Höegh LNG Partners buys FSRU from its affiliate

Höegh LNG Partners has purchased the Höegh Gallant floating storage and regasification unit (FSRU) for $370m from a Höegh LNG Holdings (HLNG) subsidiary.

The NYSE-listed company will finance the purchase price by cancelling a $140m demand note from Höegh LNG Holdings and will issue seller’s credit of $47m due in 18 months to its subsidiary.

There remains $183m of existing debt related to the Höegh Gallant, which will continue to be outstanding.

The unit was delivered from Hyundai Heavy Industries in November 2014, after which it began a charter to Höegh LNG Egypt (EgyptCo), which commenced in April and will terminate in April 2020. EgyptCo has a charter with state-owned Egyptian Natural Gas Holding Company  that expires in April 2020.

Höegh LNG Partners estimates that the FSRU’s charter with EgyptCo will generate net annual contracted revenues of approximately $39m to $41m.

After EgyptCo’s charter expires or is terminated, Höegh LNG Holdings has the right to subsequently charter the vessel until July 2025 at a rate equal to 90% of the rate payable pursuant to the current charter with EgyptCo, plus any incremental taxes or operating expenses as a result of the new charter.

“The addition of the Höegh Gallant will increase the size of HMLP’s fleet from three to four FSRUs and diversify its operations,” said Richard Tyrrell, CEO and CFO of Höegh LNG Partners . “The transaction is consistent with Höegh LNG Partners’ strategy of growing distributions through accretive acquisitions.”

Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.
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