The Penco-Lirquén LNG import terminal and the accompanying onshore gas-fired power plant in Chile will likely be delayed due to issues with the project’s environmental approval, Sveinung Støhle, head of Höegh LNG said on Tuesday.
The Norwegian LNG company is providing a floating storage and regasification (FSRU) for the LNG import project, that is to receive the chilled fuel from Cheniere’s Corpus Christy project in Texas.
Höegh LNG was informed by the developer Penco LNG early in February 2017 that “they’ve had an issue with a part of the environmental process for the infrastructure – the jetty and the pipe,” Støhle said during a conference call on Höegh LNG’s fourth-quarter results.
“This is likely to lead to a certain delay,” Støhle said.
The proposed LNG import terminal to be located in Concepción Bay will be Chile’s third.
Höegh LNG signed a 20-year deal in May 2015 with Octopus LNG, now known as the Penco Lirquén LNG terminal, to provide the FSRU for the project.
The contract will be serviced by the company’s eight FSRU currently under construction at South Korea’s Hyundai Heavy Industries.
However, in the case of a delay in Chile, the FSRU would be reallocated to a different project.
“We have the flexibility to move FSRU 8 to one of the projects which has a start-up in 2018,” Støhle said.
The FSRU would be reallocated either for a “project that we already have a long-term contract for, or to a project which we are currently in a tender for and has a start-up in 2018.”
“As a matter of fact, I can mention that we are currently in round two of a tender that has a start-up in 2018,” the CEO said.
“Now, for Penco off course this delay is unfortunate but we’ve had discussions with shareholders of Penco and is clear to us that this project will be realized,” he added.
The Penco-Lirquén project is being developed by the Chilean company Biobiogenera in association with France’s EDF and US LNG export player Cheniere.
The project is expected to start importing 600,000 mt/year of US LNG in 2019 under a long-term deal with Cheniere.
LNG World News Staff