Indonesia’s PGN, Hoegh LNG settle Lampung FSRU dispute

Norwegian FSRU player Hoegh LNG has resolved a dispute with Indonesian state-owned gas firm PT Perusahaan Gas Negara (PGN), a unit of Pertamina, over issues related to the Lampung FSRU charter.

“With reference to the previously disclosed disputes and pending arbitrations with the charterer of PGN FSRU Lampung, Hoegh LNG is pleased to announce that the parties have entered into an amicable settlement,” Hoegh LNG said on Tuesday.

Höegh LNG said that the two firms have agreed to “finally and irrevocably settle all of the disputes, claims, and counterclaims between the parties that gave rise to the said arbitration proceedings and agreed to terminate the arbitrations with immediate effect.”

According to the FSRU player, the charter contract for PGN FSRU Lampung “remains in full force and effect and each party will cover its own costs in relation to the terminated arbitrations.”

Back in July 2021, Hoegh LNG Partners, now part of Hoegh LNG, 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.”

After that, Hoegh LNG Partners filed a countersuit against PGN.

The 2014-built 170,132-cbm FSRU serves a 20-year charter deal with PGN LNG, a unit of PGN, off the southeast coast of Sumatra in Indonesia.

Moreover, the underutilized 2.7 mtpa facility completed in November last year its 52nd ship-to-ship operation since it started operations in 2014.

Connected to a tower yoke mooring system, the unit delivers gas via a 21 km long offshore pipeline.

The regasified LNG from the FSRU-based facility goes for power generation and industrial users in West Java.

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