LONDON - Egypt is to give up one of its two floating liquefied natural gas (LNG) terminals as it winds down imports of the super-chilled fuel, agreeing to pay a fee to Norway's Hoegh LNG for ending the charter early.
Hoegh said on Monday Egypt Natural Gas Holding (EGAS) has agreed to pay the difference between its contract for the terminal, called a floating storage and regasification unit (FSRU), and a new contract with a third party.
Egypt began importing LNG in 2015 when its own diminishing gas output failed to keep up with soaring domestic demand. It hired the Hoegh Gallant from Hoegh LNG and the BW Singapore from the BW Group in 2015, with both deals due to run until 2020.
But the FSRUs were always meant to be a stop-gap solution while major gas discoveries were developed, including the giant Zohr field, which began production last December. Egypt said last month it would no longer import LNG.
Both the Hoegh Gallant and BW Singapore remain moored close to each other at the Ain Sukhna port in the Gulf of Suez, according to Refinitiv Eikon data. Hoegh said the Hoegh Gallant will begin operating as a normal LNG carrier.
"The amended contract is expected to become effective in October 2018 and will run to April 2020, the termination date of the original five-year FSRU contract," Hoegh LNG said.
(Reporting by Sabina Zawadzki; Editing by Jan Harvey) ((firstname.lastname@example.org; +44 207 542 4051;))