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Höegh LNG Holdings scraps FSRU deal with H-Energy for Jaigarh LNG terminal

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MUMBAI : India’s first Floating Storage and Regasification Unit (FSRU)-based LNG regasification terminal developed by a unit of Hiranandani Group at Jaigarh port in Maharashtra is in trouble after the FSRU’s owner terminated the deal citing default of contractual terms.

“Höegh LNG terminated ‘Höegh Giant’s’ FSRU contract in India following the charterer’s default of the contractual terms,” Höegh LNG Holdings Ltd said while announcing the quarterly results on Wednesday.

“The charterer is disputing Höegh LNG’s entitlement to terminate but it accepts that the FSRU contract is at an end. Höegh LNG is confident of its contractual right to terminate, and it has commenced arbitration proceedings against the charterer to confirm the legitimacy of its actions and seek damages,” Höegh LNG Holdings said.

H Energy through its wholly owned subsidiary Western Concessions Pvt Ltd (H-Energy), has hired the FSRU from Höegh LNG Holdings for 10-years.

The 2017 built ‘Höegh Giant’ has a storage capacity of 1,70,000 cubic metres and has a peak regasification capacity of about 6 million tonnes (mt) a year.

The FSRU was planned to deliver regasified LNG to the 56 km Jaigarh-Dabhol pipeline connecting to the National Gas Grid and deliver LNG onshore for LNG truck loading facilities. The FSRU is also capable of reloading LNG onto other LNG vessels for providing bunkering services.

The country’s first FSRU-based LNG regasification terminal was expected to boost India’s RLNG terminal capacity to 51 million tonnes (mt) from 45 mt, as the government looks to raise the share of gas in the fuel basket to 15 per cent from six per cent.

H-Energy invested about Rs3,000 crore to develop the RLNG terminal at Jaigarh port built by JSW Infrastructure Ltd.

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