It may be delayed until 2015
The commercial startup of Britain’s first floating liquefied natural gas (LNG) import terminal may be delayed until 2015 from 2014 owing to regulatory hold-ups, Norwegian developer Hoegh LNG said on Monday.
A final investment decision (FID) on the 3-6 billion cubic meter/year deepwater Port Meridian import terminal has been pushed back one year to the end of 2012, Hoegh LNG’s Chief Executive Officer Sveinung Støhle told Reuters.
Delays to FID could delay start-up of the facility to 2015, Stohle said, although the company might be able to deploy one of its two floating storage and regasification units (FSRUs) now under construction for the project.
Two FSRUs under construction are due for delivery in 2013 and 2014 from South Korean shipbuilder Hyundai Heavy Industries.
“We have all the approvals, now we are focussing on getting customers on board in the next 6-12 months,” Stohle said, referring to the UK project.
Falling production from ageing North Sea gas fields suggests UK import needs will continue increasing in the coming years, enticing investors to bankroll new terminals like Port Meridian, he said.
About 50 percent of the terminal’s capacity will be sold on a medium-term basis, meaning between 3-5 years, while the majority of discussions are taking place with new market entrants eager to secure a foothold in physical trading.
Delays to start-up are not related to a pronounced slump in LNG trade in Europe, Stohle said.
Japan’s shift away from nuclear power and towards gas since March has led a revival in appetite for LNG in Asia and created supply shortages in Europe.
Stohle said short-term fundamentals have not affected the long-term investment case for Port Meridian.
LNG accounts for roughly 29 percent of total UK supply, up from 17 percent in 2010, while domestic production has dropped from 49 percent last year to 41 percent in the year to date.
Britain has four operational import terminals, including the main Dragon and South Hook facilities in Milford Haven in Wales, Isle of Grain in Kent, and a smaller facility in Teesside.