Hoegh LNG puts focus on finding long-term FSRU contracts

Norwegian floating player Hoegh said it has made “good progress” on finding long-term work for its FSRUs currently trading as LNG carriers.

“In addition to securing the long-term contract for Hoegh Giant in India with a scheduled start-up in the coming weeks, Hoegh LNG is making good progress in completing additional long-term FSRU employment for its fleet,” Hoegh’s chief Sveinung Stohle, said after the firm announced its fourth-quarter report.

The CEO said the firm’s objective is to conclude firm long-term FSRU by the end of 2021 for the units currently on short-term contracts.

Höegh LNG recorded a net profit after tax of $0.8 million for the fourth quarter, up from a loss of $2.6 million in the preceding quarter. Ebitda of $55.2 million also increased in November-December from $53 million the firm logged in the preceding three months.

Four FSRUs serve as LNG carriers

The firm announced earlier this month short-term charter deals with Trafigura and Cheniere for Hoegh Gannet, Gallant, and Galleon.

It also sent Hoegh Giant FSRU to Singapore’s Keppel Shipyard for “minor” modifications ahead of its job for H-Energy’s import project in Jaigarh, India. Hoegh expects this vessel to
be off-hire for about 45 days in the first quarter of 2021 before the start-up in India at the
end of March 2021.

With these charters, Hoegh’s fleet secured full contract coverage for 2021, but with the exception of Hoegh Esperanza that currently operates as FSRU in Tianjin for CNOOC.

For this vessel, the firm is in discussions with the Chinese firm on an extension from the expiry of the existing contract in June 2021.

In addition, the company said it aims to secure an extension that potentially covers the period until Hoegh Esperanza should go on a long-term FSRU contract at AGL’s Crib Point project in Australia.

“The market for FSRUs remains highly competitive. Although Hoegh LNG secured a long-term FSRU contract with H-Energy in the fourth quarter, four FSRUs still remain on interim
LNGC contracts,” the firm said.

“Rate levels obtainable for FSRUs trading on interim LNGC term charters remained low following the decline experienced in the first half of 2020, although with an uptick towards the end of 2020 and into 2021,” it said.

Clean Energy area

“In line with its strong sustainability strategy, the company has established a Clean Energy business area focused on deveolping infrastructure solutions for the transportation, storage and distribution of green hydrogen and ammonia, as well as developing floating carbon capture and storage solutions,” Stohle said.

He added that this initiative would support Hoegh’s industrial platform and modern assets in “driving forward the energy transition well into the future.”

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