Colombia Full Start-up Next Month, says Hoegh

Norway-based shipowner Hoegh LNG has updated investors about its floating LNG import projects in 3Q results November 17.

The Colombia floating storage and regasification unit (FSRU) entered its commissioning phase when Höegh Grace, previously on a short-term charter to Trafigura as an LNG carrier,  berthed in Cartagena November 1 and later received its first cargo.

The FSRU ship, now on long charter to local firm SPEC, has regas capacity of 500mn ft³/d (3.75mn mt/yr) which can cover around 40% of Colombia’s gas demand, helping the country meet rising demand for electricity and guaranteeing security of supply during droughts when there is scarce hydropower. Commercial operation of the FSRU is scheduled to begin early December 2016, the company added.

In Chile, the company expects to have financing in place by mid-2017 for the Penco LNG FSRU project, fully permitted in 3Q 2016, for which a ship is now being built by Hyundai (HHI) in South Korea.

Target of 12 FSRUs by 2019

“The level of business development activity is currently high," said Hoegh LNG about overall demand for new ship-based import projects: "Several new FSRU projects have been proposed lately, most with a start-up date in 2017 and 2018.” It said it is currently in the final round of evaluating bids received from shipyards for its next FSRU newbuilding series, adding that its ambition is to have 12 FSRUs in operation and under construction by 2019. Today it has five FSRUs deployed in Colombia, Egypt, Lithuania, Indonesia and China – plus a sixth FSRU working as an LNG carrier.

Independence at Klaipeda, Lithuania was the first FSRU to be deployed in Europe in 2014 (Photo credit: Hoegh LNG) 

Around 100mn mt/yr entering market by 2020

“Around 100mn mt/yr of additional LNG liquefaction capacity will enter the market between 2017 and 2020. The LNG market should therefore continue to see ample additional supplies…. Coupled with the expectations for continued low LNG prices, this will support continued growth in the FSRU segment. The LNG carrier spot and short-term market remains weak but with some signs of improvement, albeit, from a very low base,” its statement says.

Earnings of $26.5mn and net profits of $3.3mn in 3Q were in line with 2Q 2016, with the latter up on $2.5mn profits in 3Q 2015.

Mark Smedley