Hoegh LNG still looking to secure contract for its 7th FSRU

Oslo-Based Höegh LNG said it is still working to secure a long-term contract for its only uncommitted FSRU, currently under construction at South Korea’s Hyundai Heavy Industries. The company’s seventh FSRU is due to be delivered in the first quarter of 2017.

The FSRU is currently offered to “three projects that have a start-up that matches the delivery from yard relatively well,” Höegh LNG said in its annual report posted on Thursday.

“When long-term employment is secured, Höegh LNG intends to, in line with its business model, order an additional FSRU,” the company said.

Höegh LNG has a fleet of eight FSRUs and three LNG carriers, of which three FSRUs are under construction. The company also operates one LNGC.

According to Höegh LNG, the current LNG market outlook, with ample LNG supply available at low prices, creates a “strong foundation for continued growth and high returns within the FSRU segment.”

However, the same market conditions make investment decisions for new LNG liquefaction facilities “unlikely for the foreseeable future,” Höegh LNG said, adding that as a consequence, the company announced in February its decision to put its FLNG activities on hold and allocate its resources to the FSRU segment.

“Höegh LNG sees a continued strong strategic rationale for the FSRU projects that the Group is targeting, driven by power demand and potential cost savings by replacing expensive liquid fuels with natural gas.”

Further, the low LNG prices in USD, which is a result of the low oil price in USD and the long LNG market, make LNG affordable to price sensitive markets, the company said.

“Both Egypt and Pakistan are examples of how the increased availability of LNG and the low LNG prices in USD attract new LNG importers that successfully buy all the LNG they need in the spot/short term market at affordable prices,” it added.

LNG World News Staff