China National Offshore Oil Corp (CNOOC) is in the market for a second floating storage and regasification unit after taking delivery of a Hoegh LNG vessel.
But the Norwegian FSRU provider is baulking at providing more units on a seasonal basis.
The 170,000-cbm Hoegh Esperanza (built 2018) was delivered from South Korea's Hyundai Heavy Industries in April and commissioned as a floating terminal at Tianjin after arriving there in October.
CNOOC's three-year contract with a one-year option allows it to use the ship as an LNG carrier but specifies a minimum period per year as a floating terminal at a higher rate.
As a floating terminal, the unit has a throughput of five million to six million tonnes per year, Hoegh officials said.
Winter cover
But CNOOC officials said they need more FSRU capacity and are in talks to take a second Hoegh ship for the winter only.
However, Hoegh said it would not accept a seasonal charter for one of its FSRU newbuildings.
Sveinung Stohle, chief executive of Hoegh LNG Holdings, told TradeWinds that CNOOC's Tianjin LNG terminal is only one of several in northern China that are enquiring about chartering the next of his company's newbuildings in time for the cold.
Stohle would not be drawn on the identities of the specific customers but said they include southern and mid-coast importers with flat seasonal demand, and northern China terminals with more acute needs.
"What I can say is that we are in discussions with several importers for additional FSRUs. Several Bohai Bay importers are exploring how to expand their capacity for the winter," Stohle said. "We already have the Hoegh Esperanza in place, and, the way we see it, that gives us a competitive advantage."
Good negotiating position
"We have the world's largest FSRU ever built to be delivered in three to four weeks, and we are in a pretty good negotiating position," he added, referring to the HHI-built, 170,000-cbm Hoegh Gannett (built 2018), which is now on sea trials. "We really don't do deals for only a few months, because we have alternative employment opportunities."
He sees the quick lead time of installing an FSRU as one of Hoegh's selling points to energy markets needing to back away from coal in a hurry in response to Chinese environmental policy.
"For importers that already have a jetty built, the hardware takes us a matter of weeks to install," said Stohle. "If a jetty needs to be built, that would take six to 12 months more."
The Hoegh Esperanza is the first FSRU chartered to China. But the company has ambitions to supply the country's rapid growth in LNG demand, and Stohle told a recent conference in Shanghai that Hoegh's FSRU fleet, including newbuildings, could cover up to 70% of China's current import demand.
