LNG

TC Energy Corp., the North American pipelines company and supplier of LNG feed gas, said a transaction had been agreed to sell Portland Natural Gas Transmission System (PNGTS) for US$1.14 billion including debts to funds of BlackRock and Morgan Stanley Infrastructure Partners.

TC Energy has a partner in the PNGTS asset called Northern New England Investment Company, which is a subsidiary of Énergir L.P.

The sale to BlackRock, through a fund managed by its infrastructure business, and investment funds managed by Morgan Stanley Infrastructure, is for a gross price of US$1.14Bln, which includes the assumption of US$250 million of outstanding senior notes held at PNGTS.

PNGTS is a 475-kilometres (295-mile) FERC-regulated transporter of natural gas serving the upper New England and Atlantic Canada markets.

Natural gas flows

The pipeline receives natural gas from the Trans-Quebec and Maritimes (TQM) Pipeline via the Canadian Mainline.

TC Energy said it would provide customary transition services and would work jointly with the buyers to ensure the safe and orderly transition of “this critical natural gas system”.

The Calgary, Alberta-based company’s other key assets include the completed Coastal GasLink in British Columbia to supply feed gas to the LNG Canada project which advancing commissioning activities.

The PNGTS transaction implies a valuation of approximately 11.0 times reported 2023 comparable EBITDA.

“This announcement represents continued progress toward achieving our 2024 strategic priority of enhancing our balance sheet strength by delivering approximately $3 billion in asset divestitures,” said François Poirier, TC Energy’s President and Chief Executive.

“We are committed to reaching our 4.75 times debt-to-EBITDA upper limit by year-end and expect to have further asset divestiture announcements through the year,” Poirier added.

Asset sales

“This sale of a non-core asset at a strong valuation is a unique opportunity to support our capital rotation and deleveraging priorities while continuing to meet the needs of the communities PNGTS serves,” the CEO said.

TC Energy added that cash proceeds from the deal would be split pro-rata according to the current PNGTS ownership interests of TC Energy 61.7 percent and Énergir 38.3 percent and will be paid at closing subject to customary adjustments.

“As part of the transaction, the buyers will assume the outstanding senior notes held at PNGTS and currently consolidated on TC Energy’s balance sheet,” said TC Energy.

“The transaction is expected to close in mid-2024, subject to the receipt of regulatory approvals and customary closing conditions,” it added.

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, the leading floating storage and regasification unit (FSRU) operator with 10 modern vessels, said LNG continues to be a growth market and recent events in Ukraine had put energy on top of the agenda in Europe with increased interest in FSRUs.

Dec 7 (LNGJ) - Höegh LNG Holdings is planning to buy all the publicly held common units of New York-listed Höegh LNG Partners to combine both entities. “The Board received an unsolicited non-binding proposal from Höegh LNG Holdings pursuant to which Höegh LNG would acquire through a wholly owned subsidiary all publicly held common units of the Partnership in exchange for $4.25 in cash per common unit,” said Höegh LNG Partners.

   Höegh LNG has proposed that a transaction would be in the form of a merger between the Partnership and a subsidiary of Höegh LNG. “The Conflicts Committee of the HMLP Board, comprised of only non-Höegh LNG affiliated directors, will retain advisors and will evaluate the offer,” added the partnership.

Höegh LNG Partners, the US-listed company whose dominant shareholder is the de-listed Höegh LNG Holdings which is now partnered with the infrastructure unit of US investment bank Morgan Stanley, reported reduced third-quarter earnings in three revenue fronts for a reduced fleet of five vessels.

Höegh LNG Holdings, the Norwegian shipping company acquired in a takeover by Norwegian interests and a unit of US investment bank Morgan Stanley and de-listed, said it was seeking a new Chief Executive and President after Sveinung J. S. Støhle said he was stepping down after 15 years in charge.

Höegh LNG Partners, the US affiliate of Höegh LNG Holdings now partnered with the infrastructure unit of US investment bank Morgan Stanley, has reorganized part of its finances on a floating storage and regasification unit deployed in Indonesia and the subject of a dispute with the former charterer.

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.

Höegh LNG Partners, the US affiliate of Höegh LNG Holdings now partnered with the infrastructure unit of US investment bank Morgan Stanley, has seen its shares plunge over 60 percent after the dividend was slashed.

Höegh LNG Partners, the US affiliate of Höegh LNG Holdings now partnered with the infrastructure unit of US investment bank Morgan Stanley, has given the bank seats on the board.