* LNG import vessel could be in place by end-2017
* LNG imports would give Australia gas buyers more choice
* Economics make sense at current spot LNG prices
By Sonali Paul
MELBOURNE, March 20 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
"(Australia's) at the top of the oportunity list on our
side," Hoegh LNG Chief Executive Sveinung Støhle told Reuters in
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 fertiliser, 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.
Hoegh LNG, along with fellow Norwegian company Golar LNG Ltd
, is leading the construction of FSRUs, which have
become attractive to gas importers from Colombia to Indonesia,
as they are quicker and cheaper to build than terminals onshore.
Hoegh covers the cost of building an FSRU and the customer
leases the vessel and pays the operating costs.
Støhle sees Australia as the best potential destination for
FSRUs that Hoegh has coming out of shipyards in April and early
next year, in light of warnings that the eastern half of the
country could face gas shortages within the next two years.
If spot LNG prices stay around $6.50 per mmBTU, plus freight
of around 50 cents/mmBTU, regasification cost with an FSRU of
around 40 cents/mmBTU and crude prices around $50 a barrel,
imported LNG could compete with domestic gas, Støhle estimated.
That is roughly in line with a recent estimate by
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
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 said.
(Reporting by Sonali Paul; Editing by Richard Pullin)