Hoegh LNG said it has terminated a charter deal for the 170,000-cbm FSRU Hoegh Giant with India’s H-Energy, the owner of the delayed import facility in Jaigarh.
The FSRU player said in its first-quarter report that the charter was terminated in April following “the charterer’s default of the contractual terms.”
Hoegh LNG did not provide additional information regarding the breach of contract.
H-Energy is disputing Hoegh LNG’s entitlement to terminate but it “accepts that the FSRU contract is at an end”, according to Hoegh LNG.
“Hoegh LNG is confident of its contractual right to terminate and it has commenced arbitration proceedings against the charterer to confirm the legitimacy of its actions and seek damages,” it said.
Following delays, Hoegh Giant docked again in March at the H-Energy’s Jaigarh facility to serve its terminal for a period of 10 years with annual termination options after year five.
The Darshan Hiranandani-led company said at the time it was “gearing up towards commissioning it in the coming weeks”.
Its AIS data shows that the FSRU was on Thursday still located at the Jaigarh facility.
Hoegh LNG and H-Energy signed the long-term charter deal for the 2017-built FSRU in December 2020.
The FSRU has a regasification capacity of 750 million cubic feet per day or about 6 million tons per year.
H-Energy previously said the Jaigarh facility would become India’s seventh facility and the first FSRU-based terminal in the country.
Hoegh LNG eyes FSRU fleet expansion
Hoegh LNG also said in the quarterly report that the firm is looking to expand its fleet of FSRUs.
The company’s fleet consists of ten FSRUs and two LNG carriers, including five FSRUs owned by Hoegh LNG Partners.
Hoegh LNG said it would start “considering potential growth opportunities including expansions of its FSRU fleet with newbuilds or conversion of LNG carriers to FSRUs, maintaining its position as the leading FSRU provider.”
European countries are on the hunt to secure FSRUs as they look to reduce reliance on Russian gas.
Hoegh LNG has already signed a deal with Germany’s RWE on behalf of the German Federal Ministry for Economic Affairs and Climate Action to charter two FSRUs for a period of 10 years.
The firm said that the detailed FSRU contracts would be completed by September/October, and expects FSRU operations to start by the end this year.
Hoegh LNG added that it would announce the names of the FSRUs at a “later point in time”.
Sources previously told LNG Prime that Hoegh’s uncommitted 170,000-cbm FSRU Esperanza would probably serve one of the planned terminals in Germany.
Besides Esperanza, the second vessel could be the 170,000-cbm Hoegh Galleon. The firm signed a deal with Australian Industrial Energy (AIE) for this unit last year but the deal is conditional as AIE still needs to take a final investment decision on the Port Kembla project.
In addition, Hoegh Giant could also now be a candidate to work in Germany following the termination of the charter.
(Article updated to include fleet expansion plans.)