Indonesian LNG importer PGN plans to start arbitration talks with the intention of terminating its charter on a floating storage and regasification unit (FSRU), the vessel's owner Hoegh LNG said today.
PGN holds a 20-year charter on the 170,000m³ PGN FSRU Lampung, which has been operating as a 2.7mn t/yr LNG import facility on the southern tip of Indonesia's Sumatra island since 2014.
But the charterer raised operational issues regarding the vessel and its charter earlier this month, owner Hoegh LNG said, noting that PGN has subsequently said it will commence arbitration in an attempt to declare the charter null and void, or to terminate the charter. Hoegh LNG did not say what issues had been raised, but said it considers PGN's position to be without legal merit following an initial review.
The vessel will continue to operate according to its charter, although the firm is seeking alternative solutions in its refinancing of the FSRU after PGN failed to countersign documents required for a new credit facility that was already in place, Hoegh LNG said. The vessel's current debt facility is set to mature in late September this year.
Utilisation at the Lampung import terminal has held low since it came on line in 2014, receiving just three cargoes so far this year, Vortexa data show, with no deliveries in 2020 and six a year earlier.
