Amid the Covid-19 pandemic, major FSRU owner Höegh LNG has imposed a ‘lock down’ on all of its vessels with no crew rotation and banned visitors on board to protect seafarers from infection until further notice
Other measures enacted by Höegh LNG to the coronavirus pandemic include its onshore employees working from home and it has established a Covid-19 task force to monitor the situation and perform relevant risk assessment on a continuous basis. The task force reports directly to Höegh LNG chief executive and president Sveinung J S Støhle.
Höegh LNG reported its FSRUs and LNGCs “are fully operational and manned according to relevant safety requirements.” Further, the company added “all charter parties remain in full force and effect and the revenues from the contracts are maintained as per their contractual terms.”
Mr Støhle, pointed out “despite the coronavirus crisis and turbulent markets, the company had successfully increased the facility amount for FSRU Independence, and at the same time reduced the funding margin, which “demonstrates Höegh LNG’s market position and the company’s strong and long-lasting relationship with our core banks.” He added, “The new LNGC charter confirms Höegh LNG’s ability to secure firm interim business for its FSRU assets.”
A subsidiary of Höegh LNG has entered into an interim LNG carrier time charter with an Asia-based trading house.
Höegh LNG reported the rate for the seven-month time charter that will start mid-2020 reflects the current term market for large size dual-fuel, diesel-electric (DFDE) LNG carriers. Plans call for either Höegh Gannet or Höegh Gallant to be deployed for this contract, which will increase Höegh LNG’s contract coverage for 2020 to around 92%.
Meanwhile, Höegh LNG also reported it had secured a letter of commitment from five banks to amend, extend and upsize the debit facility for the FSRU Independence. Once completed in Q2 2020, the terms of the debt facility will change from US$61M maturing as of May 2020 to US$106M maturing as of December 2024. Höegh LNG said as a result of the transaction the blended amortisation profile will be stretched out and the funding cost significantly reduced, to an estimated blended average interest rate of about 4.0% for the full facility. Höegh LNG plans to use the additional available US$45M under the debt facility for ‘general corporate use.’
Independence temporarily shut
Built by South Korea’s Hyundai Heavy Industries in 2014, Independence is operating at the Klaipėda LNG terminal in Lithuania under a charter to Klaipedos Nafta.
Dredging maintenance at the Klaipėda LNG terminal will temporarily shut the FSRU Independence from 30 March to 5 April.
Plans call for the FSRU to be moved from the terminal near Kiaulės Nugara Island to the quay owned by Klaipėdos Smeltė AB while the accumulated sediment is dredged. The Klaipėda State Seaport Authority (KSSA) has contracted Belgian dredging and marine construction company Jan de Nul NV to perform the maintenance, which will require about 50,000 m3 of sediment to be removed.
Klaipėdos Nafta chief executive Darius Šilenskis said this is the third time that such dredging maintenance has been performed adding, “this temporary re-mooring and suspension of operations of the LNG vessel is not a new experience for us.” The terminal opened in December 2014.
Mr Šilenskis added that certain technical maintenance work was also planned while operation of Independence is temporarily suspended. He said precautions would be taken during the Covid-19 pandemic to minimise “contact between the people who work and those who carry out these inspections.” He said an inspection of LNG terminal automation, electrical, and fire protection systems will be carried out and maintenance to the gas line and mooring equipment. Mr Šilenskis added that any maintenance work requiring external contractors would be scheduled for H2 2020.