Hoegh LNG eyes tighter FSRU market

Norwegian shipowner Hoegh LNG expects a tighter market for floating storage and regasification units (FSRUs), as demand for the units is due to outstrip availability, it said today.

There are currently 42-62 proposed import projects using FSRU facilities, Hoegh said, noting that only seven of these have signed charter agreements for the vessels. This would leave around 35-55 projects still seeking to secure FSRU vessels, including those yet to reach a final investment decision (FID).

But there are only three newbuild FSRUs on the global orderbook, the firm said, with nine additional FSRUs currently operating as LNG carriers, bringing availability for new projects to around 12 units. And six term charters on FSRUs currently operating with import projects are due to finish by the end of 2023, which could lift supply to around 18 vessels, well below the firm's expectations for FSRU demand.

Increased interest in FSRUs

Hoegh LNG is seeking involvement in two more import projects requiring FSRUs, in addition to the three projects already announced by the firm.

The shipowner is already involved in two planned Australian import projects — the Port Kembla and Crib Point facilities — which are expected to be commissioned in 2021 and 2022, respectively. Hoegh has signed a charter agreement for the provision of an FSRU to Crib Point, and is still under negotiations for such an agreement for Port Kembla.

The firm is also in negotiations to provide a unit to an unnamed facility in Asia, with start-up expected in 2020-21. Hoegh's participation in the project, which is being developed by an "energy major", is conditional on a final investment decision, as is its provision of an FSRU to the Port Kembla venture. But the firm has exclusivity for the provision of an FSRU to this third project.

Hoegh is also seeking participation in two more, as yet unnamed, import projects, based in south Asia and South America. The firm is participating in tender processes for the projects, awards for which are expected in 2020, it said.

The firm is also seeing increased interest from European firms for the provision of FSRUs, noting that low delivered LNG prices have buoyed inquiries over the past few months.

Few LNG-to-power opportunities

Hoegh LNG is not seeking to follow its partially-owned subsidiary Avenir LNG into the small-scale market, the firm said today, but is looking at supplying vessels for LNG-to-power projects.

But most existing generation facilities currently using coal or fuel oil would not require floating storage units (FSUs) as large as Hoegh's vessels, the firm said.

By Samuel Good