Norway’s Hoegh LNG believes China will install several more floating storage and regasification units along its coastline as the country’s LNG imports grow.
Company president and chief executive Sveinung Stohle said: “I have a very strong view that there will be a need for more import capacity in China and that will be covered in part by FSRUs.”
He added that FSRUs are a likely import solution for China since port areas are short of space for land-based facilities.
Stohle, who was talking to TradeWinds at last week’s LNG2019 meeting in Shanghai, spoke about the company’s regasification unit Hoegh Esperanza (built 2018), which is currently China’s only serving FSRU.
The vessel arrived in Tianjin in northern China in early November.
The 170,000-cbm unit, which has capacity to ship in around six million tonnes per annum of LNG, has been chartered by CNOOC Gas & Power Trading & Marketing from June on a three-year time charter with the option to extend the hire by one year.
Under the contract, Hoegh is guaranteed a minimum number of FSRU days, paid at a higher rate, with the balance charged at a lower LNG carrier rate.
“I look at it as a strategic deal to get a real presence in the Chinese market,” Stohle said. “This is the first and there will be more. Maybe we will have more contracts with CNOOC.”
The Chinese giant currently imports around half of the country’s LNG volumes, which stacked up at 54 million tonnes in 2018.
Stohle said Hoegh has also seen FSRU interest from other major importers and capacity holders in China. “It’s a huge market,” he said.
Hoegh, which was most recently selected to provide FSRUs for two import projects in Australia, is currently sitting on two units that are at present trading as LNG carriers and not working as regasification vessels. The company also has one open FSRU newbuilding, which is due for delivery in June.
Stohle said the company is bidding for two to three more FSRU projects in Asia but outside China.
“What we see now is there has been a turning point and the demand for new import facilities is definitely up,” he said.