Hoegh LNG: commissioning of Brazilian FSRU completed

Commissioning of the FSRU Hoegh Giant which serves Cosan’s LNG import terminal in Brazil’s port of Santos has been completed, according to Norwegian FSRU player Hoegh LNG.

Hoegh LNG said in the company’s first quarter report on Thursday that its 170,000-cbm FSRU Hoegh Giant has arrived in Santos, Brazil in late February and has started its commissioning for FSRU operation.

“Hoegh Giant completed its FSRU commissioning in Santos in late April,” it said.

The firm did not provide further information.

Hoegh LNG said in its 2023 results report in February that it expects to start commissioning in Santos towards the end of the first quarter.

Back in December 2021, Hoegh concluded the 10-year FSRU charter with Terminal de Regaseificacao de GNL de Sao Paulo (TRSP), a unit of Cosan’s Compass Gas & Energia, to serve the latter’s project in the port of Santos with a regasification capacity of 14 million cbm/day.

The firm said in August last year that the FSRU had started its long-term FSRU contract with TSRP/Compass in Brazil from beginning of the third quarter last year.

Cosan’s unit previously expected to start operations by the end of 2023.

FSRU fleet booked

Hoegh LNG’s fleet comprises ten FSRUs and three LNG carriers.

The entire fleet is operating under long-term contracts, except the LNG carrier Hoegh Gandria which is currently employed on a five-month LNG carrier charter ending in August 2024.

The average remaining contract length per vessel was 7.5 years at the end of March 2024, according to Hoegh LNG.

Moreover, Hoegh LNG said its Hoegh Galleon has completed drydocking and its fifth anniversary class renewal in April 2024 and is now repositioning to Egypt to start the interim FSRU deployment for EGAS.

The firm recently confirmed it has signed a deal with Australian Industrial Energy (AIE) and Egypt’s EGAS to deploy the 2019-built FSRU Hoegh Galleon to Egypt.

The FSRU with a regas capacity of 384 mmscf/d will be located in Ain Sokhna, Egypt for a “likely period of 19-20 months”.

After that, the 170,000-cbm FSRU is expected to be deployed to AIE’s LNG terminal currently under construction at Port Kembla, in New South Wales, Hoegh LNG said.

Demand for FSRUs “strong”

Hoegh LNG noted its business development activities “remain high” with a balanced spread of activities between regions.

There is a “strong focus” on developing the Zeeland Energy terminal in Vlissingen, Netherlands with the company’s project partner VTTI, it said.

Hoegh LNG said it expects the demand for FSRUs to “remain strong”.

“While Hoegh LNG has secured long-term contracts for its entire fleet of FSRUs, the business development team is in active dialogue with several potential new projects looking for FSRU capacity,” it said.

On March 31, 2024, the global fleet of FSRUs counted 47 units, excluding four barges with limited storage and/or sendout capacity.

Following the recent surge in demand for FSRUs, only one existing unit remains available for prompt delivery in the market, Hoegh LNG said.

There are two FSRU newbuilds on order, of which one is available with expected delivery in 2026, it said.

Results

Hoegh LNG reported a total income of $128.6 million and an Ebitda of $79 million in the first quarter.

This marks a slight increase from the preceding quarter’s total income and Ebitda of $125.7
million and $78.1 million, respectively.

Also, Hoegh LNG attributed the marginal rise in Ebitda to variation in administrative expenses and Opex.

In the first quarter of 2024, the group’s profit after tax was $19.7 million, reflecting a $3.9 million increase from the preceding quarter’s $15.8 million.

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