Hoegh LNG Holdings signed LOI with Samsung Heavy Industries for four FSRU

Hoegh LNG FSRUHoegh LNG Holdings signed a letter of intent with Samsung Heavy Industries for construction one plus three floating storage regasification units. The FSRU are with capacity of 170,000 cbm and have regasification capacity of 750 MMScf/day and full trading capabilities. The ordered vessel was scheduled for delivery in 2019 and in case of order extension, the next deliveries will be done in 2019 and 2020. The final shipbuilding contract is expected to be signed in mid-January 2017, but finance details of the contract were not disclosed, as currently final details are under negotiations.

“Last week we secured a new FSRU employment contract, and today we follow up with the ordering of our next series of FSRU newbuildings, in line with our declared strategy. With this agreement with SHI, whose selection has been subject to a competitive international tender, Hoegh LNG has taken advantage of a very favorable newbuilding market to position itself for further expansion in the FSRU segment”, said the President and CEO of Hoegh LNG Holdings, Sveinung Stoehle.

The agreement with Samsung Heavy Industries follows the FSRU contract of Hoegh LNG with Quantum Power Ghana Gas Limited for the Tema LNG import terminal located close to Accra in Ghana. Tema will import 3.4 million tonnes a year from 2018. The contract is for a period of 20 years with a five year extension option for charterer and is expected to generate an average annual EBITDA of around 36 million USD.

The deal is very important for finance-troubled Samsung Heavy Industries, which suffers from liquidity problems and low cash flows, as well as increasing debt.