Hoegh LNG has entered into a binding agreement to supply a floating storage and regasification unit for H-Energy’s delayed Jaigarh liquefied natural gas import project on the west coast of India — a first of its kind for the South Asian nation.

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The Oslo-listed contractor said it would supply the FSRU as early as the first quarter of 2021 with the final agreement being for a 10-year term with annual termination options after year five.

Hoegh intends to allocate one of its available FSRUs currently trading in the LNG carrier market for H-Energy’s project south of Mumbai in Maharashtra state.

Phased implementation

H-Energy’s Jaigarh LNG import project is to be implemented in two phases. Phase one consists of a jetty-based FSRU with 4 million tonnes per annum capacity.

The FSRU has a storage capacity of 145,000 cubic metres and is capable of reloading LNG onto other vessels and providing bunkering services, according to H-Energy’s website.

The second phase envisages a land-based terminal with ultimate capacity of 8 million tpa, which would be implemented after the successful completion and stabilisation of phase one.

"The construction of H-Energy’s LNG import project is near to completion, positioning it as a timely gateway to one of the world’s highest growing LNG markets,” said Hoegh chief executive Sveinung Stohle.

“The terminal will be the first of what we believe could be multiple FSRU-based terminals in India."

Project slippage

H-Energy had earlier hoped to have its Jaigarh import scheme in operation back in 2018 but several factors have contributed to the schedule slipping — not least when heavy rains delayed construction of a 60-kilometre pipeline connecting the terminal at Jaigarh to the national gas grid at Dabhol.

Completion of this tie-in pipeline is now scheduled for the fourth quarter, according to the project’s operator.

H-Energy, the energy venture of India’s Hiranandani Group, was also constructing a 635-kilometre natural gas pipeline from Jaigarh to Mangalore.

This pipeline, which H-Energy will own and operate, will be connected to the demand centres in the coastal towns and cities of Ratnagiri, Sindhudurg, Goa, Kawar, Udupi and Mangalore.

Hoegh is one of three invited bidders for First Gen’s Batangas FSRU-based LNG import scheme in the Philippines, while it is shortlisted for an FSRU project in Latin America and is also bidding for another FSRU project on the Indian sub-continent.

Seeking long-term contracts

The contractor on Thursday said its “primary [long-term business] objective is to secure long-term FSRU contracts by the end of 2021 for all the units currently trading on short-term LNG carrier contracts” as the industry recovers from the fallout of the global coronavirus pandemic.

The main effect of the Covid-19 situation continues to be delays to scheduled crew changes and Hoegh said it is continuously working to ensure the welfare of its maritime personnel by making these delays as short and as few in number possible.

“While the group has been able to conduct full or partial crew changes on all the vessels in the fleet, the situation remains challenging for the maritime industry owing to travel restrictions and quarantine regulations.

“Nevertheless, all FSRUs and LNG carriers are fully operational and crewed in accordance with relevant safety requirements, all charter parties remain unchanged and in force, and revenues are being collected in accordance with contractual terms," Hoegh said.