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    Hoegh To Convert 1st Ship to FSRU

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Summary

Rather than always having LNG import terminals built from new, Hoegh LNG is to convert an existing vessel to an FSRU for the first time.

by: Mark Smedley

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Natural Gas & LNG News, Africa, Asia/Oceania, Europe, Corporate, Investments, Infrastructure, Liquefied Natural Gas (LNG), News By Country, China, Egypt, Indonesia, Lithuania, Norway

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Hoegh To Convert 1st Ship to FSRU

Norway-based shipowner Hoegh LNG said August 24 it has signed agreements for its first Floating Storage and Regasification Unit (FSRU) conversion. Previously all its FSRUs (floating LNG import terminals) were purpose built.

The agreements were signed with Finnish turbine-maker Wartsila Oil and Gas and Saipem-owned engineering firm Moss Maritime and include ordering of equipment with a long lead time. By ordering in advance, Bermuda-registered Hoegh LNG hopes to reduce the conversion schedule by six months, so from 18 to 12 months, giving a planned delivery date for the FSRU conversion project end-2017. 

Hoegh LNG CEO Sveinung Stohle said: "By doing FSRU conversions, Höegh LNG can capture additional business opportunities with start-up at the end of 2017 and in 2018, which our FSRU newbuilding programme cannot meet. Our strong in-house technical expertise, and our ability to order critical equipment with limited risk due to our newbuilding programme, enables us to take advantage of the strong fundamentals in the FSRU segment."

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

The company has four purpose-built FSRUs currently operating as such: Hoegh Gallant at Ain Sokhna on Egypt's Red Sea coast (since April 2015), Independence at Klaipeda, Lithuania (since November 2014), PGN FSRU Lampung on the coast of southeast Sumatra, Indonesia (since July 2014), and GDF Suez Cape Ann which is seasonally deployed at Tianjin and was China's first FSRU (since early 2010). Others are currently working as LNG carriers or are still being built. Some of Hoegh's rivals such as Golar LNG and Excelerate Energy have already converted existing ships to FSRUs.

Hoegh LNG issues its 2Q 2016 results on August 25.

In February, it said a purpose-built FSRU, Hoegh Grace, was due to start as an import terminal in Colombia in 4Q 2016 but meantime is operating as an LNG carrier. While companies and countries are keen to import cheap LNG, creating demand for Hoegh's import terminals, there is correspondingly less demand for its services upstream and it has put its floating liquefaction project work on hold. It also booked a $37mn impairment charge for the cost of studies during the first quarter.

 

Mark Smedley

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