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Höegh LNG takes steps to mitigate against market conditions
PROJECTS & COMPANIES
Höegh is a provider of floating storage and regasification units.
NORWAY-BASED, Bermuda-headquartered Höegh LNG Holdings announced this week that it was taking steps to preserve liquidity and reduce costs in the uncertain business environ- ment created by the coronavirus (COVID-19) pandemic.
The company has decided to suspend divi- dends until further notice, and has also paused its bonus scheme for executive management and onshore staff.
Höegh also said that it would roll out a cost-saving plan, which would focus on over- head and vessel operating costs. The company is targeting savings of $9-11mn in 2020, compared with its previous budget for this year. As well as eliminating bonuses and other costs, Höegh is deferring some costs, scheduled maintenance and projects until a later date. It said that around one third of the estimated impact relates to costs being postponed until 2021.
The company noted that it would continue to evaluate market conditions as they evolve, and
could implement future cost cuts and liquidity preservation measures if necessary.
“As reported on March 24, 2020, Höegh LNG’s operations and business development activities are running close to normal,” Höegh LNG’s president and CEO, Sveinung Støhle, said in an April 6 statement. “However, the COVID- 19 virus crisis is unprecedented in scale and uncertainty, and therefore the board and man- agement are taking steps to preserve both the liquidity and solidity of Höegh LNG through these challenging times.”
The company also noted that it had now exe- cuted and signed up to a new $80mn revolving credit facility, which was announced in mid-Jan- uary. Höegh has earmarked $65mn of this for repaying in full a bond loan that matures in June 2020. The remaining part of the facility will be used for general corporate purposes.
Höegh is a provider of floating storage and regasification units (FSRUs) and currently has 10 such units in its fleet.
Russia ups gas targets for 2035
PERFORMANCE
RUSSIA has raised its forecasts for national gas production in 2035, under a long-term strategy approved by the government last week.
Russia now expects to produce between 860bn cubic metres and 1tn cubic metres of gas by 2035, according to a copy of the strategy published by the energy ministry on April 1. It previously predicted an output of 850-924 bcm. The country lifted around 738 bcm of gas in 2019, up 1.7% year on year. Its target for 2024 is unchanged at 795-820 bcm.
LNG production is set to be a driving force behind this growth, rising from 29.5mn tonnes (40 bcm) in 2019 to 80-140mn tonnes (109-190 bcm) in 2035. The previous goal was 70-82mn tonnes. Much of this extra supply will come from the Yamal and Gydan peninsulas in the Russian Arctic, where Novatek plans to build several new export terminals.
Gazprom also has a number of new gas pro- jects on Yamal in the pipeline. The next two fields scheduled to start up are Kharasaveyskoye, which will come on stream in 2023 and flow 32 bcm per year, and Kamennomysskoye-more, anticipated to flow 14.5 bcm per year starting before 2025.
While European gas demand is anticipated
Much of Russia’s extra LNG supply will come from the Yamal and Gydan peninsulas in the Arctic.
to remain flat over the coming decades, Russia may be able to expand its market share as a result of declining indigenous production. Gazprom is also targeting increased sales to the Chinese market.
The company aims to break ground this sum- mer on the Power of Siberia gas pipeline’s section in the Irkutsk region, the Irkutsk government announced on April 3.
Gazprom started flowing gas via the 38 bcm per year Power of Siberia to China in Decem- ber. The pipeline currently carries gas from the Chayandinskoye in Yakutia, due to ramp up its output to 25 bcm per year by the early 2020s. Extending the pipeline into the Irkutsk region will enable it to flow gas from the Kovyktinskoye field as well.
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