Norway´s Höegh LNG, an owner and operator of floating LNG import terminals (FSRUs) and LNG carriers, is in ‘active dialogue’ with new projects for FSRUs which could provide growth opportunities for the group in the future. Its entire fleet is either operating under or committed to long-term contracts with strong counterparties, and its contract coverage for 2023 is close to 100%, as the company reveals in its interim report.
Although revenues increased for Norwegian FSRU operator, the group incurred higher expenses in 2022, due to higher vessel operating expenses for three vessels which were in yard to complete class renewals and modifications.
The fleet delivered a stable operating performance in the fourth quarter. However, as Höegh LNG explains, each of Höegh Esperanza, Höegh Gannet, and Höegh Giant were idle for a period of about 35 days on average, while finalising the class renewals and modifications to be carried out to prepare the vessels for FSRU operations.
Now Norway’s Hoegh LNG sees ongoing high demand for floating storage and regasification units and is in talks with new projects.
“While Höegh LNG has secured long-term contracts for its entire fleet of FSRUs, the business development team is in active dialogue with several potential new projects looking for FSRU capacity,” as it is pointed out by the company. The acquisition of the LNG carrier Golar Seal also provides flexibility to pursue FSRU conversion opportunities, as the FSRU´s operator reveals in its interim report for the quarter and year ended 31 December 2022.
The company´s near-term focus is to ensure the new FSRU projects commence operations as planned by its customers in Germany and Brazil over the coming months. Furthermore, in the company´s plan is the commencement of the contract with AIE in Australia with expected start towards the end of this year.
The fourth quarter was a busy quarter for Höegh LNG, preparing the three vessels, as it is mentioned earlier, for FSRU operations in Germany and Brazil.
Currently all three vessels, completed the preparations at the yard during the quarter, and the two 10-year time charter contracts with the Federal Government of Germany were signed in December and January respectively. Höegh Esperanza and Höegh Gannet are allocated to these two contracts and are already in place in Germany, located in Wilhelmshaven and Brunsbüttel. The third vessel, Höegh Giant, left the yard in November, and is now operating in the LNG carrier market on an interim charter, before it is scheduled to go to Brazil in the second quarter of 2023, and commence operations under Höegh LNG’s 10-year time charter contract with TSRP/Compass.
Now Höegh´s entire fleet is either operating under or committed to long-term contracts, and its contract coverage for 2023 is close to 100%, with the exception of some expected idle time between contracts for Höegh Giant and Höegh Galleon in 2023.
On 20 February 2023, Höegh LNG announced an agreement to acquire the 2013-built LNG carrier Golar Seal with 160,000 cbm cargo capacity. Höegh LNG expects to take delivery of the vessel in late March or April 2023 and subsequently employ the vessel in the carrier market on a term time charter.
Furthermore during February 2023, Höegh LNG signed a new loan facility agreement with a group of banks to refinance Höegh Esperanza and Höegh Gannet, both employed on long-term contracts in Germany. The new loan facility agreement is for a total amount of USD 685 million and has a tenor of 10 years, as the company reveals in its report.