LNG

AGL Energy, the Australian utility whose plans for an LNG import terminal in the state of Victoria were thwarted by regulators, has rejected an unsolicited joint bid of over US$3.5 billion from Brookfield Asset Management of Canada and one of Australia’s wealthiest individuals.

Hoegh LNG, the Norwegian LNG fleet owner and project developer, posted lower profits and higher revenues in the first quarter as it expects four new regasification ventures, two of them in Australia.

Hoegh reported first-quarter net profits of $4.51 million compared with $13.21M in the same three months of 2018.

The company said the decrease in profits was the result of lower earnings from the amended contract for the “Höegh Gallant” floating storage and regasification charter with Egypt Natural Gas Holdings Company at Ain Sokhna port in the Gulf of Suez and higher depreciation and interest expenses.

Hoegh’s total quarterly revenues rose by 16.5 percent to $84.29M from $72.29M in the same quarter of 2018. Operating profit was $29.74M versus $26.79M in the year-ago quarter.

In its operations and marketing, Hoegh said it won exclusivity and had been selected for a total of three FSRU contracts.

“Of these, two developments are based in southeast Australia while the third addresses a south Asian market. In addition, the group remains involved in the final round for one ongoing FSRU tender,” said Hoegh.

The Norwegian company was selected during December 2018 by a subsidiary of AGL Energy as the FSRU provider for its LNG import facility under development at Crib Point in the Australian state of Victoria.

The signed time charter party (TCP) is for a period of 10 years with anticipated start-up in 2020-2021.

“The contract remains conditional on a final investment decision by AGL in relation to the project, and on the receipt of key regulatory approvals,” said Hoegh.

The FSRU assigned to the Crib Point project is expected to generate annual earnings of between US$29M and US$31M, depending on planned technical modifications which may be specified by AGL before project start-up.

The most likely FSRU candidate for this project is the “Hoegh Giant” FSRU.

Hoegh added that it had achieved exclusivity for the Australian Industrial Energy (AIE) import project at Port Kembla in Australia.

AIE has received a development consent award from the New South Wales government, meaning the project is ready for construction subject to a final investment decision.

AIE intends to install an FSRU to supply the New South Wales natural gas market and is backed by a consortium consisting of Squadron Energy, owned by Australian industrialist Andrew Forrest, JERA Co. Inc. of Japan, the largest buyer of LNG in the world, and Japanese trading house Marubeni Corp., a major trading and investment firm.

Hoegh plans to use its FSRU No.10 for this project. The latest vessel is scheduled for delivery from the Samsung Heavy Industries shipyard in South Korea by August 2019,

“Progress has also been made by the third project to which the group has been granted exclusivity. Intended for a south Asian market, this is in the process of securing the operating permits it needs and a final investment decision,” said Hoegh without disclosing the name of the other party nor its exact location.

The fourth project, where Hoegh is in the final selection round, is targeting a decision by mid-2019.

Hoegh said it was additionally involved in several other tender processes at various stages of development.

“China remains a key focus area, since growth in regasification capacity has lagged behind the increasing demand for natural gas for the Chinese market,” stated Hoegh.

The company also noted that its FSRU “Independence” deployed on the Baltic coast of Lithuania successfully underwent its first class-renewal survey while afloat in Klaipeda harbour.

“Since the survey was performed without the requirement to re-position to a dry dock, time out of service was minimised,” said Hoegh.

“The ‘Independence’ is now approved for another five years of service until its next renewal survey, which comes up in 2024,” added the company.

Hoegh said that three other vessels, the “Hoegh Gallant”, the “Neptune” in Turkey and the “FSRU Lampung” in Indonesia, will undergo their five-year class renewal surveys later this year.

“While ‘FSRU Lampung’ and ‘Neptune’ are to be surveyed afloat, the ‘Hoegh Gallant’ will be dry-docked since it currently trades as an LNG carrier,” added Hoegh.