Höegh LNG is upbeat on the group’s FSRU prospects as its profit rise comes on the back of an almost tripled average regasification flow rate on Höegh LNG’s FSRU fleet compared with the same quarter last year, owing to increased imports driven by ample supplies of LNG being available at low prices.
The owner of floating storage regasification units said in a statement: “The improved utilisation of all the FSRUs in Höegh LNG’s fleet confirms that the increase in LNG supply has strengthened the FSRU market fundamentals and provided additional support for the strategic drivers in the group’s long-term FSRU contracts.”
All five FSRUs in Höegh LNG’s fleet operated in accordance with contract and without incidents during the quarter, the company said.
"As a consequence of ample LNG being available at low prices, the average regasification flow rate on Höegh LNG's FSRU fleet has almost tripled compared with the same quarter last year," says the statement.
It adds:"This clearly demonstrates that demand for LNG into new markets continues to increase, and we observe the same effect for our FSRU services, since Höegh LNG is currently pursuing three fast-track FSRU projects that all have a start-up that matches the delivery of FSRU#7 in March 2017".
Höegh Grace was delivered from the yard on 31 March 2016, and immediately commenced operations under an intermediate LNG carrier charter. The intermediate employment lasts until start-up of the FSRU contract in Colombia
Additionally, the company said it is continuing to “pursue three FSRU projects with expected start-up dates
which match the delivery of the seventh FSRU in March 2017.”
Since a new FSRU order would not have delivery before late 2018, the Group is considering alternatives enabling it to secure more than one project with an early start-up date. Höegh LNG believes that a newbuilt FSRU offers the best project economics to the customer, however, to meet early start-up dates the Group is considering conversions of newbuilt DFDE LNGCs, which would include firm plans for ordering long lead items.
Höegh LNG added that the large increase in LNG liquefaction capacity has strengthened the FSRU market fundamentals, while the LNG carrier market remains
oversupplied and is expected to remain weak for the next two to three years.
The company said it is on track to achieve its FSRU growth plan of having 12 FSRUs in operations or under construction by 2019.