Höegh LNG Holdings has received commitment letters for US$223 million in bank financing for its seventh floating storage and regasification unit (FSRU), which is scheduled to be delivered by end of the first quarter next year.
The financing will fund 65 per cent of the delivered cost with a 15-year amortisation profile increasing to 75 per cent and to 20 years when the vessel secures a long-term contract. The structure has a five year post-delivery tenor and the flexibility of being dropped down to Höegh LNG Partners with the FSRU.
Höegh says the interest rate will be swapped and expects it to be fixed at around 3.8 per cent. President and chief executive Sveinung Støhle said in a statement: "With this transaction, Höegh LNG has once again secured competitive debt financing for its FSRU fleet expansion, and this time at the lowest cost ever achieved by the company.
“The financing terms reflect the financial strength of Höegh LNG's balance sheet, in addition to its position as the market leader in the FSRU segment."
Oslo-based Höegh LNG, which is seeking to become an energy-infrastructure player, has eight FSRUs on the water and on order and plans to increase that fleet to at least 12 by 2019. Five FSRUs are stationed in Colombia, Lithuania, Indonesia, China and Egypt, a sixth is chartered to Engie as an LNG carrier.
The seventh FSRU, a 170,032mᵌ vessel, is unfixed. The eighth, a 170,000mᵌ vessel will be based at Penco-Lirquen in Chile. Höegh’s strategy is always to have one FSRU available for charter.
However, the company announced two weeks ago that it will focus solely on FSRUs and has halted its efforts to enter the fledgling floating LNG (FLNG) market.
It now plans to position itself as a “leading owner and operator of floating LNG import terminals” and to be “to be the industry leader of floating LNG solutions, seeking to secure long-term contracts with strong counterparts at attractive returns.”