Höegh LNG Targets Four Long-Term FSRU Projects

As the FSRU market is improving, Norway-based company Höegh LNG said it is in the final selection round for four different long-term FSRU projects.

As explained, the group is currently involved in the final bid rounds or has achieved exclusivity in four FSRU tender processes. Furthermore, it is involved in several additional selection processes at various stages of development.

The company is particularly focused on China where additional regasification capacity is required in order to meet increasing demand for natural gas.

“Additional FSRU opportunities arise on a frequent basis, particularly in Asia, where China in a period of 12 months has emerged the world’s second largest LNG importer and a high potential market for FSRUs. With our proven operational platform that now includes the highly complementary small-scale LNG offering represented by our shareholding in Avenir LNG, Höegh LNG remains in a strong competitive position for the most attractive FSRU contracts in the market,” Sveinung J.S. Støhle, President and CEO of Höegh LNG, commented.

Höegh LNG’s main commercial objective is to have all its FSRUs placed on long-term FSRU contracts. That includes FSRUs #9 and #10, which are still under construction.

What is more, the company intends to take “an opportunistic approach” to opportunities arising from the LNGC market. This could include medium-term LNGC time charters, and/or combinations of short-to-medium term LNGC time charters with forward-start FSRU contracts to produce structures transferable by Höegh LNG Partners, pending terms and conditions of such interim LNGC employment, according to the company.

Höegh LNG closed the third quarter of 2018 with a net income of USD 6 million, down from USD 7.8 million in the previous quarter.

The company reported a total income of USD 82.3 million for the third quarter of 2018, compared with USD 75.8 million in the second quarter of the year. The increase is mainly a result of higher revenues generated by Höegh Giant and Höegh Esperanza, as well as USD 2.1 million in revenue recognition of insurance proceeds and other reimbursement.

The combination of higher revenues and lower voyage expenses resulted in EBITDA of USD 47.9 million for the period, compared with USD 40.3 million for the previous quarter.

During the third quarter, Höegh LNG received commitment letters for the financing of its two FSRUs under construction making the newbuilding program fully financed.

“We are pleased to deliver Höegh LNG’s best underlying quarterly results on record, with EBITDA up 19% compared to Q2, reflecting continued operational excellence and a full quarter of income from Höegh Esperanza under its contract with CNOOC in China. Our financial position is solid, and with debt commitments received for the financing of our two newbuildings, as well as for our first refinancing completed well ahead of maturity, we are fully financed across the fleet at attractive terms,” Støhle said.