Hoegh LNG and CB&I Lummus conclude strategic partnership for LNG FPSO

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

29 Feb 2008

Hoegh LNG and CB&I Lummus yesterday announced that they have concluded a strategic and exclusive agreement for the next phase of Hoegh LNG's FPSO project (Floating Production Storage and Offloading). The agreement formally ties the parties for a period of 2 years, where Höegh LNG will have exclusive rights to CB&I Lummus' patented "Niche LNG" liquefaction technology for its LNG FPSO projects. CB&I Lummus will provide the Front End Engineering and Design (FEED), for the topsides, i.e. liquefaction and gas processing for the project.In September 2007 Hoegh LNG announced that it started the engineering and design for its first LNG FPSO Unit (Floating Production Storage and Offloading), with the objective to design and construct the worlds' first LNG FPSO."Our strategy is to develop Hoegh LNG's business model from pure LNG transportation into offering also solutions for LNG production and floating regasification terminals", says Sveinung Støhle, President and CEO of Höegh LNG AS. "With the LNG FPSO in place, Hoegh LNG can offer a complete offshore LNG supply chain" "We recognized from the start that building an LNG FPSO is a very complex and challenging project, quite different from LNG carriers or even LNG re-gas vessels, and therefore choosing the right partners and the right technology are critical success factors," says Sveinung J. Stohle, President of Hoegh LNG Ltd. "In initiating this partnership with CB&I we have laid the fundament for completing the most critical part of our LNG FPSO project, and this is of course a confirmation that we are very happy with the work done by CB&I for the pre-FEED which we started almost 6 months ago and which will be concluded in a few weeks. This agreement further confirms our ambition to not build only one of these units, but a whole series." The Hoegh LNG FPSO design consists of a ship shaped offshore classed structure based on an existing LNG ship specification, with the capacity to treat and liquefy a well stream of approx 3.0  billion cubic meters pr. year, which will give an annual production of between 1.6-2-0 million tons of LNG and approx 0.4 million tons of LPG, depending on the specification of the gas stream. The LNG FPSO will have storage capacity of around 180 000 cubic meters of LNG and 30 000 cubic meters of LPG, and the first delivery is stipulated for mid 2011."The Pre-FEED is going according to plan, and will be completed by mid March, upon which we will get an approval in principle from our classification society for this design. In parallel we are in negotiations with shipyards for the construction plans, as well as upstream gas owners and established LNG buyers to guarantee the off-take from the FPSO. We expect to sign agreements in principle with several of these clients for the use of our LNG FPSO in the near future. I am fully convinced that we have the right solutions that the LNG industry is looking for in this new market segment," says Stohle"We are excited that Höegh LNG recognizes the benefits our Niche LNG technology offers for this first-of-a-kind LNG FPSO" says Jos Leo, Director Floating LNG of CB&I. "We believe that our evolved Niche NLG technology will have an excellent fit with Höegh LNG's ship shaped offshore classed structure.  The inherent safety of the process coupled with its small topsides footprint make it an ideal selection for this application. This is further enhanced by the high efficiency of the Niche LNG technology."Hoegh LNG is a pioneer in the LNG shipping industry owning and operating a fleet of five conventional LNG tankers. The company has two Shuttle- and re-gasification vessels (SRV) under construction at Samsung for the  Neptune project offshore Boston owned by Suez NA. Höegh LNG further has under development two deepwater port terminals, one in the US offshore Florida (Port Dolphin) and one offshore western UK (Port Meridian) and is actively pursuing other floating LNG projects around the world.CB&I Lummus is an operating unit of CB&I, a leading EPC Contractor delivering comprehensive solutions in the energy and natural resource industry. With more than 70 proprietary licensed technologies and 1,500 patents and patent applications CB&I is uniquely positioned  to take projects from conceptual design, through technology licensing, engineering and construction and final commissioning. CB&I are presently engaged with the construction and delivery of seven onshore LNG terminals and two onshore liquefaction plants. Moreover CB&I is an innovative pioneer in LNG FPSO developments.  The company's vast offshore track record coupled to technology know-how and EPC experience results in CB&I's unique capabilities to successfully develop LNG FPSO projects.