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Hoegh sees Australia as top target market

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Reuters are reporting that Norway's Hoegh LNG Holdings is targeting Australia as the next destination for its LNG import ships, aiming to fill a looming supply gap that has sent prices soaring.

Hoegh has begun talking to Australia's energy companies and also sees big gas users as potential customers, with floating regasification and storage units (FSRUs) providing access to the world market.

Australia is about to become the world's top exporter of LNG, but faces a gas shortage at home as producers have focused on supplying gas to plants offshore that have locked in 20-year export contracts.

Buyers could take advantage of a global glut of LNG to break the grip of Australia's big gas producers, who have more than doubled contract prices to big gas customers.

Hoegh LNG, along with fellow Norwegian company Golar LNG Ltd, is leading the construction of FSRUs, which have become attractive to gas importers from Colombia to Indonesia, as they are quicker and cheaper to build than terminals onshore.

Hoegh covers the cost of building an FSRU and the customer leases the vessel and pays the operating costs.

Hoegh sees Australia as the best potential destination for FSRUs that Hoegh has coming out of shipyards in April and early next year, in light of warnings that the eastern half of the country could face gas shortages within the next two years.

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