Hoegh LNG has completed a sale and leaseback deal with China Construction Bank Financial Leasing (CCBL) for one of its FSRUs.
The Oslo-listed company did not disclose the financial terms of the deal other than to say it has taken the vessel back on charter for 12 years.
“The sale and leaseback agreement with CCBL marks the start of a long-term relationship and provides opportunities for future growth,” the company said.
"Following the deal, Hoegh LNG is fully funded with both equity and debt for its current newbuilding programme, which will be completed with the delivery of Hoegh Galleon in August 2019."
The Hoegh Galleon has been employed on an 18-months interim LNGC time charter with Cheniere before its intended long-term charter with AIE in Australia.
Under the time charter, which commences in September 2019, Hoegh Galleon will earn a fixed daily charter rate.
Separately, Hoegh LNG also announced that it has also opened a representative office in Shanghai as it looks to "execute on its China growth story".
The company said it was the "only FSRU operator with operations in China" through its contract with energy giant CNOOC.
Earlier this year Hoegh LNG predicted that China would install several more FSRUs along its coastline as the country’s LNG imports grow.
“I have a very strong view that there will be a need for more import capacity in China and that will be covered in part by FSRUs,” chief executive Sveinung Stohle said at the LNG2019 meeting in Shanghai in April.
Stohle said Hoegh has also seen FSRU interest from other major importers and capacity holders in China. “It’s a huge market,” he said.
Profit down
News of the sale and leaseback came as Hoegh LNG reported a second quarter net loss of $3.6m, down from $4.5m in the previous quarter.
"This decrease is the result of lower EBITDA, partly offset by reduced interest expenses," it said.
Stohle said the results were also negatively affected by seasonal variations and dry docking costs.
"Adjusted for these effects our underlying numbers are in line with previous quarters," he added.
"I am very pleased to see that the LNG market continues its rapid growth by increasing 16% in the first half of 2019, driven by the continued coal to gas switch and ample LNG supplies available at very competitive prices across the market," he added.
"This is further reflected by the important progress being made on all FSRU projects where the company is already selected as the FSRU provider or has won exclusivity. In addition, the company is engaged in negotiations and business development activities that aims to see its complete fleet of FSRUs on long-term FSRU contracts by end of 2021."
