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Hoegh LNG Partners could spend up to $۴۰۰ million for ۵th FSRU
TIN news: Hoegh LNG Partners LP (HMLP.N), controlled by Norway’s Hoegh LNG Holdings Ltd, is considering spending $300 million-$400 million to buy a floating, storage and regasification unit, a vessel that converts LNG back to natural gas.
Hoegh LNG Partners will partly fund the acquisition through an equity offering, Chief Executive Richard Tyrrell told Reuters without disclosing details of the offering.
The company, which was spun off from Hoegh LNG Holdings in 2014, has a fleet of four FSRUs.
It will buy the fifth through a transfer of assets from its parent in a transaction that is common among oil and gas pipeline and storage companies known as a “dropdown”.
A glut of liquid natural gas is generating more work for FSRUs, particularly in emerging markets, where there is a paucity of land-based import infrastructure.
Moreover, since long-term LNG contracts outside the United States are directly linked to crude oil prices, the fall in prices has boosted LNG demand from utilities in these markets.
“Our clients, utilities, are benefiting from cheap LNG and they are stronger as a result,” Tyrrell said. “So we are benefiting from the low oil price and in that sense may be one of the few companies in the energy space to benefit.”
Hoegh LNG Partners has long-term contracts for its four FSRUs. The company, which is structured like a master limited partnership, raised its dividend by 22 percent in January.
Up to Monday’s close, Hoegh LNG Partners’ shares had risen about 28 percent over the past 12 months.
Hoegh LNG Partners will partly fund the acquisition through an equity offering, Chief Executive Richard Tyrrell told Reuters without disclosing details of the offering.
The company, which was spun off from Hoegh LNG Holdings in 2014, has a fleet of four FSRUs.
It will buy the fifth through a transfer of assets from its parent in a transaction that is common among oil and gas pipeline and storage companies known as a “dropdown”.
A glut of liquid natural gas is generating more work for FSRUs, particularly in emerging markets, where there is a paucity of land-based import infrastructure.
Moreover, since long-term LNG contracts outside the United States are directly linked to crude oil prices, the fall in prices has boosted LNG demand from utilities in these markets.
“Our clients, utilities, are benefiting from cheap LNG and they are stronger as a result,” Tyrrell said. “So we are benefiting from the low oil price and in that sense may be one of the few companies in the energy space to benefit.”
Hoegh LNG Partners has long-term contracts for its four FSRUs. The company, which is structured like a master limited partnership, raised its dividend by 22 percent in January.
Up to Monday’s close, Hoegh LNG Partners’ shares had risen about 28 percent over the past 12 months.