Norway: Hoegh and PGN Sign Heads of Agreement for Medan FSRU Project

Hoegh and PGN Sign Heads of Agreement for Medan FSRU Project

Höegh LNG Holdings Ltd has entered into binding Heads of Agreement (“HoA”) with Perusahaan Gas Negara​ (“PGN”) for the provision of a Floating Storage and Regasification Unit (FSRU) offshore Belawan, near the city of Medan, in North Sumatra, Indonesia. The HoA is based on the use of Höegh LNG’s first FSRU newbuilding due for delivery at the end of 2013 and under construction at Hyundai Heavy Industries in Korea.

The 170,000 cbm LNG FSRUs, measures 294 m in length and 46 m in width, can store 70,000 tons of chilled natural gas.

The HoA is further based on a 20 year charter party agreement, which is the first agreement of this length in the FSRU market. The charter party and associated project agreements are under completion by the parties. The FSRU for the Medan project will be financed on a project basis and Höegh LNG has appointed Standard Chartered Bank and Bank of Tokyo-Mitsubishi as financial advisors for the project financing.

President and Chief Executive Officer, Sveinung Støhle, explains: “We are satisfied to have reached this important milestone in our negotiations with Perusahaan Gas Negara for a long-term contract for our first FSRU newbuilding. This confirms our strategy to focus on floating regasification terminals and underpins the competitive position of our newbuilding program at Hyundai Heavy Industries.”

LNG FSRUs receive liquefied natural gas from offloading LNG carriers. The installed regasification system provides gas send-out through flexible risers and pipelines to shore. Typically, LNG FSRUs are converted from other ships. LNG FSRUs take a year less and cost half as much as an onshore LNG terminal to complete.

[mappress]

Shipbuilding Tribune Staff, December 8, 2011; Image: hoeghlng