Norway’s Hoegh LNG has officially canned a project in Ghana that would have utilised one of its floating storage and regasification units.
The company said in its first quarter results that the milestone for its project with Quantum Power had not been met so the agreement between the two companies has expired.
Hoegh confirmed TradeWinds' report from March that Egyptian Natural Gas Holding Co (EGAS) has asked for an early termination of its contract on the company’s FSRU Hoegh Gallant (built 2014) which is not due to expire until April 2020.
But the company added: “Such an agreement requires Hoegh LNG’s consent.”
Hoegh president and chief executive Sveinung Stohle said: “.. if we agree we would expect to get remunerated for the remaining part of the contract."
Stohle said the other alternative would be to agree an extension of the charter on different terms.
He detailed that a third option would be to draw on the financial guarantee which is in place covering a large part of the remaining charter period.
“If that happens we will, of course, pursue legal action in case that doesn't cover what the remaining value of the contract is,” Stohle said.
The company said, “no assurance can be fiven on the timeline or success” of the GNL Penco FSRU project in Chile for which it is contracted to supply the floating regas unit can be given as final approval has yet to be secured.
Stohle explained Hoegh’s commercial focus is on securing long-term employment for its ninth and tenth, under-construction FSRUs which are due for delivery at the end of this year and in May 2019 respectively.
He said 2018 looks like “a much more active year” than seen in the last 12 months on FSRU business with activity concentrated in the Asian and Middle Eastern markets.
Hoegh also sees more segmentation with the market splitting into large, mid and smaller scale FSRUs, Stohle said.
He believes there will be decisions made before the end of this year which will permit the company to secure a long-term contract for its FSRU newbuilding number nine.
