Hoegh LNG, the listed LNG carrier and floating storage and regasification unit (FSRU) owner in the Leif Hoegh group of Norway, sees strengthening demand for FSRUs.
The group, which owns four FSRUs and five LNG carriers, reported a 2Q15 net profit of USD 5.9 million compared to a loss of USD8.6 million in the same period last year. Revenues rose to USD50.2 million from USD17.2 million.
In 1H15, the company made a net profit of USD3.6 million compared to a USD13 million loss. Revenues reached USD93.3 million from USD34.9 million.
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In the latest quarter, the company decided to grow its newbuilding portfolio and placed an order for eight FSRUs and secured an option for a ninth vessel. A 20-year FSRU contract was signed with a customer in Chile and a FSRU commenced operations in Egypt. The company also sold one LNG carrier and transferred another one to an associated company.
Hoegh LNG said the global LNG liquefaction capacity currently amounts to about 260 million tonnes per year, but it is due to grow by 50% in the next five years. This should, together with lower energy and LNG prices, lead to higher demand for LNG and consequently FSRUs to receive the LNG. “The company has already experienced that the lower LNG prices have led to higher demand for FSRUs, and the company’s list of potential FSRU projects world-wide has increased from around 30 to around 35 in last few months,” it said in a statement.
“Being less capital intensive, quicker to build and more flexible, FSRUs have become the preferred solution for new importers, and with the leading position in the FSRU market and a strong track-record of securing new contracts, the company is well positioned to succeed with its stated growth strategy for the FSRU segment,” Hoegh LNG said.
“Within FLNG [floating LNG production], the company is continuing to focus on its north American projects where it believes that it should be able to offer a competitive unit price and increased flexibility compared to US land-based LNG liquefaction terminals,” the company concluded.