Hoegh Profits Weaken: Muted 1H for FSRUs (Update)

see final para for update on Hoegh's FSRU in Egypt

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Oslo-based, Bermuda-registered shipowner Hoegh LNG reported weaker profits in second quarter: net profits in 2Q2018 were $7.8bn, down from $8.5mn in 2Q2017 and $13.2mn in 1Q2018.

Hoegh LNG CEO Sveining Stohle pointed to the 3-year charter to Chinese state CNOOC in June of Hoegh Esperanza, one of Hoegh’s fleet of eight floating storage regasification unit (FSRU) vessels. Its FSRU number 9 is due to be delivered in November 2018, for which it recently secured financing. The worldwide FSRU fleet consisted of 29 units at 30 June 2018, it noted.

Esperanza was originally earmarked to the GNL Penco project in Chile, but parties there said it was was likely to be further delayed and therefore agreed to let their FSRU contract expire.

“We are proud to have been selected as the FSRU provider for AIE’s FSRU project in Port Kembla in Australia, which we believe to be a strong candidate for achieving a final investment decision,” added Stohle, describing Australia as an “attractive end-market.”

Regarding FSRUs, Hoegh said: “Following a muted 2017, the tendering market has returned to a high level of activity” and that Hoegh was positioned in several tenders with a 2019-20 timeframe.

In its market analysis however, it noted that worldwide LNG imports through FSRUs in 1H2018 declined by 6.6% year on year, as indigenous gas production in Egypt (where Hoegh Gallant is active as an FSRU, see blue ship on banner vessel, courtesy of Hoegh LNG) and the Mideast Gulf increased, but that new countries also began importing LNG through such floating terminals.

Earlier this year it acknowledged that Egypt had asked Hoegh to release it from the charter of its FSRU, Hoegh Gallant, prior to April 2020 when it would normally expire.

A Hoegh spokesman told NGW Aug.24 that the only related comment made by executives at its analysts briefing Aug.23 was: "We have an excellent relationship with its charterer Egas, and that Hoegh Gallant will remain on contract until April 2020."