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Norway’s Hoegh LNG Holdings targeting Australia as next destination for LNG

Norway’s Hoegh LNG Holdings targeting Australia as next destination for LNG

OSLO: Norway’s Hoegh LNG Holdings is targeting Australia as the next destination for its liquefied natural gas (LNG) import ships, its chief executive said on Monday, aiming to fill a looming supply gap that has sent prices soaring.

Hoegh has just started talking to Australia’s energy retailers and also sees big gas users as potential customers, with floating regasification and storage units (FSRUs) giving them access to the world market.

Australia is about to become the world’s top exporter of LNG, but faces a gas shortage at home as producers have focused on supplying gas to plants offshore that have locked in 20-year export contracts.

“(Australia’s) at the top of the opportunity list on our side,” Hoegh LNG Chief Executive Sveinung Støhle said.

Buyers could take advantage of a global glut of LNG to break the grip of Australia’s big gas producers, who have more than doubled contract prices to big gas customers, like power producers and fertilizer, bricks and packaging manufacturers.

“If they’re not happy with the price they’re paying in Australia, well then they can buy LNG in the market. It gives you commercial flexibility,” Støhle said.

Australia’s top power producer and no.2 energy retailer, AGL Energy, is considering building an LNG import terminal, but has said the earliest it may start importing LNG would be in 2021.

In contrast, Hoegh could have an FSRU in place within six months of signing a contract, as it did in Egypt in 2015, assuming port space, a jetty and infrastructure to hook into gas pipelines were available, Støhle added.