Höegh LNG Holdings Ltd. (Höegh LNG) today signed a time charter for the floating storage and regasification unit (FSRU) Höegh Esperanza with CNOOC Gas & Power Trading and Marketing Ltd. (CNOOC).
The time charter is for three years with a one-year extension option. Under the contract, Höegh Esperanza will be utilised in FSRU mode at the Tianjin LNG terminal in China for no less than an agreed-upon minimum period each year, with the balance of the year in LNGC mode and/or FSRU mode. The contract will commence with immediate effect, and has a rate structure that corresponds to the mode of use.
Chinese policies to encourage consumers to transition from coal to gas have caused natural gas consumption to increase sharply. This increased demand has required significant increases in LNG imports, as evidenced by China importing 12.7 million tonnes of LNG in the first quarter of 2018, or 61% more than in the same period of 2017. To enable further growth in Chinese LNG imports in line with these policies, additional LNG import facilities need to be developed, including FSRUs.
Höegh Esperanza was delivered from Hyundai Heavy Industries in South Korea on 5 April 2018. This high-specification FSRU is designed for open, closed or combined loop regasification operation. It has a storage capacity of 170 000 cbm of LNG and a maximum regasification rate of 750 million standard cubic feet per day. It is equipped with a GTT Mark III membrane containment system and dual-fuel diesel-electric (DFDE) propulsion.
Höegh LNG's CEO and President, Mr Sveinung J.S. Støhle comments: "We are proud to sign this strategically important contract with CNOOC, the largest of the Chinese LNG companies by volume. Given the short lead time, deployment flexibility and clear cost advantages, FSRUs are today the preferred solution for imports of LNG. Höegh LNG is the only FSRU operator with operating experience in China, and we see the potential for Höegh LNG to provide additional FSRUs to this large and rapidly growing LNG market. Höegh Esperanza will start generate revenues under this contract immediately, and Höegh LNG's delivered fleet is with this fully employed."
Source: Höegh LNG