Golar LNG
Incorporated in Bermuda
January 18, 2007
VIA EDGAR
Cecilia D. Blye, Esq.
Chief, Office of Global Security Risk
United States Securities and Exchange Commission
100 F Street N.E.
Washington, DC 20549
Re: Golar LNG Limited
Form 20-F for the Fiscal Year Ended December 31, 2005
File No. 0-50113
Dear Ms. Blye:
I am writing on behalf of Golar LNG Limited (the "Company"), in response to
your letter dated December 4, 2006, in which the Staff of the Securities and
Exchange Commission (the "Staff") requested supplemental information relating to
the Company's Annual Report on Form 20-F for the Fiscal Year ended December 31,
2005 (the "Annual Report"). The Company's responses, together with the Staff's
comments, are set forth below.
1. We note that your 20-F states that in 2006 you acquired 19.83% interest in
Liquefied Natural Gas Limited, making you the largest shareholder. LNGL
states in its Annual Report for the Year ended June 30, 2006, that it is
continuing to progress towards the development of an onshore LNG plant on
Qeshm Island, Iran. LNGL stated in a July 31, 2006, news release that the
Civil Pension Fund Investment Company of Iran has signed an agreement to
acquire a 35% share in a wholly-owned LNGL subsidiary. We also note an
April 2006 news report that you will jointly pursue opportunities in Iran
with LNGL.
In light of the fact that Iran has been identified by the U.S. State
Department as a state sponsor of terrorism, and is subject to U.S. economic
sanctions and export controls, please describe for us the extent and nature
of your past, current, and anticipated contacts with Iran, whether through
direct or indirect arrangements.
As the Annual Report sets forth, the Company is a liquefied natural gas
("LNG") Company which owns and operates a fleet of twelve LNG carriers (or
vessels) and which is engaged in the acquisition, ownership, operation and
chartering of LNG carriers through its subsidiaries. Six of the Company's
LNG carriers are currently employed under long-term charter contracts,
three LNG carriers are currently employed on short charters and three
vessels are employed on medium term five-year market related charters with
Shell. The Company is incorporated under the laws of the Islands of Bermuda
and it maintains its principal executive headquarters in Hamilton, Bermuda.
The Company's principal administrative offices are located in London,
United Kingdom. All of the Company's subsidiaries are non-United States
companies and all of its vessels are registered in non-United States
jurisdictions. In addition, no United States persons are involved in the
chartering of the Company's vessels. Accordingly, the Company is not
covered by the regulations of the Office of Foreign Asset Control ("OFAC")
relating to any dealings with Iran.
Iran currently does not have LNG facilities, and neither the Company nor
any of its subsidiaries transport LNG to or from Iran. The Company does not
have any charters with Iranian companies and does not generate any revenues
from business with Iranian companies.
In April 2006 the Company invested $5.1 million to purchase 13.95 million
shares in Liquefied Natural Gas Limited ("LNGL") an Australian public
company listed on the Australian Securities Exchange ("ASX"). Furthermore,
in June 2006 the Company acquired another 9.05 million shares of LNGL for a
consideration of $2.5 million following approval by LNGL's shareholders.
After both purchases, the Company currently holds a 19.83% interest in
LNGL.
LNG International Qeshm Gas Ltd. ("LNGIQ"), a subsidiary of LNGL, was
formed to develop gasfields for gas supply to a proposed LNG plant in
Qeshm, Iran. LNGIQ was formed in February, 2006 and registered in Qeshm,
Iran. We understand that LNGIQ has signed a cooperation agreement with the
National Iranian Oil Company. However, they have not signed contracts for
the sale or purchase of gas and there remains a substantial question
whether the project will ever materialize or generate any revenues from
Iranian business.
Neither LNGL nor LNGIQ are subsidiaries of the Company. None of the
Company's executives are executives of either LNGL or LNGIQ. Furthermore,
only one out of seven directors of LNGL, Mr. Gary Smith who serves as the
Company's Chief Executive Officer, who is neither a U.S. citizen nor
resident, has affiliations with the Company. The Company accounts for LNGL
on an equity basis for accounting purposes.
2. Address the applicability of the Iran Sanctions Act of 1996 (formerly the
Iran and Libya Sanctions Act of 1996), as modified by the Iran Freedom
Support Act on September 30, 2006, to any contacts described in response to
the foregoing comment.
The Iran Sanctions Act of 1996 (formerly the Iran and Libya Sanctions Act
of 1996), as modified by the Iran Freedom Support Act on September 30, 2006
(the "Act") imposes sanctions on persons (defined as (a) "natural persons",
(b) "a corporation, business association, partnership, society, trust, any
other nongovernmental entity, organization, or group, and any governmental
entity operating as a business enterprise;" and (c) "any successor to any
entity of a corporation, business association, partnership, society, trust,
any other nongovernmental entity, organization, or group, and any
governmental entity operating as a business enterprise" who make certain
investments which directly or significantly contribute to the enhancement
of the ability of Iran (and formerly Libya) to develop its petroleum
resources. The Act requires the President to impose sanctions on persons
that make investments, with actual knowledge, in excess of $40,000,000 (or
a combination of investments in excess of $10,000,000 each, which in total
exceeds $40,000,000 in a 12-month period) that "directly and significantly
contributed to the enhancement of Iran's ability to develop petroleum
resources of Iran."
The Company advises the Staff that the Company does not invest or conduct
any business with the government of Iran or Iranian companies for the
development of petroleum resources. Further, as stated in its response to
Question 1 above, the Company does not derive any revenues from contacts
with Iran. As such, the Act does not apply to any of the Company's contacts
described in response to the foregoing comment.
3. Discuss the materiality to you of any contacts with Iran and advise us of
your view as to whether those contacts constitute a material investment
risk for your security holders. Address materiality in quantitative terms,
including the dollar amount of any associated revenues, assets or
liabilities. Please also address materiality in terms or qualitative
factors that a reasonable investor would deem important in making an
investment decision, including the potential impact of corporate activities
upon a company's reputation and share value.
We note, for example, that Arizona and Louisiana have adopted legislation
requiring their state retirement systems to prepare reports regarding state
pension fund assets invested in, and/or permitting divestment of state
pension fund assets from companies that do business with countries
identified as state sponsors of terrorism. The Pennsylvania legislature has
adopted a resolution directing its Legislative Budget and Finance Committee
to report annually to the General Assembly regarding state funds invested
in companies that have ties to terrorist-sponsoring countries. The Missouri
Investment Trust has established an equity fund for the investment of
certain state-held monies that screens out stocks of companies that do
business with U.S.-designated state sponsors of terrorism. Your materiality
analysis should address the potential impact of the investor sentiment
evidenced by such actions directed toward companies that have business with
Iran.
The Company is currently listed both on the Nasdaq National Market
("Nasdaq") and the Oslo Stock Exchange. The Company has been active in the
U.S. capital markets since December 2002 when it listed on the Nasdaq. The
Company believes that U.S. investors understand that OFAC regulations
permit many U.S. companies to do business with Iran through foreign
subsidiaries. The Company is not a U.S person that has established a
foreign subsidiary in order to facilitate business with Iran. The Company
is a completely foreign entity. As mentioned above, although the Company
does not have any direct business dealings with Iran, the Company owns a
19.83% stake in LNGL whose 100% wholly owned subsidiary, LNGIQ, is
developing natural gasfields in Qeshm, Iran. The Company believes that U.S.
investors would take into account the minority interest the Company holds
in LNGL in assessing the nature of the Company's involvement with Iran. The
Company also believes that an investment in a company such as LNGL which is
developing LNG around the world is complementary to the Company's main
business of operating LNG carriers. Further, LNGL is actively pursuing
gasfield development and liquefied natural gas sale opportunities
internationally, including in Tanzania, India, Australia and parts of
Southeast Asia, in addition to Iran. As such, the project that LNGL is
undertaking in Qeshm, Iran through its subsidiary, LNGIQ, would make up
only a minor part of LNGL's liquefied natural gas business activity.
As neither the Company nor any of its subsidiaries conduct any business
with Iran, there is no materiality in quantitative terms with regard to
revenues, assets or liabilities that the Company would have to report to
its security holders.
The Company notes the Staff's comments that a number of states have taken a
variety of positions with respect to investments in companies that do
business with countries identified as state sponsors of terrorism. The
Staff states that the Company's materiality analysis should address the
potential impact of investor sentiment evidenced by such actions concerning
companies with operations associated with Iran.
The Company does not believe that it should be characterized as doing
business with Iran. As set forth under the response to Comment 1, the
Company's vessels do not call in Iran. Its sole connection with Iran is its
minority interest in LNGL. As the Company is a foreign company and not a
U.S. person, does not have any U.S. subsidiaries and is not utilizing U.S.
equipment and services, OFAC regulations do not apply to it.
The Company monitors OFAC and international asset control regulations and
believes that it is in compliance with all such regulations.
Accordingly, the Company believes that qualitatively, the level of its
contacts with Iran poses no material risk to its investors.
* * * *
The Company understands that it is responsible for the adequacy and
accuracy of the disclosure in its filing; Staff comments or changes to
disclosure to Staff comments do not foreclose the Commission from taking
any action with respect to the filing; and the Company may not assert Staff
comments as a defense in any proceeding initiated by the Commission or any
person under the federal securities laws of the United States.
Please feel free to contact our US legal Counsel, Gary Wolfe, at (212)
574-1223 or the undersigned at +44 207 517 8600 with any questions or
comments.
Very truly yours,
Gary Smith
CEO Golar Management (UK) Ltd
For and on behalf of Golar LNG
Limited
cc: Max Webb, Esq.
Assistant Director
Division of Corporation Finance
Securities and Exchange Commission
Gary J. Wolfe, Esq.
Seward & Kissel LLP
SK 03849 0004 739783