Höegh LNG Partners LP (HMLP) has announced that has agreed to buy the entity that owns Höegh Gallant, the floating storage and regasification unit (FSRU), for US$370 million from Höegh LNG Holdings Ltd (HLNG). The agreement is subject to post-closing purchase price adjustments, and is expected to be completed by September 2015.
The debt currently related to the vessel is approximately US$183 million, and this will continue to be outstanding. The purchase price is to be settled by the cancellation of a US$140 million demand note from HLNG and the insurance of a seller’s credit of US$47 million in 18 months time, with an interest rate of 8% per year.
Höegh Gallant is operating under a charter with the government-owned Egyptian Natural Gas Holding Company (EGAS) that expires in April 2020. Additionally, HMLP has the right to cause HLNG to charter the vessel from the expiry of the EGAS charter until July 2025 at a rate equal to 90% of the rate payable pursuant to the current charter.
Sveinung J.S. Støhle, President and CEO of Höegh LNG, said: “We are delighted to have reached an agreement with HMLP for the first drop down into the MLP. Höegh LNG has a strong pipeline of drop down candidates, making HMLP a robust vehicle for funding our FSRU expansion already under way, and where we continue to see very strong market growth in the coming years.”
HMLP has estimated that the purchase of the vessel will generate annual contracted revenues, net of operating expenses and taxes, of approximately US$39 million to US$41 million with respects to the period of the charter with EgyptCo.
FSRU Independence update
HMLP and HLNG continue to await the consent of the charterer as to the proposed drop down of the FSRU Independence. No assurance can be given at this point regarding the timing of such consent or terms of such transaction.
Edited from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/floating-lng/13082015/hmlp-agrees-to-the-transfer-of-hoegh-gallant-1139/