Höegh LNG Partners LP Announces a New Long-Term FSRU Contract for the Höegh Gallant
Höegh LNG Partners LP (NYSE: HMLP) announced a 10-year charter agreement with a New Fortress Energy subsidiary for the Höegh Gallant to operate as an FSRU, beginning in Q4 2021. The new charter rate will be lower than the previous agreement; however, Höegh LNG will compensate HMLP for the difference until July 31, 2025. This contract aims to extend the Partnership's contract coverage, enhance its average charter length, and broaden its customer base. The new charter will service the Old Harbour facility in Jamaica, increasing operational efficiency.
- Secured a 10-year charter with New Fortress for the Höegh Gallant, enhancing contract coverage.
- Höegh LNG will compensate HMLP for the rate difference until July 2025, providing short-term financial support.
- Broadens customer base and improves operational reach with service to the Old Harbour facility in Jamaica.
- Charter rate under the new agreement is lower than the existing charter, potentially reducing revenue.
HAMILTON, Bermuda, Sept. 24, 2021 /PRNewswire/ -- Höegh LNG Partners LP (the "Partnership") (NYSE: HMLP) today announced that it has entered into an agreement with a subsidiary of New Fortress Energy Inc ("New Fortress") to charter the Höegh Gallant for FSRU operations for a period of ten years, with a planned commencement during the fourth quarter of 2021 (the "New Charter").
The Partnership has further entered into an agreement to suspend the existing charter for the Höegh Gallant with a subsidiary of Höegh LNG Holdings Ltd. ("Höegh LNG"), with effect from the commencement of the New Charter (the "Suspension Agreement"). The charter rate under the New Charter, in line with the current market, will be lower than under the existing charter for the Höegh Gallant. However, under the Suspension Agreement, Höegh LNG's subsidiary shall compensate the Partnership monthly for the difference between the charter rate earned under the New Charter and the charter rate earned under the existing charter with the addition of a modest increase until July 31, 2025, the expiry date of the existing charter. After that, the Partnership will earn the charter rate agreed with New Fortress for the remaining term of the New Charter. In addition, pursuant to the Suspension Agreement, certain capital expenditures incurred to ready and relocate the Höegh Gallant for performance under the New Charter will be shared 50/50 between Höegh LNG and the Partnership, subject to a maximum obligation of the Partnership.
The Board of Directors of the Partnership and the Conflicts Committees (the "Conflicts Committee") have approved the New Charter and the Suspension Agreement. The Conflicts Committee retained an outside financial advisor and outside legal advisors to assist with its evaluation of the agreements.
Sveinung Støhle, Chief Executive Officer, stated: "The new long-term FSRU contract entered into with New Fortress is an important development for the Partnership as it extends the Partnership's contract coverage and average charter length and broadens our customer base and global footprint. The Höegh Gallant will serve the Old Harbour facility in Jamaica, where its size and performance will enable New Fortress to further optimize its already highly successful operation."
Forward-Looking Statements
This press release includes statements that may constitute forward-looking statements, including, without limitation, the commencement date of the New Charter, the payment by Höegh LNG of amounts owed under the Suspension Agreement and the anticipated benefits to the Partnership of, and performance of the Höegh Gallant under, the New Charter. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management's control. Factors that can affect future results are discussed in the Partnership's Annual Report on Form 20-F for the year ended December 31, 2020 filed by the Partnership with the U.S. Securities and Exchange Commission ("SEC") and the other reports the Partnership files with the SEC. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.
Contact:
The IGB Group, Bryan Degnan, +1 (646) 673-9701 / Leon Berman, +1 (212) 477-8438
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SOURCE Hoegh LNG Partners LP
FAQ
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