Höegh LNG Announces New JV with STX Pan Ocean, Orders Fourth FSRU

stx frontier
Image courtesy Höegh LNG

Bermuda-based Höegh LNG announced today a new joint venture with STX Pan Ocean that gives each party a 50% stake in the  153,600 cubic meter, tri fuel, diesel electric LNG carrier, STX Frontier.  According to their company presentation in May, this 50 percent stake was worth upwards of $194 million.

Höegh lngHöegh LNG has operated the vessel it since its delivery from the Hanjin shipyard in 2010 and it will be delivered to the joint-venture between April 2013 and October 2013, upon completion of its current charter to Repsol.

Due to the strong backwardation in the LNG shipping market, Höegh LNG will primarily focus its commercial activities for STX Frontier on the medium term market, i.e., in the 3-5 years time charter market, because this is the segment which offers the best returns.  Höegh LNG is currently in discussions with several potential customers, both existing and new, for chartering of the vessel.

President and CEO Sveinung J.S. Støhle says in a comment: “We are very pleased to be adding the STX Frontier to our fleet in cooperation with STX Pan Ocean.  The 50% ownership has been acquired at an attractive price, the timing of the delivery by mid next year is in a good window, and we are very confident that STX Frontier will be a solid contributor to Höegh LNG’s net profit starting in October 2013, at the latest.”

Höegh LNG gives more backlog to Hyundai Heavy

Höegh LNG also announced today that they have exercised an option for a fourth new floating storage and regasification unit (FSRU) to be built at Hyundai Heavy Industries Ltd. in South Korea.  The vessel will be able to operate as a floating LNG import terminal, as well as an ordinary LNG carrier.  The FSRU will be delivered in the first quarter of 2015, and its specifications will be adapted to comply with relevant project requirements.

Höegh LNG’s President and CEO, Sveinung J.S. Støhle, commented:  “With our three FSRUs on order allocated to specific projects in Indonesia, Lithuania, and Chile, Höegh LNG continues its growth within the floating regasification market.  We are involved in several new floating LNG import terminal projects being developed worldwide, and our purpose built FSRUs with larger storage and regasification capacity, higher energy efficiency and improved reliability have proven to be appreciated by our customers.  We have therefore decided to continue our newbuilding programme by exercising an option to build a fourth new FSRU at Hyundai.  Our strategy to expand in the floating regasification market worldwide remains firm.”

Höegh LNG is a fully integrated floating LNG services company with almost 40 years experience, offering long-term floating production, transportation, regasification and terminal solutions for the liquefied natural gas (LNG) market. The company operates a fleet of six LNG carriers and two floating storage and regasification units (FSRUs).

In addition, Höegh LNG has three FSRUs under construction at Hyundai Heavy Industries. The company holds a significant project development portfolio for floating regasification as well as floating LNG production (FLNG).