LNG

Höegh LNG Holdings Ltd, the owner and operator of 13 LNG vessels including floating storage and regasification (FSRU) units, said the outlook for the FSRU market was expected to remain strong as another terminal plan progressed for the Netherlands in the port of Vlissingen.

Höegh LNG Holdings, the owner of 10 floating storage and regasification units (FSRUs) and two conventional carriers, posted a quarterly loss because of operational issues and ships being out of contract ahead of being re-deployed.

Höegh reported a net third-quarter loss of $45.9 million, which was wider than the $3.14M loss posted in the same three months of 2021.

The Bermuda-based company, now owned by Norwegian interests and US equity funds managed by US bank Morgan Stanley, reported higher third-quarter revenues of  $96.09M versus $86.15M in the same quarter of 2021.

“The fleet delivered a stable operating performance in the third quarter,” said Höegh.

“However, the ‘Höegh Giant’ has been idle since late April following the termination of its FSRU contract and the ‘Höegh Gannet’ was idle for a period towards the end of the third quarter while repositioning to a yard for class renewal and modifications to be carried out in the fourth quarter to prepare the vessel for FSRU operations,” explained the company.

“Furthermore, ‘Neptune’ was out of service for a period in the third quarter for regular class renewal and maintenance,” it added.

Höegh said the following the surge in demand for FSRUs earlier this year, the company has secured long-term FSRU employment for its entire fleet.

Lithuania FSRU

Additionally, the Lithuanian charterer of the vessel “Independence” has declared the purchase option to acquire the FSRU in December 2024.

The FSRU has been in operation at the Baltic port of Klaipeda since October 2014 for a charter cost of around $68 million per annum.

The charterer of the “Independence” is the energy storage company Klaipėdos Nafta.

Höegh said that its main business focus now was to prepare its FSRU fleet for the start-up of the new contracts and to ensure the projects are delivered on time, except for the potential later start of the contract in Australia.

The company added that it had settled the differences of the cancellation of an FSRU deployment on the West Coast of India.

“Following Höegh’s termination of the ‘Höegh Giant’ FSRU contract in India in April, Höegh reached an agreement with the previous charterer (H-Energy) in July dropping all claims and counterclaims against a settlement amount to be paid by Höegh and the ‘Höegh Giant’ thereafter left India,” it explained.

“The vessel was modified and prepared for FSRU operations at a yard during October-November, and will be allocated to one of the group’s new FSRU contracts,” stated Höegh.

The company said that it was also still involved in pending arbitration with the charterer of “PGN FSRU Lampung”, the FSRU deployed in Indonesia.

Outlook

Höegh said in its outlook for the coming year that the company’s main operational focus was to prepare the FSRUs for start-up of their new contracts.

“Looking further ahead, the company will start considering potential growth opportunities including expansions of its FSRU fleet with newbuilds, or the conversion of LNG carriers to FSRUs to meet the increased demand for FSRUs,” it stated.

The group expects that the results for the fourth quarter of 2022 will be impacted by three FSRUs being out of service for modifications.

“The three FSRUs will be without revenue for a period, and costs involved with the modifications may be partly expensed as operating expenses and partly capitalized as investments depending on the nature of the costs incurred,” added Höegh.

The LNG shipping company, one of the sector’s pioneers, completed its own overhaul in 2022 with a merger and is owned by Larus Holding Limited, a 50-50 joint venture between Norway’s Leif Höegh & Co. Ltd. and US equity funds managed by Morgan Stanley Infrastructure Partners.

Höegh LNG Holdings Ltd and Australian Industrial Energy have signed a final charter deal for the deployment of a floating storage and regasification unit at Port Kembla south of Sydney to help ease energy shortages in the state of New South Wales.

One of Australia’s leading energy market regulators has said that the events in Ukraine had pushed global energy markets further into the unknown and that gas supply problems for Europe could get much worse and LNG exporter Australia is also on course for severe gas shortages.

Australian company Venice Energy has received approval from the state government of South Australia to construct an import facility in Port Adelaide even as the nation is the World's No. 1 exporter.

Australian Industrial Energy, a company controlled by billionaire businessman Andrew Forrest, has signed a long-term charter deal with Höegh LNG for a floating storage and regasification unit (FSRU) to operate at Port Kembla, south of Sydney

Japanese liquefied natural gas imports jumped for a third month in July with higher volumes arriving from all regions apart from the Middle East at prices over 40 percent higher than a year ago, while thermal coal shipments for power use also jumped as the nation hosted the Olympic Games.

The July 2021 LNG shipments amounted to 6.18MT, or around 90 cargoes, which was 2.5 percent higher than the 6.03MT received in July 2020, according to the trade figures from Japan's Ministry of Finance.

The June deliveries had amounted to 5.70MT, up 8.5 percent from the 5.26MT received in June 2020.

Japan’s shipments in July 2021 cost 343.62 billion yen ($3.21Bln), a rise of 42 percent on the 242.14Bln ($2.20Bln) spent in July 2020 for slightly fewer cargoes.

LNG competes mainly with thermal coal for power generation in Japan.

Japan’s thermal coal imports in July 2021 came to 9.81MT, which was 10.90 higher than the level of shipments a year ago and on June’s imports of 7.49MT of thermal coal.

Nuclear power generation in Japan is still much reduced with only five plants with nine reactors from a total of 16 plants with 50-plus reactors having gained the agreement of local authorities to resume operations.

Just nine of these reactors are currently on line at six plants.

LNG cargo deliveries to Japan during July 2021 from nations such as Malaysia and Indonesia, Papua New Guinea and Brunei rose by 24.6 percent to 1.44MT compared with July 2020.

Middle East shipments from countries like Qatar and Oman dropped 8.8 percent year-on-year to 886,000 tonnes.

Shipments from Russia last month almost doubled to 761,000 tonnes. US cargo deliveries to Japan also jumped year-on-year but at a more modest 31 percent to 611,000 tonnes.

The balance of imports in July 2021 came from Australia, African nations and the spot market.

That segment of the imports was higher than the previous month at 2.48MT compared with 2.25MT in June 2021.

Annual shipments of LNG to the Japanese import network of 37 facilities came to 74.46MT in 2020, down 3.7 percent compared with the 77.32MT received in 2019.

Imports by the world’s largest buyer of LNG have continued to drop in recent years. The 2019 total of 77.32MT was 6.7 percent lower than the 82.85MT logged in 2018. 

Leading Australian gas and power supplier AGL Energy has confirmed it will cease any further development of the proposed Crib Point LNG import project in the southern state of Victoria as it also pursues a corporate overhaul by spinning off infrastructure assets.

Leading Australian gas and power supplier AGL Energy with LNG import plans for south Australia has decided to split into two companies, one holding the assets of the retail electricity and gas business and another owning the infrastructure such as power plants.

Leading Australian utility company AGL Energy posted a large fiscal first-half loss due to impairments but in post-earnings statements the company said it expected to make a final investment decision soon on the liquefied natural gas import project at Crib Point in the southeast Australian state of Victoria.