Hoegh LNG pens deal with PGN over Belawan FSRU

H?egh LNG Holdings Ltd of Norway said it has entered into binding Heads of Agreement (HoA) with state gas distributor PT Perusahaan Gas Negara Tbk (PGN) for the provision of a floating storage and regasification unit (FSRU) offshore Belawan, near the city of Medan in North Sumatera.

?The HoA is based on the use of H?egh LNG's first FSRU newbuilding due for delivery at the end of 2013 and under construction at Hyundai Heavy Industries in Korea,? it said.

The company, however, did not disclose the value of the project.

The HoA is further based on a 20 year charter party agreement, which is the first agreement of this length in the FSRU market. The charter party and associated project agreements are under completion by the parties, the company said.

The FSRU for the Medan project will be financed on a project basis and H?egh LNG has appointed Standard Chartered Bank and Bank of Tokyo-Mitsubishi as financial advisors for the project financing.

"We are satisfied to have reached this important milestone in our negotiations with Perusahaan Gas Negara for a long-term contract for our first FSRU newbuilding. This confirms our strategy to focus on floating regasification terminals and underpins the competitive position of our newbuilding program at Hyundai Heavy Industries," Resident and Chief Executive Officer, Sveinung St?hle, said.

The Belawan FSRU will be Indonesia?s second. The first one is the FSRU unit at the Jakarta bay, which is scheduled to commence operation in March next year. (roffie/romel)