful cyber-attack could materially disrupt our operations, including the safety of our operations and the availability of our vessels and facilities or lead to unauthorized release of information or alteration of information in our systems. Any such attack or other breach of our information technology systems could have a material adverse effect on our business and results of operations.

We are subject to laws, directives and regulations relating to the collection, use, retention, disclosure, security and transfer of personal data. These laws, directives, and regulations, and their interpretation and enforcement continue to evolve and may be inconsistent from jurisdiction to jurisdiction. For example, the General Data Protection Regulation (“GDPR”), which regulates the use of personally identifiable information, went into effect in the European Union (“EU”) on May 25, 2018, applies globally to all of our activities conducted from an establishment in the EU, to related products and services that we offer to EU customers and to non-EU customers which offer services in the EU. Complying with the GDPR and similar emerging and changing privacy and data protection requirements may cause us to incur substantial costs or require us to change our business practices. Noncompliance with our legal obligations relating to privacy and data protection could result in penalties, fines, legal proceedings by governmental entities or others, loss of reputation, legal claims by individuals and customers and significant legal and financial exposure and could affect our ability to retain and attract customers.

Changes in the nature of cyber-threats and/or changes to industry standards and regulations might require us to adopt additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. However, the impact of such regulations is hard to predict at this time.

Over the past several years, changing weather patterns and climatic conditions, such as global warming, have added to the unpredictability and frequency of natural disasters in certain parts of the world, including the markets in which we operate and intend to operate, and have created additional uncertainty as to future trends. There is a growing consensus today that climate change increases the frequency and severity of extreme weather events and, in recent years, the frequency of major weather events appears to have increased. We cannot predict whether or to what extent damage that may be caused by natural events, such as severe tropical storms and hurricanes, will affect our operations or the economies in our current or future market areas, but the increased frequency and severity of such weather events could increase the negative impacts to economic conditions in these regions and result in a decline in the value or the destruction of our liquefiers and downstream facilities or affect our ability to transmit LNG. In particular, if one of the regions in which our terminals are operating or under development is impacted by such a natural catastrophe in the future, it could have a material adverse effect on our business. Further, the economies of such impacted areas may require significant time to recover and there is no assurance that a full recovery will occur. Even the threat of a severe weather event could impact our business, financial condition or the price of our common shares.

Our business is subject to extensive regulation by various Brazilian regulatory authorities, particularly ANEEL, ANP and ANTAQ. ANEEL regulates and oversees various aspects of our business and establishes our tariffs. If we are obligated by ANEEL to make additional and unexpected capital investments and are not allowed to adjust our tariffs accordingly, if ANEEL does not authorize the recovery of all costs or if ANEEL modifies the regulations related to tariff adjustments, we may be adversely affected. ANP regulates the import and export of LNG and the transportation and distribution of natural gas activities, including our downstream distribution business. ANTAQ regulates and oversees port activities in Brazil.

In addition, both the implementation of our strategy for growth and our ordinary business may be adversely affected by governmental actions such as changes to current legislation, the termination of federal and state concession programs, creation of more rigid criteria for qualification in public energy auctions, or a delay in the revision and implementation of new annual tariffs.

If regulatory changes require us to conduct our business in a manner substantially different from our current operations, our operations, financial results and our capacity to fulfill our contractual obligations may be adversely affected.

CELSE and CELBA will carry out their respective power generation activities in accordance with the authorizations granted by the Brazilian government through the MME (the “MME Authorizations”). CELSE’s authorization expires in November 2050, and CELBA’s authorization, which is in the process of being granted, is expected to expire in 2055. ANEEL may impose penalties on CELSE and CELBA if they fail to comply with any provision of the MME Authorizations or with the legislation and regulations applicable to the Brazilian power industry. Depending on the extent of the non-compliance, these penalties could include:

ANEEL may also terminate the MME Authorizations prior to their expiration in the event that CELSE or CELBA fails to comply with the provisions of the MME Authorizations, is declared bankrupt or is dissolved. In the event of non-compliance by CELSE and/or CELBA, ANEEL may also impose certain of the penalties (in particular, bans and restrictions) on affiliates of CELSE and CELBA.

CELSE and CELBA are subject to extensive legislation and regulations imposed by the Brazilian government and ANEEL, and cannot predict the effect of any changes to the legislation or regulations currently in force regarding their respective businesses.

The implementation of our business strategy and our ability to carry out our activities may be adversely affected by certain governmental actions.

We may be subject to new regulations enacted by the Brazilian government that could retroactively affect the rules for renewal of our concessions and authorizations.

The non-renewal of any of our authorizations, as well as the non-renewal of our energy supply contracts, could have a material adverse effect on our financial condition, results of operations and our capacity to fulfill our contractual obligations.

The Brazilian government implemented fundamental changes in the regulation of the power industry in legislation passed in 2004 known as the Lei do Novo Modelo do Setor Elétrico, or New Regulatory Framework. Challenges to the constitutionality of the New Regulatory Framework are still pending before the Brazilian Federal Supreme Court (Supremo Tribunal Federal), although preliminary injunctions have been dismissed. It is not possible to estimate when these proceedings will be finally decided. If all or part of the New Regulatory Framework were held to be unconstitutional, there would be uncertain consequences for the validity of existing regulation and the further development of the regulatory framework. The outcome of the legal proceedings is difficult to predict, but it could have an adverse impact on the entire energy sector, including our business and results of operations. Due to the duration of the lawsuit, it is possible that the Brazilian Federal Supreme Court will not give retroactive effect to its decision, but rather preserve the validity of past acts applying a judicial practice known as modulation of effects.

If the regulatory framework under which we operate is revised in a way that results in us being required to conduct our business in a manner substantially different from our current operations, our operations, financial results and our capacity to fulfill our contractual obligations may be adversely affected.

Sellers in the Free Market are subject to potential differences in the settlement between the energy delivered and the energy sold, and buyers in the Free Market are subject to potential differences in the settlement between the energy consumed and the energy acquired. The differences are settled by the CCEE at the spot price, or the PLD. The PLD is based on the energy traded in the spot energy market. It is calculated for each submarket and load level on a weekly basis and is based on the marginal cost of operation. The maximum and the minimum value of the PLD are set every year by ANEEL. Short-term variations in energy prices on the spot energy market may lead to potential losses in our commercialization activity.

The “Physical Guarantee” is the amount of power that a plant is expected to contribute to the electricity grid over the life of a PPAs. We cannot be certain if future events could affect the Physical Guarantee of each of our individual power plants. When the Physical Guarantee of a power plant is decreased, our ability to supply electricity under that plant’s PPAs is adversely affected, which can lead to a decrease in our revenues and increase our costs if our generation subsidiaries are required to purchase power elsewhere.

Our activities are subject to comprehensive and changing international, federal, state and municipal legislation, rules, regulations and agreements which impose the need to obtain and maintain licenses, as well as regulation and supervision by international organizations and Brazilian governmental agencies that are

responsible for the implementation of environmental, health and safety laws and policies. Such laws and regulations, among other things, govern response to and liability for oil spills, discharges to air and water, and the handling and disposal of hazardous substances and wastes. In some cases, these laws and regulations require us to obtain governmental permits and authorizations before we may conduct activities.

Governmental agencies could take enforcement action against us for failure to comply with their regulations, or to obtain or maintain licenses. These actions could include, among other things, the imposition of administrative and criminal sanctions, including fines and revocation of licenses, or the suspension or termination of our operations, including, in certain instances, seizure or detention of our vessels. The sanctions depend on the seriousness of the infraction or on the extent of damage caused, and any mitigating or aggravating circumstances applicable to the violator. It is possible that enhanced environmental and health regulations will force us to allocate capital expenditures to compliance, and consequently, increase our level of investment or divert funds from existing planned investments, either of which could have a material adverse effect on our financial condition and results of operations.

Climate change continues to attract considerable attention in the United States, Brazil, and other foreign countries. Numerous proposals have been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit existing emissions of greenhouse gases (“GHGs”) as well as to restrict or eliminate such future emissions. As a result, our operations are subject to a series of regulatory, litigation and financial risks associated with the transport of petroleum products and emission of GHGs.

In 2009, Brazil implemented the National Policy on Climate Change, which establishes a framework for reduction of GHGs. However, this does not include a mandatory emissions trading regime, carbon tax, or other such regulatory mechanism to enforce reductions of emissions across the country. Much of this reduction is expected to be achieved through reduced deforestation and increased supplies of renewable energy. It is not possible to know how quickly renewable energy technologies may advance, but the increased use of renewable energy for any reason could ultimately reduce future demand for hydrocarbons and energy produced from them. These developments could ultimately have a material adverse effect on our financial position, results of operations and cash flows. Additionally, various states and local governments have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of emissions. At the international level, there is an agreement, the United Nations-sponsored “Paris Agreement,” for nations to limit their GHG emissions through non-binding individually determined reduction goals every five years after 2020. As a party to the agreement, Brazil intends to reduce GHG emissions by 37% below 2005 levels by 2025.

There are also increasing risks of litigation related to climate change effects. In the United States, governments and third-parties have brought suit against some fossil fuel companies alleging, among other things, that such companies are liable for damages due to their production and marketing fuels that contributed to climate change or alleging that the companies have been aware of the adverse effects of climate change for some time but defrauded their investors by failing to adequately disclose those impacts. Such cases could also adversely impact public perception and the demand for fossil fuels and petroleum products.

There are also increasing financial risks for fossil fuel producers as shareholders who are currently invested in fossil-fuel energy companies but are concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-energy related sectors. Institutional lenders who provide financing to fossil-fuel energy companies also have become more attentive to sustainable lending practices and some of them may elect not to provide funding for fossil fuel energy companies. Additionally, the lending practices of institutional lenders have been the subject of intensive lobbying efforts in recent years, oftentimes public in nature, by environmental activists, proponents of the international Paris Agreement, and foreign citizenry concerned about climate change not to provide funding for fossil fuel energy companies. Limitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities. Our own operations could also face limitations on access to capital as a result of these trends, which could adversely affect our business and results of operations.

The adoption and implementation of any Brazilian, international or foreign federal, state or local legislation or regulations imposing obligations on, or limiting emissions of GHGs from, our equipment and operations could require us to incur significant costs to reduce emissions of GHGs associated with our operations. The potential increase in our operating costs could include new costs to operate and maintain our facilities, install new emission controls on our facilities, acquire allowances to authorize our GHG emissions, pay taxes related to our GHG emissions, and administer and manage a GHG emissions program. We may not be able to recover such increased costs through increases in customer prices or rates. In addition, changes in legislative or regulatory policies that make hydrocarbon products more expensive to consume may reduce demand for the energy we provide. These developments could have a material adverse effect on our financial position, results of operations and cash flows. Additionally, litigation and financial risks may result in curtailed gas supply, incurred liability, or other adverse effects on our business, financial condition and results of operations.

Indigenous communities—including, in Brazil, Afro-indigenous (“Quilombola”) communities—are subject to certain protections under international and national laws. There are several indigenous communities that surround our operations in Brazil. We have entered into agreements with some of these communities that mainly provide for the use of their land for our operations, and negotiations with other such communities are ongoing. In the event that we are unable to reach an agreement with indigenous communities, that our relationship with these communities deteriorates in future, or that such communities do not comply with any existing agreements related to our operations, it could have a material adverse effect on our business and results of operations.

Brazil has ratified the International Labor Organization’s Indigenous and Tribal Peoples Convention (“ILO Convention 169”), which is grounded on the principle of consultation and participation of indigenous and traditional communities under the basis of free, prior, and informed consent (“FPIC”). ILO Convention 169 sets forth that governments are to ensure that members of tribes directly affected by legislative or administrative measures, including the grant of government authorizations such as are required for our operations, are consulted through appropriate procedures and through their representative institutions. ILO Convention 169 further states that the consultation must be undertaken aiming at achieving an agreement or consent to the proposed legislative or administrative measures.

Brazilian law does not specifically regulate the FPIC process for indigenous and traditional people affected by undertakings, nor does it set forth that individual members of an affected community shall render their FPIC on an undertaking that may impact them. However, in order to obtain certain environmental licenses for our operations, we are required to comply with the requirements of, consult with, and obtain certain authorizations from a number of institutions regarding the protection of indigenous interests: the National Congress (in specific cases), the Federal Public Prosecutor's Office and the National Indian Foundation (Fundação Nacional do Índio or FUNAI) (for indigenous people) or Palmares Cultural Foundation (Fundação Cultural Palmares) (for Quilombola communities). If we are not able to timely obtain the necessary authorizations or obtain them on favorable terms for our operations in areas where indigenous communities reside, we could face construction delays, increased costs, or otherwise experience adverse impacts on our business and results of operations.

Additionally, the American Convention on Human Rights (“ACHR”), to which Brazil is a party, sets forth rights and freedoms prescribed for all persons, including property rights without discrimination due to race, language, and national or social origin. The ACHR also provides for consultation with indigenous communities regarding activities that may affect the integrity of their land and natural resources. If Brazil’s legal process for consultation and the protection of indigenous rights is challenged under the ACHR and found to be inadequate, it could result in orders or judgments that could ultimately adversely impact our operations. For example, in February 2020, the Interamerican Court of Human Rights (“IACtHR”) found that Argentina had not taken adequate steps, in law or action, to ensure the consulting of indigenous communities and obtaining those communities’ free prior and informed consent for a project impacting their territories. IACtHR further found that Argentina had thus violated the ACHR due to infringements on the indigenous communities’ rights to property, cultural identity, a healthy environment, and adequate food and water by failing to take effective measures to stop harmful, third-party activities on the indigenous communities’ traditional land. As a result, IACtHR ordered Argentina, among other things, to achieve the demarcation and grant of title to the indigenous communities over

their territory and the removal of the third-parties from the indigenous territory. We cannot predict whether this decision will result in challenges regarding the adequacy of existing Brazilian legal requirements related to the protection of indigenous rights, changes to the existing Brazilian government body consultation process, or impact our existing development agreements or our negotiations for outstanding development agreements with indigenous communities in the areas in which we operate. However, if the consultations with indigenous communities potentially impacted by our operations are found to be insufficient, we could experience a material adverse impact to our business and results of operations.

Our business is subject to governmental laws, rules, regulations and requires permits that impose various restrictions and obligations that may have material effects on our results of operations. In addition, each of the applicable regulatory requirements and limitations is subject to change, either through new regulations enacted on the international, federal, state or local level, or by new or modified regulations that may be implemented under existing law. Emerging countries in particular are characterized by frequent legislative and regulatory change, creating uncertainty for businesses who operate in such jurisdictions. The nature and extent of any changes in these laws, rules, regulations and permits may be unpredictable and may have material effects on our business. Future legislation and regulations or changes in existing legislation and regulations, or interpretations thereof, such as those relating to the storage, or regasification of LNG, or its transportation could cause additional expenditures, restrictions and delays in connection with our operations as well as other future projects, the extent of which cannot be predicted and which may require us to limit substantially, delay or cease operations in some circumstances. Revised, reinterpreted or additional laws and regulations that result in increased compliance costs or additional operating costs and restrictions could have an adverse effect on our business, the ability to expand our business, including into new markets, results of operations, financial condition, liquidity and prospects.

Our chartered vessels’ operations in international waters and in the territorial waters of other countries are regulated by extensive and changing international, national and local environmental protection laws, regulations, treaties and conventions in force in international waters, the jurisdictional waters of the countries in which our vessels operate, as well as the countries of our vessels’ registration, including those governing oil spills, discharges to air and water, and the handling and disposal of hazardous substances and wastes. The International Maritime Organization (“IMO”) International Convention for the Prevention of Pollution from Ships of 1973, as amended from time to time, and generally referred to as “MARPOL,” can affect operations of our chartered vessels. In addition, our chartered LNG vessels may become subject to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (the “HNS Convention”), adopted in 1996 and subsequently amended by a Protocol to the HNS Convention in April 2010. Other regulations include, but are not limited to, the designation of Emission Control Areas (“ECAs”) under MARPOL, the IMO International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended from time to time, the International Convention on Civil Liability for Bunker Oil Pollution Damage, the IMO International Convention for the Safety of Life at Sea of 1974, as amended from time to time, the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the “ISM Code”), the IMO International Convention on Load Lines of 1966, as amended from time to time and the International Convention for the Control and Management of Ships’ Ballast Water and Sediments in February 2004.

Moreover, the overall trends are towards more regulations and more stringent requirements which are likely to add to our costs of doing business. For example, the IMO has promulgated regulations limiting the sulphur content of fuel oil for ships to 0.5 weight percent starting January 1, 2020. We contract with leading vessel providers in the LNG market and look for them to take the lead in maintaining compliance with all such requirements, although the terms of our charter agreements may call for us to bear some or all of the associated costs. While we believe we are similarly situated with respect to other companies that charter vessels, we cannot assure you that these requirements will not have a material effect on our business.

Our chartered vessels operating in Brazilian waters, now or in the future, will also be subject to various federal, state and local laws and regulations relating to protection of the environment, including waste handling

and disposal, site remediation, and water and air quality, among others. Any operations in other jurisdictions may be subject to analogous laws. In some cases, these laws and regulations require governmental permits and authorizations before conducting certain activities. These environmental laws and regulations may impose substantial penalties for noncompliance and substantial liabilities for pollution. Failure to comply with these laws and regulations may result in substantial civil, administrative and criminal fines and penalties. As with the industry generally, our chartered vessels’ operations will entail risks in these areas, and compliance with these laws and regulations, which may be subject to frequent revisions and reinterpretation, may increase our overall cost of business.

The hull and machinery of every large, oceangoing commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the Safety of Life at Sea Convention. All vessels in our current fleet are each certified by DNV GL.

As part of the certification process, a vessel must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle, under which the machinery is surveyed periodically over a five-year period. Each of the vessels in our existing fleet is on a planned maintenance system approval, and as such the classification society attends on board once every year to verify that the maintenance of the equipment on board is done correctly. Each of the vessels in our existing fleet is required to be qualified within its respective classification society for dry-docking once every five years subject to an intermediate underwater survey done using an approved diving company in the presence of a surveyor from the classification society.

If any vessel does not maintain its class or fails any annual survey, intermediate survey or special survey, the vessel will be unable to trade between ports and will be unemployable. We would lose revenue while the vessel was off-hire and incur costs of compliance, which would negatively impact our results of operations.

The design, construction and operation of energy-related infrastructure, including our existing and proposed facilities, the import and export of LNG and the transportation of natural gas, are highly regulated activities at the federal, state and local levels. Approvals of the Brazilian Ministry of Mines and Energy (“MME”) under Article 7 of the Law No. 9,074/1995, as well as several other material governmental and regulatory permits, approvals and authorizations, including under federal environmental laws and their state analogues, may be required in order to construct and operate a gas-powered thermoelectric plant. Permits, approvals and authorizations obtained from the MME, ANEEL, ANP, ANTAQ and other federal and state regulatory agencies also contain ongoing conditions, and additional requirements may be imposed. Certain federal permitting processes may trigger a requirement to undergo detailed and time-consuming assessments and technical studies for any actions that have the potential to significantly impact the environment. Compliance with such processes may extend the time and/or increase the costs for obtaining necessary governmental approvals associated with our operations and create independent risk of legal challenges to the adequacy of any required analysis, which could result in delays that may adversely affect our business, contracts, financial condition, operating results, cash flow, liquidity and profitability. We may also be subject to analogous and additional requirements in other jurisdictions, including with respect to land use approvals needed to construct and operate our facilities.

We cannot control the outcome of any review and approval process, including whether or when any such permits, approvals and authorizations will be obtained, the terms of their issuance, or possible appeals or other potential interventions by third parties that could interfere with our ability to obtain and maintain such permits, approvals and authorizations or the terms thereof. If we are unable to obtain and maintain such permits, approvals and authorizations on favorable terms, we may not be able to recover our investment in our projects. Many of these permits, approvals and authorizations require public notice and comment before they can be issued, which can lead to delays to respond to such comments, and even potentially to revise the permit application. There is no assurance that we will obtain and maintain these governmental permits, approvals and

authorizations on favorable terms, or that we will be able to obtain them on a timely basis, and failure to obtain and maintain any of these permits, approvals or authorizations could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects. Moreover, these permits, approvals and authorizations could be subject to administrative and judicial challenges, which could delay and protract the process for obtaining and implementing permits and can also add significant costs and uncertainty.

We conduct business throughout the world and our business activities and services are subject to various applicable laws and regulations of the U.K. and other countries. Although we take precautions to comply with all such laws and regulations, violations of governmental control and economic sanctions laws and regulations could result in negative consequences to us, including government investigations, sanctions, criminal, administrative or civil fines or penalties, more onerous compliance requirements, loss of authorizations needed to conduct aspects of our international business, reputational harm and other adverse consequences.

We are also subject to anti-corruption laws and regulations, including the U.S. Foreign Corrupt Practices Act (“FCPA”) and the Bribery Act 2010 of the United Kingdom (“UK Bribery Act”), which generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business and/or other benefits. We are also subject to Law No. 12.846/2013, a Brazilian statute (the “Clean Company Act”), which generally prohibits companies and their intermediaries from making improper payments to foreign or local officials whether or not such payments are for the purpose of obtaining or keeping business and/or other benefits. Although we have adopted policies and procedures that are designed to ensure that we, our employees and other intermediaries comply with the FCPA, the UK Bribery Act and the Clean Company Act, there is no assurance that these policies and procedures will work effectively all of the time or protect us against liability under anti-corruption laws and regulations, including the FCPA, the UK Bribery Act and the Clean Company Act, for actions taken by our employees and other intermediaries with respect to our business or any businesses that we may acquire. If we are not in compliance with anti-corruption laws and regulations, including the FCPA, the UK Bribery Act and the Clean Company Act, we may be subject to criminal, civil and administrative penalties and other remedial measures, including changes or enhancements to our procedures, policies and control, as well as potential personnel change and disciplinary actions, which could have an adverse impact on our business, results of operations and financial condition.

In addition, in certain countries we serve or expect to serve our customers through third-party agents and other intermediaries, such as customs agents. Violations of applicable trade and economic sanctions laws and regulations by these third-party agents or intermediaries may also result in adverse consequences and repercussions to us. There can be no assurance that we and our agents and other intermediaries will be in compliance with economic sanctions, laws and regulations in the future. In such event of non-compliance, our business and results of operations could be adversely impacted.

Changing laws, regulations and standards could create greater reporting obligations and compliance requirements on companies such as ours. Whilst the regulatory environment continues to evolve, we have invested in, and intend to continue to invest in, reasonably necessary resources to comply with evolving standards and maintain high standards of corporate governance and public disclosure. Recent examples of increased regulation include the UK Modern Slavery Act 2015 and the GDPR. The GDPR, for instance, broadens the scope of personal privacy laws to protect the rights of European Union citizens and requires organizations to report on data breaches within 72 hours and be bound by more stringent rules for obtaining the consent of individuals on how their data can be used.

Non-compliance with such regulation could result in governmental or other regulatory claims or significant fines that could have an adverse effect on our business, financial condition, results of operations and cash flows.

We currently conduct a meaningful portion of our business in Brazil. As a result, our current business, results of operations, financial condition and prospects are materially dependent upon economic, political and other conditions and developments in Brazil. For example, on July 8, 2019, Petróleo Brasileiro S.A. – Petrobras (“Petrobras”) the state-owned oil company in Brazil, entered into an agreement (Termo de Compromisso de Cessão de Prática) with Brazilian antitrust authorities (Conselho Administrativo de Defesa Econômica - CADE) pursuant to which it has agreed to divest its equity participation in the gas pipelines and state gas distribution companies in Brazil by December 31, 2021. Such divestment plan, intended to end Petrobras’s monopoly on the distribution of gas in Brazil, will increase competition and may affect our business.

We currently have interests and operations in Brazil and currently intend to expand into additional markets in Latin America, Southeast Asia, the Indian Subcontinent, West Africa and Europe, and such interests are subject to governmental regulation in each market. The governments in these markets differ widely with respect to structure, constitution and stability and some countries lack mature legal and regulatory systems. Weaknesses in legal systems and legislation in many of these countries create uncertainty for investments and business due to changing requirements that may be costly, incoherent and contradictory, limited budgets for judicial systems, questionable judicial interpretations and/or inadequate regulatory regimes. To the extent that our operations depend on governmental approval and regulatory decisions, the operations may be adversely affected by changes in the political structure or government representatives in each of the markets in which we operate. Recent political, security and economic changes have resulted in political and regulatory uncertainty in certain countries in which we operate or may pursue operations. Changes in legislative and regulatory provisions in these countries, which we may not be able to anticipate, could have a material adverse effect on our business, financial condition, results of operations and prospects.

Furthermore, government authorities have a high degree of discretion in many of the markets in which we currently operate, and have sometimes exercised their discretion in ways that may be perceived as selective or arbitrary, or in a manner that could be seen as being influenced by political or commercial considerations. Moreover, many of the governments in the countries in which we currently operate have the power in certain circumstances, by regulation or other government action, to interfere with the performance of contracts or to terminate them or declare them null and void. Governmental actions may include withdrawal of licenses, withholding of permits, criminal prosecutions and civil actions. In some countries, when the economic environment has deteriorated and in order to compensate for the resulting revenue shortages, authorities have imposed new regulations, in particular relating to tax and customs duties, sometimes unexpectedly. There is no guarantee that legislative authorities in the countries in which we currently operate will not pass new laws or regulations or amend existing laws and regulations in a manner that would significantly negatively impact our business model or may even render our business model no longer viable.

Some of these countries have experienced political, security and economic instability in the recent past and may experience instability in the future. Any slowdown or contraction affecting the local economy in a jurisdiction in which we operate could negatively affect the ability of our customers to purchase LNG, natural gas, steam or power from us or to fulfill their obligations under their contracts with us. If the economy in Brazil or other jurisdictions in which we operate worsens because of, for example:

In particular, the Brazilian economy has been characterized by frequent and occasionally extensive intervention by the Brazilian government and unstable economic cycles. The Brazilian government has often changed monetary, taxation, credit, tariff and other policies to influence the course of Brazil’s economy. The Brazilian government’s actions to control inflation and implement other policies have at times involved wage and price controls, blocking access to bank accounts, imposing capital controls and limiting imports into Brazil. In addition, Brazilian markets and politics have been characterized by considerable instability in recent years due to uncertainties derived from the ongoing corruption investigations, the conviction of Former President Luiz Inácio Lula da Silva, the impeachment of Former President Dilma Rousseff and the election of Congressman Jair Bolsonaro. The spread of COVID-19 in Brazil has resulted in heightened uncertainty and political instability as government officials debate appropriate response measures. These uncertainties and any measures adopted by the new administration may increase market volatility and political instability.

We operate in, or are pursuing projects which could lead to future operations in, areas of the world where there are significant uncertainties, including those we have not yet considered and heightened political and security risks. We identify higher risk countries in which we operate through our experiences, the experiences of our partners and publicly available third party information such as Transparency International, the World Bank and TRACE International, and monitor the specific risks associated with countries in which we operate. Our operations may be subject to higher political and security risks than operations in other areas of the world. Any extreme levels of political instability resulting in changes of governments, internal conflict, unrest and violence could lead to economic disruptions and shutdowns in industrial activities.

In addition, we may maintain insurance coverage for only a portion of the risks incidental to doing business in higher risk countries. There also may be certain risks covered by insurance where the policy does not reimburse us for all of the costs related to a loss. For example, any claims covered by insurance will be subject to deductibles, which may be significant. In the event that we incur business interruption losses with respect to one or more incidents, they could have a material adverse effect on our results of operations.

Our consolidated financial statements are presented in U.S. dollars. Therefore, fluctuations in exchange rates used to translate other currencies into U.S. dollars will impact our reported consolidated financial condition, results of operations and cash flows from period to period. These fluctuations in exchange rates will also impact the value of our investments and the return on our investments. Additionally, some of the jurisdictions in which we operate may limit our ability to exchange local currency for U.S. dollars.

A portion of our cash flows and expenses may in the future be incurred in currencies other than the U.S. dollar. Our material counterparties’ cash flows and expenses may be incurred in currencies other than the U.S. dollar. We cannot be sure that non-U.S. currencies will not be subject to volatility and depreciation or that the current exchange rate policies affecting these currencies will remain the same. As a result, our expenses may, from time to time, increase relative to our revenues as a result of fluctuations in exchange rates, particularly between the U.S. dollar and the Brazilian real, which could affect the amount of net income that we report in future periods. Depreciation or volatility of any of these currencies against the U.S. dollar or other currencies could cause counterparties to be unable to pay their contractual obligations under our agreements or to lose confidence in us, which could also affect the amount of net income that we report in future periods.

Upon completion of this offering, the Sponsors will initially own an aggregate of 100,000,000 common shares representing approximately 81.2% of our voting power (or approximately 79.0% if the underwriters’ option to purchase additional common shares is exercised in full). The Sponsors’ beneficial ownership of greater than 50% of our voting shares means the Sponsors will be able to control matters requiring shareholder approval, including the election of directors, changes to our organizational documents and significant corporate

transactions. This concentration of ownership makes it unlikely that any other holder or group of holders of our common shares will be able to affect the way we are managed or the direction of our business. The interests of the Sponsors with respect to matters potentially or actually involving or affecting us, such as future acquisitions, financings and other corporate opportunities and attempts to acquire us, may conflict with the interests of our other shareholders.

Furthermore, in connection with this offering, we will enter into a Shareholders’ Agreement with the Sponsors. The Shareholders’ Agreement will provide the Sponsors with the right to designate a certain number of nominees to our board of directors so long as the Sponsors and their respective affiliates collectively beneficially own at least 5% of the outstanding common shares. See “Certain Relationships and Related Transactions—Agreements with Affiliates in Connection with the Transactions—Shareholders’ Agreement.”

Given this concentrated ownership, the Sponsors would have to approve any potential acquisition of us. The existence of a significant shareholder may have the effect of deterring hostile takeovers, delaying or preventing changes in control or changes in management, or limiting the ability of our other shareholders to approve transactions that they may deem to be in the best interests of our company. Moreover, the Sponsors’ concentration of share ownership may adversely affect the trading price of our common shares to the extent investors perceive a disadvantage in owning shares of a company with a significant shareholder.

In addition, the Sponsors may have different tax positions from us that could influence their decisions regarding whether and when to support the disposition of assets and the incurrence or refinancing of new or existing indebtedness. In addition, the determination of future tax reporting positions, the structuring of future transactions and the handling of any challenge by any taxing authority to our tax reporting positions may take into consideration the Sponsors’ tax or other considerations, which may differ from our considerations or those of our other shareholders.

The Sponsors are not prohibited from engaging in other businesses or activities, including those that might be in direct competition with us. In addition, the Sponsors may compete with us for investment opportunities and may own an interest in entities that compete with us. Additionally, our governing documents will provide that if any of our officers or directors who are affiliates of the Sponsors or any of their respective affiliates acquire knowledge of a potential transaction that could be a corporate opportunity, they have no duty, to the fullest extent permitted by law, to offer such corporate opportunity to us, our common shareholders or our affiliates. This may create actual and potential conflicts of interest between us and the Sponsors and result in less than favorable treatment of us and our common shareholders.

We do not currently have any of the executive officers who manage our business on our payroll, as we currently rely on third-party arrangements. Mr. Antonello, our Chief Executive Officer, is currently employed by Magni Partners (Bermuda) Limited (“Magni Bermuda”) and provides services to us pursuant to a secondment agreement we have entered into with Magni Bermuda. Mr. Maranhão, our Chief Financial Officer, is currently employed by Golar Management and provides services to us pursuant to a management and administrative services agreement that we have entered into with Golar Management. Our officers, who are employed by Magni Bermuda and Golar Management, are not required to work full-time on our affairs and also perform services for affiliates of their respective employers, which conduct substantial businesses and activities of their own in which we have no economic interest. However, because our Chief Executive Officer and Chief Financial Officer currently expend substantially all of their time on the business and affairs of Hygo, we are in the process of entering into direct employment arrangements with Messrs. Antonello and Maranhão to provide for full time dedication to their work for us as a result of their increasing responsibility and actual expenditure of time. Until those agreements are finalized, there could be competition for the time and effort of our officers. Further, as we expand our operations, we will require more of our management and will need not only to replace the current arrangement with full time commitments but also expand our team beyond those supplied by Magni Bermuda and Golar Management. If we are unable to maintain access to the time and effort of our officers or are otherwise unable to develop our management team it could have a material adverse effect on our business, results of operations and financial condition. Please read “Management.”

Pursuant to a management and administrative services agreement, Golar Management will provide us with significant management, administrative, financial and other support services. We will reimburse Golar Management for its reasonable costs and expenses incurred in connection with the provision of these services. In addition, we will pay Golar Management a management fee equal to 5% of its costs and expenses incurred in connection with providing services to us. We expect that we will pay Golar Management approximately $7 million in total under the management and administrative services agreement for the twelve months ending December 31, 2020.

For a description of the management and administrative services agreement, please read “Certain Relationships and Related Transactions.” The fees and expenses payable pursuant to the management and administrative services agreement will be payable without regard to our financial condition or results of operations.

Because we are a Bermuda exempted company, the rights of holders of our common shares will be governed by Bermuda law and our memorandum of association and bye-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders in other jurisdictions, including with respect to, among other things, rights related to interested directors, amalgamations, mergers and acquisitions, takeovers, the exculpation and indemnification of directors and shareholder lawsuits.

Among these differences is a Bermuda law provision that permits a company to exempt a director from liability for any negligence, default or breach of a fiduciary duty except for liability resulting directly from that director’s fraud or dishonesty. Our bye-laws will provide that no director or officer shall be liable to us or our shareholders unless the director’s or officer’s liability results from that person’s fraud or dishonesty. Our bye-laws will also require us to indemnify a director or officer against any losses incurred by that director or officer resulting from their negligence or breach of duty, except where such losses are the result of fraud or dishonesty. Accordingly, we carry directors’ and officers’ insurance to protect against such a risk.

In addition, under Bermuda law, the directors of a Bermuda company owe their duties to that company and not to the shareholders. Bermuda law does not, generally, permit shareholders of a Bermuda company to bring an action for a wrongdoing against the company or its directors, but rather the company itself is generally the proper plaintiff in an action against the directors for a breach of their fiduciary duties. Moreover, class actions and derivative actions are generally not available to shareholders under Bermuda law. These provisions of Bermuda law and our bye-laws, as well as other provisions not discussed here, may differ from the law of jurisdictions with which shareholders may be more familiar and may substantially limit or prohibit a shareholder’s ability to bring suit against our directors or in the name of the company. The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company’s memorandum of association or bye-laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company’s shareholders than that which actually approved it.

It is also worth noting that under Bermuda law, our directors and officers are required to disclose to our board any material interests they have in any contract entered into by our company or any of its subsidiaries with third parties. Our directors and officers are also required to disclose their material interests in any corporation or other entity which is party to a material contract with our company or any of its subsidiaries. A director who has disclosed his or her interests in accordance with Bermuda law may participate in any meeting of our board, and may vote on the approval of a material contract, notwithstanding that he or she has a material interest.

We are incorporated under the laws of Bermuda. As a result, our corporate affairs are governed by the Companies Act, which differs in some material respects from laws typically applicable to U.S. corporations and shareholders, including the provisions relating to interested directors, amalgamations, mergers and acquisitions, takeovers,

shareholder lawsuits and indemnification of directors. Generally, the duties of directors and officers of a Bermuda company are owed to the company only. Shareholders of Bermuda companies may only take action against directors or officers of the company in limited circumstances. The circumstances in which derivative actions may be available under Bermuda law are substantially more proscribed and less clear than they would be to shareholders of U.S. corporations. The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company’s memorandum of association or bye-laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company’s shareholders than that which actually approved it.

When the affairs of a company are being conducted in a manner that is oppressive or prejudicial to the interests of some shareholders, one or more shareholders may apply to the Supreme Court of Bermuda, which may make such order as it sees fit, including an order regulating the conduct of the company’s affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company. In addition, the rights of holders of our common shares and the fiduciary responsibilities of our directors under Bermuda law are not as clearly established as under statutes or judicial precedent in existence in jurisdictions in the United States, particularly the State of Delaware. Therefore, holders of our common shares may have more difficulty protecting their interests than would shareholders of a corporation incorporated in a jurisdiction within the United States.

Our bye-laws will contain provisions that could make it more difficult for a third-party to acquire us without the consent of our board of directors, including the ability of our board of directors to determine the powers, preferences and rights of preference shares and to cause us to issue the preference shares without shareholder approval.

These provisions could make it more difficult for a third-party to acquire us, even if the third-party’s offer may be considered beneficial by many shareholders. As a result, shareholders may be limited in their ability to obtain a premium for their common shares. See “Description of Share Capital” for a discussion of these provisions.

We, and most of our subsidiaries, are incorporated in jurisdictions outside the U.S. and substantially all of our assets and those of our subsidiaries are located outside the U.S. In addition, most of our directors and officers are non-residents of the U.S., and all or a substantial portion of the assets of these non-residents are located outside the U.S. As a result, it may be difficult or impossible for U.S. investors to serve process within the U.S. upon us, our subsidiaries, or our directors and officers or to enforce a judgment against us for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countries in which we or our subsidiaries are incorporated or where our or our subsidiaries’ assets are located would enforce judgments of U.S. courts obtained in actions against us or our subsidiaries based upon the civil liability provisions of applicable U.S. federal and state securities laws, or would enforce, in original actions, liabilities against us or our subsidiaries based on those laws.

The initial public offering price of $19.50 per common share (the midpoint of the price range set forth on the cover of this prospectus) exceeds our pro forma as adjusted net tangible book value of $5.25 per common share. Based on the initial public offering price of $19.50 per common share (the midpoint of the price range set forth on the cover of this prospectus), shareholders will incur immediate and substantial dilution of $14.25 per common share in the pro forma as adjusted net tangible book value per share. Please read “Dilution.”

We do not plan to declare cash dividends on our common shares in the foreseeable future. Consequently, your only opportunity to achieve a return on your investment in us will be if you sell your common shares at a price greater than you paid for them. There is no guarantee that the price of our common shares that will prevail in the market will ever exceed the price that you pay in this offering.

Our bye-laws will authorize us to issue, without the approval of our shareholders, one or more classes or series of preferred shares having such designations, preferences, limitations and relative rights, including preferences over our common shares respecting dividends and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred shares could adversely impact the voting power or value of our common shares. For example, we might grant holders of preferred shares the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred shares could affect the residual value of the common shares.

After this offering, we will have 123,100,000 common shares outstanding, assuming no exercise of the underwriters’ option to purchase additional common shares. The common shares sold in this offering will be freely tradable without restriction under the Securities Act except for any common shares that may be held or acquired by our directors, officers or affiliates, which will be restricted securities under the Securities Act. The common shares held by the Sponsors will be subject to resale restrictions under a 180-day lock-up agreement with the underwriters. Each of the lock-up agreements with the underwriters may be waived in the discretion of certain of the underwriters. Sales by the Sponsors or other large holders of a substantial number of our common shares in the public markets following this offering, or the perception that such sales might occur, could have a material adverse effect on the price of our common shares or could impair our ability to obtain capital through an offering of equity securities. In addition, we have agreed to provide registration rights to the Sponsors. Please read “Shares Eligible for Future Sale.”

Prior to this offering, there has been no public market for the common shares. After this offering, there will be only 23,100,000 publicly traded common shares (assuming the underwriters’ option to purchase additional common shares is not exercised). We do not know the extent to which investor interest will lead to the development of a trading market or how liquid that market might be. Common shareholders may not be able to resell their common shares at or above the initial public offering price. Additionally, the lack of liquidity may result in wide bid-ask spreads, contribute to significant fluctuations in the market price of the common shares and limit the number of investors who are able to buy the common shares.

The initial public offering price for our common shares will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of the price of the common shares that will prevail in the trading market. The market price of our common shares may decline below the initial public offering price. The market price of our common shares may also be influenced by many factors, some of which are beyond our control, including:

Upon completion of this offering, the Sponsors will hold a majority of the voting power of our shares. As a result, we expect to be a controlled company within the meaning of NASDAQ corporate governance standards. Under NASDAQ rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company is a controlled company and may elect not to comply with certain NASDAQ corporate governance requirements, including the requirements that:

These requirements will not apply to us as long as we remain a controlled company. A controlled company does not need its board of directors to have a majority of independent directors or to form independent compensation and nominating and governance committees. Following this offering, we intend to utilize some or all of these exemptions. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of NASDAQ. See “Management.”

As a Bermuda exempted company listed on the Nasdaq Global Select Market, we are subject to the Nasdaq Stock Market corporate governance listing standards. However, the Nasdaq Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in Bermuda, which is our home country, may differ significantly from the Nasdaq Stock Market corporate governance listing standards. We may rely on home country practice with respect to our corporate governance after we complete this offering. If we choose to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise would enjoy under the Nasdaq Stock Market corporate governance listing standards applicable to U.S. domestic issuers.

The Economic Substance Act 2018 and the Economic Substance Regulations 2018 of Bermuda (the “Economic Substance Act” and the “Economic Substance Regulations”, respectively) became operative on December 31, 2018. The Economic Substance Act applies to every registered entity in Bermuda that engages in a relevant activity and requires that every such entity shall maintain a substantial economic presence in Bermuda. A relevant activity for the purposes of the Economic Substance Act is banking business, insurance business, fund management business, financing business, leasing business, headquarters business, shipping business, distribution and service center business, intellectual property holding business and conducting business as a holding entity.

The Economic Substance Act provides that a registered entity that carries on a relevant activity complies with economic substance requirements if (a) it is directed and managed in Bermuda, (b) its core income-generating activities (as may be prescribed) are undertaken in Bermuda with respect to the relevant activity, (c) it maintains adequate physical presence in Bermuda, (d) it has adequate full time employees in Bermuda with suitable qualifications and (e) it incurs adequate operating expenditure in Bermuda in relation to the relevant activity.

A registered entity that carries on a relevant activity is obliged under the Economic Substance Act to file a declaration in the prescribed form (the “Declaration”) with the Registrar of Companies (the “Registrar”) on an annual basis.

If we fail to comply with our obligations under the Economic Substance Act or any similar law applicable to us in any other jurisdictions, we could be subject to financial penalties and spontaneous disclosure of

information to foreign tax officials in related jurisdictions and may be struck from the register of companies in Bermuda or such other jurisdiction. Any of these actions could have a material adverse effect on our business, financial condition and results of operations.

Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis as press releases, distributed pursuant to the rules and regulations of the Nasdaq Global Select Market. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for “emerging growth companies,” including certain requirements relating to auditing standards and compensation disclosure. We are classified as an emerging growth company. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosures regarding executive compensation required of larger public companies, or (iv) hold nonbinding advisory votes on executive compensation. We currently intend to take advantage of the exemptions described above. We have also elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result, our consolidated financial statements may not be comparable to companies that comply with public company effective dates, and our shareholders and potential investors may have difficulty in analyzing our operating results if comparing us to such companies. We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1.07 billion of revenues in a fiscal year, have more than $700.0 million in market value of our common shareholders held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period.

To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our common shares to be less attractive as a result, there may be a less active trading market for our common shares and our common share price may be more volatile.

Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a publicly traded company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We cannot be certain that our efforts to develop and maintain our internal controls will be successful, that we will be able to maintain adequate controls over our financial processes and reporting in the future or that we will be able to comply with our obligations under Section 404 of the Sarbanes-Oxley Act. In connection with our efforts to maintain effective internal controls, we will need to hire additional accounting personnel as well as to make additional investments in software and systems. Any failure to develop or maintain effective internal controls, or difficulties encountered in implementing or improving our internal controls, could harm our operating results or cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common shares.

We have no history operating as a publicly traded company. As a newly public company with shares listed on NASDAQ, we will need to comply with an extensive body of regulations that did not apply to us previously, including certain provisions of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, regulations of the SEC and NASDAQ requirements. We expect these rules and regulations will increase our legal, accounting, compliance and other expenses that we did not incur prior to this offering and make some activities more time-consuming and costly. For example, as a result of becoming a public company, we intend to add independent directors and create additional board committees. We have entered into a management and administrative services agreement with Golar Management, an affiliate of Golar LNG, pursuant to which Golar Management provides us with certain back office and management services for the vessels in our fleet and charge us for the expenses incurred to provide these services. Golar Management will also continue to provide compliance services for the foreseeable future and any transition will take place over time. In addition, we may incur additional costs associated with our public company reporting requirements and maintaining directors’ and officers’ liability insurance. Because of the limitations in coverage for directors, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We estimate that we will incur approximately $3 million of incremental costs per year associated with being a publicly traded company; however, it is possible that our actual incremental costs of being a publicly traded company will be higher than we currently estimate. We are currently evaluating and monitoring developments with respect to these rules, which may impose additional costs on us and have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.

The trading market for our common shares will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose viability in the financial markets, which in turn could cause our share price or trading volume to decline.

Tax laws, regulations and treaties are highly complex and subject to interpretation. Consequently, we are subject to changing laws, treaties and regulations in and between the countries in which we operate. Our tax expense is based on our interpretation of the tax laws in effect at the time the expense was incurred. A change in tax laws, regulations, or treaties, or in the interpretation thereof, could result in a materially higher tax expense or a higher effective tax rate on our earnings.

A foreign corporation will be treated as a “passive foreign investment company” (a “PFIC”), for U.S. federal income tax purposes if, after applying certain look-through rules with respect to the income and assets of its subsidiaries, either (i) at least 75% of its gross income during the taxable year consists of “passive income” or (ii) the average percentage by value of the corporation’s assets during such taxable year that produce or are held for the production of “passive income” is at least 50%. For purposes of these tests, “passive income” includes dividends, interest, gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute “passive income.” U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC, and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

Based on our current and expected future method of operation, and on the opinion of Vinson & Elkins L.L.P., our U.S. counsel, we expect that we will not be treated as a PFIC for the current or any subsequent year. We have represented to our U.S. counsel that more than 25% of our gross income for each year was or will be income that our U.S. counsel has opined, based on current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations promulgated thereunder (“Treasury Regulations”) and current administrative rulings and court decisions, should be non-passive income and that the average percentage by value of our assets for each year that produce or are held for the production of such non-passive income is at least 50%. Our U.S. counsel’s opinion is based on certain representations, valuations and projections regarding our income and assets and is conditioned on the accuracy of such representations, valuations and projections. While we believe such representations, valuations and projections to be accurate, no assurance can be given that they will be accurate in the future. In addition, although there is substantial legal authority supporting our position consisting of case law and U.S. Internal Revenue Service (“IRS”) pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes, there is also case law which characterizes certain time charter income as rental income rather than services income for other tax purposes. If the reasoning of this case law were extended to the PFIC context, the gross income we derive or are deemed to derive from our time chartering activities might be treated as rental income, and we might be deemed a PFIC.

As described above, we indirectly own a 50% interest in CELSE, which recently completed construction of a gas-powered power plant, and expect to invest in additional power plants in the future. We believe the gross income we are deemed to derive pursuant to the applicable look-through rules from the generation and sale of power is active business income and does not constitute “passive income” under the PFIC provisions of the Code. Existing Treasury Regulations, however, have not been revised to address changes to the statutory provisions governing when gains from the sale of commodities are treated as giving rise to active business income. Further, the current PFIC statutory and regulatory provisions do not address how that active business income exception applies when the relevant commodities income and related activities arise in subsidiaries of the foreign corporation being tested for PFIC status. In light of that lack of guidance, there can be no assurance that the IRS or a court will agree with our position that CELSE’s income from power generation and sales qualifies for the active business income exception.

Because PFIC status depends upon the composition of a company’s income and assets and the market value of its assets from time to time, and because there is no controlling authority for determining whether certain types of our income constitute passive income for PFIC purposes, there can be no assurance that we will not be considered a PFIC for the current or any future taxable year. Furthermore, the PFIC rules may change, which could result in us being treated as a PFIC in the future as a result of such change in law. For example, Treasury Regulations that were recently proposed under the PFIC statutory provisions may affect the characterization of our income generated by the operation of our vessels through the Cool Pool. If such proposed Treasury Regulations are finalized, there is a risk that our Cool Pool income and assets that we currently treat as active could instead be treated as passive and we could therefore be classified as a PFIC. However, it is not currently known if, when, or the extent to which such proposed Treasury Regulations will be finalized.

If we were a PFIC for any taxable year, our U.S. shareholders would face adverse U.S. tax consequences and certain information reporting requirements regardless of whether we remain a PFIC in subsequent years.

Under the PFIC rules, unless those shareholders make a certain U.S. federal income tax election (which election could itself have adverse consequences for such shareholders), such shareholders would be liable to pay U.S. federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of our common shares, as if the excess distribution or gain had been recognized ratably over the shareholder’s holding period of our common shares.

Under the Code, 50% of the gross shipping income of a vessel owning or chartering corporation that is attributable to transportation that begins or ends, but that does not both begin and end, in the U.S., is treated as U.S. source shipping income and may be subject to a 4% U.S. federal income tax without allowance for deduction (to the extent not considered to be “effectively connected” with the conduct of a U.S. trade or business as described below), unless that corporation qualifies for exemption from tax under Section 883 of the Code and the applicable Treasury Regulations promulgated thereunder. We expect that we will qualify for this statutory tax exemption beginning in the 2021 tax year. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption and thereby become subject to U.S. federal income tax on our U.S. source income. Therefore, we can give no assurances that this tax exemption will apply to us or to any of our subsidiaries.

To the extent the benefits of the Section 883 exemption are unavailable and our U.S. source shipping income or regasification and storage income is considered to be “effectively connected” with the conduct of a U.S. trade or business (as described below), any such “effectively connected” income, net of applicable deductions, would be subject to the U.S. federal corporate income tax, currently imposed at a rate of 21%. In addition, we may be subject to the 30% “branch profits” taxes on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of our U.S. trade or business. Our U.S. source shipping income would be considered “effectively connected” with the conduct of a U.S. trade or business only if:

We believe that our vessel operations will not give rise to these conditions because we will not have, nor permit circumstances that would result in having, a fixed place of business in the United States or any vessel sailing to or from the United States on a regularly scheduled basis.

We do not expect our income we are deemed to earn from power generation activities to be considered “effectively connected” with the conduct of a U.S. trade or business, as we expect, based on our current and anticipated activities, all power generation activities will be conducted outside of the United States. See “Business—Taxation of Hygo—United States Taxation—Taxation of Operating Income” for a more detailed discussion.

Brazilian corporations are subject to two annual corporate income taxes, which are levied on total net income, as adjusted according to applicable tax law: (i) Corporate Income Tax, at approximately a 25% rate, and (ii) Social Contribution on Net Profit, at a 9% rate (and thus an aggregate tax rate of approximately 34%). Dividends distributed to a shareholder are fully exempted from tax, irrespective of the jurisdiction in which the shareholder is domiciled.

A bill to be voted on by the Brazilian congress would reinstate progressive taxation of dividends, while reducing progressively the taxation on corporate net income. If that bill is approved, it may affect our after-tax revenues.

Revenues derived from energy sales are subject to two monthly federal social contribution taxes that are levied on gross revenues: (i) the Contribuição para o Programa de Integração Social (the “PIS”), at a rate of 1.65%, and (ii) the Contribuição para o Financiamento da Seguridade Social (the “COFINS”), at a rate of 7.6%.

These rates are applicable for entities subject to the non-cumulative regime, which allows the taxpayer to accrue PIS and COFINS credits with respect to eligible expenses and offset them against PIS and COFINS due on their revenue.

In addition, energy sales within a particular state are subject to the Imposto sobre Circulação de Mercadorias e Serviços (the “ICMS”), which is a state-specific value added tax. The applicable rate varies depending on the legislation of each state (usually ranging from 18% to 30%). In interstate sales, the outflow of energy is exempted from the ICMS (unless such energy is sold to non-taxpayers). Nonetheless, sellers of energy may be required to pay an amount equal to the amount of ICMS levied on the acquirer in the destination state under a substitute regime. Further discussion of rates under the PIS, COFINS, and ICMS can be found in “Taxation of Hygo—Brazilian Taxation.”

The Brazilian Federal Government recently proposed a bill that would replace the PIS and COFINS with a new tax, the Contribution on Goods and Services (“CBS”), levied at a rate of 12% on gross revenues with tax credit provisions like the PIS and COFINS.

However, there is also a constitutional amendment currently being discussed in the Brazilian congress that would abolish such taxes (including the CBS, if approved) and replace them with a single value-added tax on goods and services. This constitutional amendment or other tax legislation could affect our revenues.

We expect to receive approximately $420.9 million of net proceeds from this offering, based upon the assumed initial public offering price of $19.50 per share (the midpoint of the price range set forth on the cover of this prospectus) and after deducting underwriting discounts and estimated offering expenses. If the underwriters exercise their option to purchase additional common shares in full, we expect the estimated net proceeds to be approximately $484.7 million. See “Underwriting.”

We intend to use the net proceeds to fund (i) $80.0 million of capital expenditures related to the Barcarena Terminal and acquiring all remaining outstanding equity interests in the Barcarena Terminal (which would give Hygo a 100% indirect equity interest in both CELBA and CELBA 2), (ii) $40.0 million of capital expenditures related to the Santa Catarina Terminal and (iii) $180.0 million to be paid to Stonepeak in redemption of the preference shares in the Recapitalization, which amount includes accrued and unpaid dividends of approximately $41.5 million. We intend to use the remaining net proceeds of $120.9 million for working capital and general corporate purposes. If the underwriters exercise their option to purchase additional common shares in full, the additional net proceeds will be approximately $63.8 million. The net proceeds from any exercise of such option will be used for general corporate purposes, including the development of future projects, such that a total of $184.7 million of the net proceeds of this offering will be used for working capital and general corporate purposes. For additional information on the Recapitalization and the terms of the preference shares, please see “Summary—Our History and Relationship with Our Sponsors” and “Description of Share Capital—Stonepeak Preference Shares.”

Pending any use, the net proceeds of this offering may be invested in short-term, interest-bearing investment-grade securities.

The following table sets forth our cash and cash equivalents and our capitalization as of June 30, 2020:

You should read this table in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes contained elsewhere in this prospectus.

Dilution is the amount by which the offering price per common share in this offering will exceed the pro forma net tangible book value per share after the offering. On a pro forma basis as of June 30, 2020, after giving effect to the offering of common shares, including the application of the net proceeds as described in “Use of Proceeds,” our net tangible book value was approximately $646.6 million, or $5.25 per common share. Purchasers of common shares in this offering will experience substantial and immediate dilution in pro forma net tangible book value per common share for financial accounting purposes, as illustrated in the following table.

The following table summarizes, on an adjusted pro forma basis as of June 30, 2020, the total number of common shares owned by existing shareholders and to be owned by the new investors in this offering, the total consideration paid, and the average price per share paid by our existing shareholders and to be paid by the new investors in this offering, calculated before deducting of estimated discounts and commissions and offering expenses:

We do not anticipate declaring or paying any cash dividends to holders of our common shares in the foreseeable future. We currently intend to retain future earnings, if any, to finance the expansion of our business. Our future dividend policy is within the discretion of our board of directors and will depend upon then-existing conditions, including our results of operations and financial condition, capital requirements, business prospects, statutory and contractual restrictions on our ability to pay dividends, including restrictions contained in our debt agreements, and other factors our board of directors may deem relevant.

Although we are incorporated in Bermuda, we are classified as a nonresident of Bermuda for exchange control purposes by the Bermuda Monetary Authority. Other than transferring Bermuda dollars out of Bermuda, there are no restrictions on our ability to transfer funds into or out of Bermuda to pay dividends to U.S. residents who are holders of our common shares or other non-resident holders of our common shares in currency other than Bermuda dollars.

The following table presents our selected historical financial data for the periods and as of the dates indicated. The selected historical financial data as of and for the years ended December 31, 2019 and 2018 was derived from the audited historical consolidated financial statements of Hygo Energy Transition Ltd., formerly known as Golar Power Limited, included elsewhere in this prospectus. The summary historical financial data as of June 30, 2020 and for the six months ended June 30, 2020 and 2019 was derived from the unaudited historical financial statements of Hygo Energy Transition Ltd., formerly known as Golar Power Limited, included elsewhere in this prospectus and which, in the opinion of management, contain all normal recurring adjustments necessary for a fair statement of the results for the unaudited interim periods and have been prepared on the same basis as the associated audited consolidated financial statements.

You should read the information set forth below together with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and related notes included elsewhere in this prospectus. We expect our historical results of operations and cash flows, including our audited consolidated financial statements, to differ materially from our future operations and cash flows as our business and projects mature. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Our Historical and Anticipated Future Operating Results Will Differ Materially” for further information. Accordingly, our historical financial results are not necessarily indicative of results to be expected for any future periods.

You should read “Risk Factors” and “Forward-Looking Statements” elsewhere in this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

The following information should be read in conjunction with the audited consolidated financial statements and accompanying notes included elsewhere in this prospectus, as well as the information presented under “Selected Historical Financial Data.” The consolidated financial statements for Hygo Energy Transition Ltd., formerly known as Golar Power Limited, have been prepared in accordance with U.S. GAAP. This information is intended to provide investors with an understanding of our past performance and our current financial condition and is not necessarily indicative of our future performance. Please refer to “—Our Historical and Anticipated Future Operating Results Will Differ Materially” for further discussion.

We provide integrated downstream LNG solutions to underserved markets by delivering low cost, environmentally sound energy alternatives to consumers around the world. Our business includes (i) our network of existing and development stage marine LNG import terminals, (ii) our ownership of interests in existing and development stage large-scale power plants backed by high quality offtakers, and (iii) the downstream distribution of LNG from our terminals via marine and onshore logistics to major demand centers in Brazil. In addition, we have historically derived the majority of our revenues from our LNG carriers, which we expect to convert into FSRUs to service our terminals. We believe our model of “hub and spoke” LNG infrastructure, anchored by our terminals in Brazil, is a model that is highly replicable to create a global platform. Accordingly, we are also pursuing multiple gas-to-power and distribution opportunities elsewhere around the world, including Latin America, Southeast Asia, the Indian Subcontinent, West Africa and Europe. We seek to unlock underserved markets by introducing LNG and natural gas as cheaper, cleaner and transformative alternatives to traditional fossil fuels, as well as an attractive, reliable complement to growing renewable energy sources.

We operate our business in the following four reportable segments:

We expect the historical results of operations and cash flows, discussed below, including our audited consolidated financial statements, to differ materially from our future operations and cash flows as our business and projects mature. In the paragraphs that follow, we discuss the primary ways in which we expect those results to differ.

Our historical operating revenues and expenses have primarily consisted of time charter revenues and vessel expenses resulting from the operation of our vessels in the spot/short-term charter market. In addition, prior to March 2020, all of our projects were in various stages of development with none having yet commenced commercial

operation or revenue generation. As a result, for periods prior to March 2020, our investments in affiliates and joint ventures, such as CELSEPAR, CELBA and CEBARRA, as reported in our consolidated financial statements consist primarily of pre-operating expenses and associated losses. Our results of operations for the six months ended June 30, 2020 include initial revenues from our FSRU offshore Sergipe, Brazil, which commenced operations in March 2020.

Going forward, we anticipate that our results will include increasing revenues resulting from the long-term charter of our vessels in support of our terminals and our downstream distribution business. Results from our FSRU and terminal operations will be reported in our FSRUs and Terminals reportable segment. While we intend to continue to deploy any of our LNG carriers not otherwise in the process of conversion or committed to one of our projects in the spot/short-term charter market, we expect any such revenue and expense resulting from such deployment to comprise an increasingly smaller portion of our overall results. Results associated with the charter of our LNG carriers will be reported in our LNG Carriers reportable segment.

In addition to revenues and expenses associated with our FSRU and wholly owned terminal operations, we also expect to benefit from our ownership interests in the Sergipe Power Plant, the Barcarena Power Plant and other similar future projects. These results will be reflected in our Power reportable segment. The Sergipe Power Plant commenced commercial operations in March 2020. Pursuant to the PPAs in place, CELSE receives (i) fixed revenue for the power plant’s availability, regardless of energy dispatch and (ii) variable revenue based on the amount of energy generated, due when there is energy dispatch. In addition, revenue may be generated as a result of additional sales of LNG and natural gas to various end-users pursuant to offtake agreements with the excess capacity of the Sergipe Terminal. Accordingly, in the second half of 2020, we expect to receive earnings from our indirect investment in CELSE as a result of the revenue and expenses resulting from its commercial operations. We expect that the Barcarena Terminal and our other projects currently in various stages of evaluation, development and construction will generate similar types of revenues and expenses upon commencement of commercial operations.

In addition to the increasing contribution of our FSRU charters and equity investments, our downstream distribution operations, including our strategic partnership with BR Distribuidora, is in the early stages of development but we expect it to have a material impact on our results of operations in future periods. These results will be reflected in our Downstream Distribution reportable segment. Our Downstream Distribution reportable segment will also include results from our gas marketing and trading activities.

Upon completion of this offering, we expect to incur direct, incremental general and administrative expenses as a result of being a publicly traded company, including costs associated with the employment of additional personnel, compliance under the Exchange Act, annual reports to common shareholders, registrar and transfer agent fees, national stock exchange fees, the costs associated with the initial implementation of our Sarbanes-Oxley Section 404 internal controls and testing, audit fees, incremental director and officer liability insurance costs and director and officer compensation. These direct, incremental general and administrative expenses are not included in our historical results of operations.

In addition, in connection with the vesting of the MIS as discussed elsewhere in this prospectus, and following the completion of the offering, we will recognize an one time share based compensation expense of $98.7 million with a credit in equal amount to additional paid-in capital reflecting the capital contribution from Stonepeak. Once each Allocation (as defined herein) vests and becomes payable upon the closing of this offering, no future awards will be granted nor will any additional amounts become payable under the MIS following the closing of this offering except that the MIS will remain in place until each Allocation that was outstanding prior to the closing of this offering is settled, at which point the MIS would be deemed terminated. The balance sheet adjustment is reflected in the pro forma information included in the financial statements found elsewhere in this prospectus. Both the share based compensation expense and the corresponding credit will be reflected in our financial statements for the period that includes the completion of this offering. Please see “Management—Compensation—Compensation of Management” for additional information regarding the MIS arrangement.

The COVID-19 pandemic has spread quickly across the globe, and countries have mobilized to implement containment mechanisms and minimize impacts to their populations and economies. In an effort to contain

COVID-19 or slow its spread, governments around the world have enacted various measures, including orders to close all businesses not deemed “essential,” isolate residents to their places of residence, and practice social distancing. While these restrictions have eased in some regions and countries, they remain in place in others and may be adopted in additional regions or countries. These restrictions and the global health crisis have negatively impacted business activity across the globe, including in Brazil. We have observed declining demand and lower prices for natural gas and LNG as Brazilian and global economic activity have decreased. Brazil’s economic outlook has been particularly impacted by COVID-19 and its related effects, including reduced activity with key trading partners, lower commodity prices, a contraction in domestic activity and higher unemployment rates.

Due to concerns over health and safety, we have asked the majority of our non-essential workforce to work remotely until further notice. In addition, at our headquarters in London, we have put in place certain safety restrictions, such as limitations on the use of public transportation. As of July 31, 2020, working remotely has not significantly impacted our ability to maintain operations, including use of financial reporting systems, nor has it significantly impacted our internal control environment. We have not incurred, and in the future do not expect to incur, significant expenses related to business continuity as employees work from home.

Operations have not been disrupted at our Sergipe Terminal. We have continued to perform under our contracts, offtakers have continued to meet their payment obligations and liquidity has not been impacted due to the ongoing effects of COVID-19. We have, however, deferred certain capital expenditures and expect to see related delays in associated revenues from our downstream distribution business where we have experienced delays in the execution of contracts with potential offtakers. However, because of the contracted nature of our LNG terminals, we have not experienced, and do not expect to experience, material effects to that portion of our business. In addition, uncertain market conditions and changes in commodity prices may impact the cost benefits of LNG as compared to HFO, which may impact the ability of existing non-gas plants to switch to natural gas or the efficacy of doing so.

With respect to our projects under development, there is an increased risk that FID of our Barcarena and Santa Catarina terminals may be delayed due to severe restrictions on travel within Brazil and a country-wide delay on power auctions in Brazil due to lower than average demand for power in the region. Such travel restrictions have also prevented personnel from traveling between states, which has impacted the timing of inspections and permitting. In addition, the planned power auction related to the potential Santa Catarina Power Plant has been further postponed due to COVID-19.

Although we do not currently expect that COVID-19 will have a material long-term impact on our operating results, financial condition or our supply chain, we cannot predict whether or when economic activities will return to normalized levels.

We will continue to actively monitor the situation and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, partners, suppliers, and stakeholders, or as required by federal, state, or local authorities. It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our customers, employees, and prospects, or on our financial results. See “Risk Factors—Risks Related to Our Business—The scale and scope of the recent COVID-19 outbreak, the resulting pandemic, and the impact on the financial markets is unknown and could adversely affect our business, financial condition and results of operation at least for the near term.”

We will be affected by Brazilian macroeconomic conditions, including, among others, GDP growth, inflation and interest rates that affect the demand for LNG and natural gas and electricity in Brazil. The general performance of the Brazilian economy can adversely affect our financial condition and results of operations, as well as the overall demand for LNG and natural gas and electricity. In addition, the rate of adoption of LNG and natural gas as alternatives to traditional fossil fuels in Brazil will also significantly impact our future results of operations.

A substantial amount of our, including our joint ventures’, transactions, assets and liabilities are denominated in currencies other than U.S. dollars, such as Brazilian reais in respect of our subsidiaries and investments, which receive income and pay expenses in Brazilian reais. The fluctuation of the value of foreign currencies against other currencies, primarily the U.S. dollar, could adversely affect our, including our joint ventures’, financial condition and results of operations.

We operate in a capital intensive industry and finance, and expect to continue to finance, a portion of our projects with borrowings from debt transactions and leasing arrangements with financial institutions. A significant portion of our long-term debt and capital lease obligations is, and will continue to be, subject to adverse movements in interest rates. Any such adverse changes in interest rates could increase our financing costs and have a material adverse effect on our results of operations and financial condition.

Our business is based on the price of natural gas and LNG. Natural gas and LNG prices have at various times been, and may become, volatile due to a number of factors beyond our control. Decreases in the prices at which we are able to sell LNG and natural gas, or increases in the prices we have to pay to purchase natural gas or LNG, could materially and adversely affect demand from our customers and/or our margins.

Historically our operating revenues have primarily consisted of time charter revenues resulting from the operation of our vessels through the Cool Pool in the spot/short-term charter market, which was recorded in our LNG Carriers segment. We recognize revenues from such time charters over the term of the charter as the applicable vessel operates under the charter. We do not recognize revenue during days when the vessel is off-hire, unless the charter agreement makes a specific exception.

Revenues and expenses under the Cool Pool arrangement have historically been accounted for in accordance with the guidance for collaborative arrangements when two (or more) parties are active participants in the activity and exposed to significant risk and rewards dependent on the commercial success of the activity. On July 8, 2019, following the withdrawal of GasLog Ltd.’s vessels, we ceased applying the collaborative accounting guidance to the Cool Pool. This had no impact on how we account for revenues and expenses that were attributable to our own vessels, however, net revenue and expenses relating to the other pool participants is now presented on a net basis within “Voyage, charter-hire and commission expenses.”

We anticipate that time charter revenue will comprise a decreasing portion of our total revenue in the future as revenue from other sources, including FSRU charters and power, industrial and other downstream sales of LNG, increase and our existing LNG carriers are converted into FSRUs.

Vessel Expenses. Vessel operating expenses include direct vessel operating costs associated with operating a vessel, such as crew wages, which are the most significant component, vessel supplies, routine repairs, maintenance, lubricating oils, insurance and management fees for the provision of commercial and technical management services.

Voyage, Charter-Hire and Commission Expenses. Voyage, charter-hire and commission expenses, which are primarily fuel costs but which also include other costs such as port charges, are paid by our customers under our time charters. However, we may incur voyage related expenses during off-hire periods when positioning or repositioning vessels before or after the period of a time charter or before or after drydocking, which expenses will be payable by us. We also incur some voyage expenses, principally fuel costs, when our vessels are in periods of commercial waiting time. Following the withdrawal of GasLog Ltd.’s vessels from the Cool Pool, we account for voyage expenses under “Voyage, charter-hire and commission expenses.”

Depreciation and Amortization. Depreciation and amortization expense, or the periodic cost charged to our income for the reduction in usefulness and long-term value of our assets, including our vessels and facilities, is impacted by the number of vessels we own or operate under long-term capital leases as well as the capital invested in our other assets over time. For our vessels, we depreciate their cost less their estimated residual value, and amortize the amount of our capital lease assets over their estimated economic useful lives, on a straight-line basis. We amortize our deferred drydocking costs over five years based on each vessel’s next anticipated drydocking.

Administrative Expenses. Administrative expenses are composed of general overhead, including personnel costs and fees incurred pursuant to the management services agreement with Golar Management, legal and professional fees, property costs, business development project costs and other general administration expenses.

Interest Expense and Interest Income. Interest expense depends on our and our consolidated lessor variable interest entities’ (“VIEs”) overall level of borrowings, including costs associated with such borrowings. By virtue of the sale and leaseback transactions we have entered into with lessor VIEs, where we are deemed to be the primary beneficiary, we are required to consolidate these VIEs into our results. As of June 30, 2020, our VIEs include the Golar Penguin, the Golar Nanook and the Golar Celsius which have been financed through sale and leaseback transactions. Accordingly, although consolidated into our results, we have no control over the funding arrangements negotiated by these lessor VIE entities, including the interest rates to be applied. For additional detail refer to “—Non-Controlling Interests” below. During construction of an asset under development, interest expenses incurred are capitalized in the cost of the asset or vessel. In addition this treatment applies to certain of our equity method investments, meeting specific criterion, during the period prior to commencement of their planned principal operations.

Interest income will in part depend on prevailing interest rates and the level of our cash deposits and restricted cash deposits. On March 31, 2020, following commencement of operations at the Sergipe Power Plant, the Sergipe FSRU Charter commenced. All charter-hire revenue from the Sergipe FSRU Charter will be recognized as interest income.

Our assets include equity interests in non-consolidated affiliates, including CELSEPAR, CELBA, CEBARRA and São Marcos. The results of operations of these entities will be reflected in our Power reportable segment. Generally we have between 20% and 50% of the voting rights in these entities or may otherwise have significant influence, but over which we do not exercise primary control, or have the primary power to control the financial and operational policies. Investments in these entities are accounted for by the equity method of accounting. This also extends to entities in which we hold a majority ownership interest but do not control due to the participating rights of non-controlling interests. Under this method, we record an investment in the common stock (or “in-substance common stock”) of an affiliate at cost and adjust the carrying amount for our share of the earnings or losses of the affiliate subsequent to the date of the investment and report the recognized earnings or losses in income. Dividends received from an affiliate in connection with our ownership interest reduce the carrying amount of our investment. When our share of losses in an affiliate equals or exceeds our interest, we do not recognize further losses, unless we have incurred obligations or made payments on behalf of the affiliate. We recognize gains and losses in earnings for the issuance of shares by our affiliates, provided that the issuance of such shares qualifies as a sale of such shares.

We have the following investments as of June 30, 2020 that are recorded using the equity method of accounting:

For additional information about expected revenue generated by these non-consolidated affiliates, please read “—Our Historic and Anticipated Future Operating Results Will Differ Materially” and for a description of their assets and operations, please read “Business—Our Current and Anticipated LNG-to-Power Infrastructure Network,” “Business—Sergipe” with respect to CELSEPAR and “Business—Barcarena” with respect to CELBA.

Non-controlling interests comprises equity interests in our VIEs. We were party to sale and leaseback arrangements for three vessels with these lessor VIEs during the six months ended June 30, 2020. While we do not hold any equity investments in these lessor VIEs, we are the primary beneficiary and accordingly, we are required to consolidate these VIEs into our consolidated financial results. Thus, the equity attributable to these financial institutions is included in our non-controlling interest. For additional details, see note 8 “Variable Interest Entities” to our unaudited consolidated financial statements included herein.