Höegh LNG said today that it has signed a firm and final agreement with PT Perusahaan Gas Negara (PGN) to provide PGN with an FSRU and mooring system offshore Belawan, near the city of Medan, in North Sumatra, Indonesia.

The project will employ the first of Höegh LNG’s new building FSRUs under construction at Hyundai Heavy Industries Ltd in Korea. The agreement is a firm 20 year charter party with two five year options to extend for a total period of 30 years.

This is the first agreement of this duration in the FSRU market. The FSRU for the Medan project will be financed on a project basis and Höegh LNG has appointed Standard Chartered Bank and Bank of Tokyo-Mitsubishi as structuring banks for the project financing.

The EBITDA contribution is approximately USD 40 million per year for the first 20 years and approximately USD 60 million per year for the extension periods, totalling approximately USD 1.4 billion including the extension periods. The target start-up date is in September 2013.

President and Chief Executive Officer, Sveinung Støhle, says:

“The agreement with PGN to provide the North Sumatra FSRU is a great achievement for Höegh LNG and it confirms that we are in the forefront of the emerging and solid market for FSRUs in Asia. This further underpins our strong competitive position through our new building programme at Hyundai Heavy Industries. Currently we have bids in for several similar projects globally and are in the process to submit bids for a number of further opportunities. We expect that the FSRU market will continue its strong growth also in the future. We are very pleased to be working with PGN to provide the first purpose built FSRU in Indonesia and in Asia. This will be an important infrastructure development for Indonesia, and we already looking at similar opportunities for expanding our business in the country.”