Höegh LNG has signed a deal with Octopus LNG for the Penco-Lirquén import terminal located in Concepción Bay in Chile.

The contract is for a period of 20 years and is expected to generate an average annual EBITDA of around $36m.

The contract is also subject to Octopus completing financing and obtaining necessary environmental approvals – with the planned start-up is in the second quarter 2018.

Octopus LNG will service the contract with an FSRU from its newbuilding program currently in progress. The FSRU will be offered to Höegh LNG Partners LP in due course.

Höegh LNG’s President and Chief Executive Officer, Sveinung J. S. Støhle, commented, “We are delighted to have been awarded the contract with Octopus for their new LNG import terminal in Chile, and look forward to completing the project together with our client.”

“Our modern FSRU solutions offer our client the most cost efficient way of importing LNG to meet an increasing demand for natural gas used in power production in Chile. With this contract we have full contract coverage for our FSRU fleet and are therefore contemplating the next step in our FSRU expansion program.”

Octopus’ General Manager, Alfonso Ardizzoni, added, “We appreciate Höegh LNG’s FSRU expertise, which allowed us to present a competitive and successful bid in the recent public tender process ran by the Comisión Nacional de Energía for the supply of electricity to distribution companies in the Sistema Interconectado Central, the Chilean main electric grid.”

“Höegh LNG’s technology is a key service component of the natural gas delivery chain that will enable the construction of our El Campesino Power Plant as well as supplying the growing demand of natural gas in the Bio Bio region.”

“We expect the LNG import terminal to substantially increase the reliability and competitiveness of the power generation and natural gas markets in Chile and are looking forward to a long term relationship with Höegh LNG.”