New York-listed Hoegh LNG Partners said it has filed a countersuit against Indonesian state-owned gas firm PT Perusahaan Gas Negara (PGN), a unit of Pertamina, over issues related to the Lampung FSRU charter.
The vessel serves a 20-year charter deal with PGN LNG, a unit of PGN, off the southeast coast of Sumatra in Indonesia. Parent Hoegh LNG manages the FSRU while its MLP Hoegh LNG Partners owns it.
To remind, Hoegh LNG Partners said in July it had received a letter where PGN said it would start arbitration to “declare the charter null and void, and/or to terminate the charter, and/or seek damages.”
Hoegh LNG Partners did not provide the exact details saying only the charterer “raised certain issues in relation to the operations of the vessel.”
In an update, the shipping firm said in its quarterly results report on Thursday that PGN served a notice of arbitration to its unit PT Hoegh LNG Lampung on August 2 to declare the charter null and void.
“PT Hoegh LNG Lampung (PT HLNG) has served a reply refuting the claims as baseless and without legal merit and has also served a counterclaim against the charterer for multiple breaches of the lease and maintenance agreement for the PGN FSRU Lampung (LOM),” the firm said.
“PT HLNG will take all necessary steps and will vigorously defend against the charterer’s claims in the legal process. Notwithstanding the notice of arbitration, both parties are continuing to perform their respective obligations under the LOM,” Hoegh LNG Partners said.
Hoegh LNG Partners has not completed the ongoing refinancing of the PGN FSRU Lampung credit facility. The finacing had been scheduled to close by the end of the second quarter.
This is due to the “failure by the charterer of the PGN FSRU Lampung to consent to and countersign certain customary documents related to the new credit facility,” Hoegh LNG Partners said.
These circumstances have left the partnership exposed to having to arrange alternative refinancing, or rearrange the existing refinancing, in the short term in advance of the commercial tranche of the Lampung facility’s maturity on September 29, it said.
“The partnership has asked the existing lenders to approve a six-month extension to the maturity date to allow for more time to complete a refinancing and has commenced discussions with existing lenders and certain other potential lenders about this,” the firm said.
“There is room for a commercial arrangement”
The company’s CEO Sveinung Stohle, who is also the chief of parent Hoegh LNG, told analysts during the earnings call on Thursday the legal process had just started and he could not provide any information on the timing of potential resolution.
He said Hoegh LNG Partners expects the firm would find a resolution to this dispute. “And that of course, is our base case,” Stohle said.
“We think that the issues that have been raised are without merit, and we think that there is room for a commercial arrangement,” Stohle said.