Hoegh terminates FSRU charter for Pakistan LNG project

HOEGH GALLANT

Oslo-listed Hoegh LNG has terminated an FSRU charter agreement with Global Energy Infrastructure Limited (GEIL) for an LNG import project in Port Qasim near Karachi, Pakistan.

Based in Pakistan, GEIL is developing an LNG receiving terminal at Port Qasim. Besides the FSRU charter with Hoegh LNG, GEIL signed a long-term LNG supply agreement with Qatargas on 29 September 2016 for the project.

Hoegh LNG announced on Friday (24 November) that it has considered its options under the contract with GEIL and informed the latter of the termination the same day.

According to its website, GEIL obtained the relevant licences for the project from local authorities in 2011.

On 7 February 2017, it formed a consortium with Qatar Petroleum, France’s Total, Japan’s Mitsubishi, ExxonMobil, and Hoegh LNG for the same project. This would encompass an FSRU, a jetty, and a pipeline to shore, providing at least 750 million ft3 of regasification capacity per day by 2018.

Prior to Hoegh LNG’s termination, Reuters reported in late October that ExxonMobil was pulling out of the project because of issues with partners, in particular GEIL.

Pakistan has one of the fastest growing energy demands in the South Asian continent and LNG developments at Port Qasim are necessary to meet rising demand for LNG imports.

The terminated FSRU contract between Hoegh LNG and GEIL was inked on 15 December 2016, for a period of 20 years with two five-year extension options for the charterer. Hoegh LNG had expected to generate annual revenue of about USD36 million.

At that point in time, construction of the terminal was expected to commence early 2017 and start up in the second quarter of 2018. Hoegh LNG would provide the FSRU from its portfolio of FSRUs, which includes units under construction, on order, or pending planned conversion.

Hoegh LNG said it continues to pursue several employment options for FSRU #9, which has been earmarked for the GEIL project.

“The company remains optimistic that firm FSRU employment will be in place before delivery end-2018.”

According to data from IHS Markit Maritime Portal, Hoegh LNG has two newbuild FSRUs under construction, each capable of holding about 170,000 cbm of liquid gas. The unit under construction at Hyundai Heavy Industries will be ready in 2018 while it expects another from Samsung Heavy Industries in 2019.

[fairplay.ihs.com]

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