Shipowner Mitsui OSK Lines and energy company Uniper have put a giant $340m floating storage and regasification unit newbuilding on hold while the German outfit reassess its Wilhelmshaven terminal project for which the vessel was designed.
Sources working on the business said MOL will retain the newbuilding slot for the custom-designed 263,000-cbm FSRU at Daewoo Shipbuiding & Marine Engineering.
A Uniper spokesman previously told TradeWinds that discussions between the parties on the FSRU are confidential.
The newbuilding was announced by DSME in May 2020 and scheduled for delivery in 2023.
But the yard said the contract would only be signed off when a final investment decision (FID) had been taken on the project.
At the same time, MOL inked its 20-year charter deal on the unit with Uniper subsidiary LNG Terminal Wilhelmshaven (LTeW), which is acting as the terminal’s developer.
Long gestation
Uniper and MOL had spent almost two years moving the FSRU project on Germany’s North Sea coast to a point where the slot could be penciled in at the yard.
The trader is understood to have very high standards and taken a particularly detailed approach to the business, which has lengthened project timelines.
Uniper said in November that LTeW is “re-evaluating” its plans for the long-planned facility.
The company cited market players' reluctance to make binding bookings for import capacity at the planned terminal in the current market environment as the reason behind its decision.
LTeW’s market access process ended on 30 October. It said that while it had expressions of general interest from many companies, insufficient numbers were prepared to make firm bookings.
Uniper said it had previously stated that a FID on the terminal would be made on the basis of sufficient demand for its capacity and economic viability.
But the company has also thrown doubt on the LNG import project by saying it was considering new options to use the site for importing “environmentally friendly gas” or hydrogen in the longer term.
Greener gas
Uniper has said it plans to make its European power business carbon neutral by 2035. The company is shutting coal-fired production and is focusing on a switch to gas. But it has also said there is a need to make gas greener through carbon capture and a shift to hydrogen.
But Uniper chief executive Andreas Schierenbeck has also described LNG as “a growth market”, with natural gas playing an increasing role in ensuring security of supply and in decarbonising the global energy system.
MOL, which has worked with Uniper previously on LNG carrier orders, has had a bumpy ride on its large size FSRU newbuildings — the biggest two units worldwide.
It was the first to upscale the FSRU concept, contracting a 263,000-cbm FSRU at DSME for a since collapsed project in Uruguay.
The MOL FSRU Challenger (built 2017) has since gone on to find short-term work with Botas in Turkey and is this year due to start a long-term contract with CLP Power as the first regas unit in Hong Kong.
Fresh delays or an eventual cancellation of the Wilhelmshaven FSRU would also be bad news for DSME, which like most of its peers failed to meet its 2020 order target.
