Höegh LNG (HLNG) has been chosen as the preferred bidder for a new floating storage and regasification unit (FSRU) offshore Chile.

The Oslo-listed contractor said it will use the third of its new regasification vessels currently being built in Korea for the 10-year lease agreement, due to start in late 2014. The Chile project will consist of one of HLNG’s newbuild FSRU under construction at Hyundai Heavy Industries (HHI), and means the contractor has now secured contracts for all three of its newbuild FSRUs.

The unit will be located in Quintero Bay near Santiago, and will supply the client’s power plants in Chile with natural gas procured in the LNG market. Colbún and AES Gener are among the largest power producers in the country, and both have a fleet of gas-fired power plants in the Chilean market.

The 10-year contract has an option for an extension for a further five years. Start-up is scheduled for late 2014.
HLNG said the agreement is expected to generate an average annual EBITDA of approximately US $41 million.
Classification of the unit will be carried out by Det Norske Veritas. It will have an overall length of 290 m (951 ft), a breadth of 50 m (164 ft), storage volume of 170, 000 cu m and a regasification capacity of about 500 Mcf/d.