LNG

Tree Energy Solutions (TES), the future energy hub developer at the German North Sea port of Wilhelmshaven, said regulators had exempted the planned onshore liquefied natural gas terminal within the “Green Energy Hub” from tariff and third-party access regulations for a period of 20 years from the start of operations.

Uniper, the German utility almost brought down by the stoppage of pipeline natural gas supplies from Russia’s Gazprom and which is now importing LNG at Germany’s North Sea port of Wilhelmshaven, has suffered another setback by having to pay €550 ($602M) to a European LNG player after an arbitration ruling.

The Düsseldorf-based company, which had to receive a stabilization package from the German Federal government in 2022 to survive and reported net losses of €19 billion ($20.4Bln) in its most recent annual earnings, said the ruling came from an arbitration court over a contract concluded prior to the group’s spin-off in 2016.

Uniper said that the arbitration proceedings, under the rules of the International Chamber of Commerce, began in early 2021 and related to the pricing provisions of a long-term LNG supply agreement with an undisclosed counter-party.

Proceedings

“Uniper has been notified on 24 November 2023 of an award against a subsidiary in arbitration proceedings under the rules of the ICC which began in early 2021,” said the Uniper statement.

“The proceedings between the Uniper subsidiary and a European energy company relate, inter alia, to the pricing provisions of a long-term agreement for the supply of liquified natural gas (LNG), concluded prior to the spin-off of Uniper in 2016 and which has since expired,” Uniper explained.

“A payment to the opposing party of an estimated €550 million related to the retroactive re-pricing of the long-term agreement would be due under the terms of the award,” it added.

“The additional payment will have a full impact on the annual result of Uniper. Uniper is currently analyzing the reasoning of the decision and reviewing all possible avenues of legal recourse against the award,” stated the company.  

The 2017 report of the International Group of LNG Importers (GIIGNL) showed a 15-year contract under which Italian energy company Eni agreed to supply Uniper with 650,000 tonnes of LNG per annum between 2007 and 2022.

However, Milan-based Eni has so far declined to comment on the issue.

Uniper said in October 2023 that it expected adjusted earnings before interest and tax of between €6 billion to €7Bln and adjusted net profit of €4Bln to €5Bln.

Gazprom issues

Uniper was spun from German utility E.ON in 2016 and has also been involved in lawsuits against Gazprom, the former supplier of pipeline natural gas to Germany. At the time Uniper was under the control of the new owner, the Finnish power company Fortum.

However, Uniper was then formally taken over from Fortum in December 2022 in a deal with the German State that had included clearances from the European Commission to save Uniper from collapse.

Uniper itself had launched legal proceedings in 2022 against Gazprom which first cut and later suspended deliveries, sending Uniper into crisis.

Uniper’s bad luck was compounded in 2022 as it was also a buyer of LNG cargoes from the US Freeport LNG plant in Texas closed for part of 2022 and early 2023 by the June 8 fire.

The Wilhelmshaven LNG terminal commenced regular operations in March 2023, using the floating storage and regasification unit, the “Höegh Esperanza”.

The facility was developed by Uniper in record time and became the first German LNG import terminal to start operations on December 21, 2022, initially in trials. 

Uniper, the German utility almost brought down by the stoppage of pipeline natural gas supplies from Russia’s Gazprom and which is now importing LNG at Germany’s North Sea port of Wilhelmshaven, said it was considering the legal implications of the seizure of its assets in Russia.

Höegh LNG Holdings, the owner of 10 floating storage and regasification units and two conventional LNG carrier, has completed the acquisition of the LNG carrier “Golar Seal”.

The company purchased the 2013-built “Golar Seal” from Cool Co., the LNG shipping joint venture led by Eastern Pacific Shipping.

Höegh LNG paid $184.3M for the vessel with 160,000 cubic metres of capacity.

Hamilton, Bermuda-based, Höegh also assumed all costs associated with the vessel's scheduled dry-docking.

Höegh said that the “Golar Seal” would also be renamed the “Höegh Gandria”.

Höegh last month reported net losses for the fourth quarter and the year during a busy period as three vessels were prepared for floating storage and regasification unit (FSRU) operations in Germany and Brazil.

Höegh still posted increased revenues during the last three months of 2022 amounting to $106.06M, up from $94.66M in the same quarter of 2021. Full-year revenues rose to $380.8M from $351.8M in 2021.

FSRU market

The company increased vessel operating expenses primarily related to repositioning of three vessels to make them ready for FSRU operations.

All three vessels completed their FSRU operational preparations at shipyards during the fourth quarter and two 10-year time charter contracts with the German Federal Government were signed in December and January respectively.

The company’s FSRUs “Höegh Esperanza” and “Höegh Gannet” were allocated to contracts and deployed in Germany at the North Sea port of Wilhelmshaven and at Brunsbüttel on the Elbe River north of Hamburg.

The third vessel, “Höegh Giant”, left the yard in November and was operating in the LNG carrier market on an interim charter before it was scheduled to go to Brazil in the second quarter of 2023.

Höegh signed a 10-year charter agreement with a Brazilian joint venture comprising São Paulo Regas Company and Comgás, Brazil’s largest gas distributor.

Höegh added in its earnings statement that its business development team was in “active dialogue” with several potential new projects looking for FSRU capacity which could provide growth opportunities for the group in the future.

Höegh LNG Holdings, the owner of 10 floating storage and regasification units and two conventional LNG carriers, reported net losses for the fourth quarter and the year during a busy period as three vessels were prepared for FSRU operations in Germany and Brazil.

Feb 17 (LNGJ) - Uniper, the German utility almost brought down by the stoppage of pipeline natural gas supplies from Russia’s Gazprom, reported an annual net loss of €19.1 billion ($20.4Bln) in its earnings just published. The Düsseldorf-based company noted that it had to receive a stabilization package from the German Federal finance agency to survive. Uniper’s bad luck was compounded as it was also a buyer of LNG cargoes from the US Freeport LNG plant in Texas closed by the June 8 fire. This happened several months before Uniper completed its North Sea Wilhelmshaven LNG terminal using the floating storage and regasification unit, the “Höegh Esperanza”.

   Uniper expects profits to recover in 2023 after last year's record loss, as it now has access to LNG amid falling prices. “The exceptionally swift construction of Germany’s first LNG terminal in Wilhelmshaven has demonstrated that Uniper is a reliable partner for complex infrastructure projects,” said Klaus-Dieter Maubach, the Chief Executive of Uniper who is now stepping down.

Feb 10 (LNGJ) - Höegh LNG Holdings has signed a new loan facility agreement with a group of banks to refinance the “Höegh Esperanza” and “Hoegh Gannet” floating storage and regasification (FSRU) units employed on long-term contracts in Germany.

   Höegh’s new loan facility agreement is for a total of $685 million and for 10 years and will be used to repay existing loan facilities and for general corporate purposes “We are very pleased to secure an attractive, long-term finance for these two FSRUs with a strong group of international banks,” said Håvard Furu, the Chief Financial Officer of Höegh LNG.

Jan 19 (LNGJ) - Höegh LNG Holdings has signed a second binding 10-year charter deal with the German Federal Government for a floating storage and regasification unit (FSRU) and has allocated the vessel “Hoegh Gannet” to the contract. “The vessel ‘Hoegh Gannet’ will be deployed for the Elbehafen LNG project in Brunsbüttel and operated by Deutsche Energy Terminal GmbH,” said Höegh.

   The Elbehafen LNG import project is being developed by Germany utility RWE. Another of the company’s vessels, the “Höegh Esperanza”, was allocated to the project at the North Sea port of Wilhelmshaven being operated by German utility Uniper. “We are proud to sign the second contract with the Federal Government of Germany for the new LNG import terminal in Brunsbüttel and look forward to starting operations together with RWE,” said Erik Nyheim, the President and Chief Executive of Höegh LNG.

Germany’s energy regulator, the Bundesnetzagentur, said there was sufficient natural gas in storage to see the nation through the winter gas season to the end of March and concentration was now fixed on the 2023-2024 gas season even as regular LNG have not yet started beyond commissioning activities at the ports of Wilhelmshaven and Lubmin.

German Chancellor Helmut Scholz has led an inauguration ceremony for the nation’s first LNG floating storage and regasification unit (FSRU), the “Höegh Esperanza”, at the North Sea port of Wilhelmshaven.