LNG

Höegh LNG Partners, the US affiliate of Höegh LNG Holdings now partnered with the infrastructure unit of US investment bank Morgan Stanley, has entered into an agreement with New Fortress Energy for the charter of a floating storage and regasification unit.

Höegh LNG Partners said the “Höegh Gallant” has been chartered for a period of 10 years from the fourth quarter of 2021 to New Fortress with LNG-for-power projects in nations such as Mexico, Nicaragua, El Salvador, Jamaica and Brazil, as well as most recently in the Asian country of Sri Lanka.

The Höegh partnership has further entered into an agreement to suspend the existing charter for the “Höegh Gallant” with a subsidiary of Höegh LNG Holdings.

The LNG fleet controlled by Höegh LNG Partners consists of five vessels, mostly FSRUs that operate under long-term charters.

The vessels are the “Höegh Gallant”, the “Höegh Grace” and the “PGN FSRU Lampung” deployed in Indonesia, the “Cape Ann” and the “Neptune”.

Höegh shareholders had earlier approved an offer in March 2021 by a joint venture formed by Morgan Stanley Infrastructure Partners (MSIP) and Leif Höegh & Co., a family-owned Höegh shareholding, for a takeover.

The partnership said the charter rate for the “Höegh Gallant” would be lower than under the existing charter for the FSRU.

“However, under the Suspension Agreement, Höegh LNG's subsidiary shall compensate the partnership monthly for the difference between the charter rate earned under the new charter and the charter rate earned under the existing charter with the addition of a modest increase until July 31, 2025,” explained Höegh LNG Partners.

In addition, pursuant to the suspension agreement, certain capital expenditures incurred to ready and relocate the “Höegh Gallant” will be shared 50-50 between Höegh LNG Holdings and the Partnership.

The Höegh Board and the partnership’s “conflicts committee” have approved the new charter and the suspension agreement.

Sveinung Støhle, Chief Executive of Höegh LNG Partners, said the new long-term FSRU contract entered into with New Fortress was an important development for the partnership as it extends contract coverage and average charter lengths.

“The ‘Höegh Gallant’ will serve the Old Harbour facility in Jamaica, where its size and performance will enable New Fortress to further optimize its already highly successful operation,” added Støhle.