MOL, Vopak reach agreement to jointly own and operate the FSRU for new LNG terminal

Mitsui O.S.K. Lines Ltd. (MOL) and Vopak announce an agreement has been reached, whereby Vopak will acquire 49.99% of the shares in the vessel owning company of MOL FSRU Challenger, whose name will be changed to Bauhinia Spirit. This new JV company between MOL and Vopak in Hong Kong will own the world’s largest floating storage and regasification unit (FSRU) and have a long-term contract with Hong Kong LNG Terminal Limited. The FSRU has a storage and regasification capacity of 263,000 m³ and 800 MMsft³d, respectively. Under the contract, the joint venture will provide the FSRU as well as jetty operations & maintenance and port services.  

The offshore jetty platform for the mooring of the FSRU and LNG carriers are owned by Hong Kong LNG Terminal Limited. The terminal is currently under construction and is expected to be operational around mid 2022. The terminal will be located offshore about 25 km southwest of Hong Kong Island. The terminal will provide natural gas feedstock to the customer’s dedicated power plants. It is being developed to support the Hong Kong Special Administrative Region government’s target to improve air quality and environmental conditions by increasing the percentage of power generation by natural gas. 

Both MOL and Vopak are excited to contribute to the success of Hong Kong's first ever LNG import terminal based on the companies’ complementary strengths, combining their experiences related to the LNG industry including FSRU, and offshore jetty platform operations & maintenance respectively. Being the global market leaders in their respective fields, MOL is involved in over 100 LNG carrier and FSRU projects with Vopak having a portfolio of four LNG terminals in operation and more than 300 jetties across its global terminal network.

“An ideal complementary relationship works by combining Vopak’s many years of experience as a terminal operator for oils, chemicals and liquefied gas with MOL’s know-how of LNG carrier and FSRU operation. MOL looks forward to further working with Vopak on this promising project and feels confident that with our joint forces, we will be able to establish a safe and reliable operation structure for the Hong Kong FSRU project,” said Takeshi Hashimoto, President & CEO of MOL.

Eelco Hoekstra, Chairman of the Executive Board & CEO of Royal Vopak, said “We very much look forward to further strengthening our partnership with MOL and to actively contribute together to the energy transition policy of the government in Hong Kong. This cooperation gives Vopak an excellent entry in the growing LNG market in Hong Kong and fits our ambition to diversify our service offering in LNG by investing in FSRUs.”

This agreement follows MOL’s earlier announcement whereby MOL has entered into a long-term contract with the customer and an agreement with Vopak for jetty support. The transaction is subject to customary conditions, including closing, refinancing and obtaining (regulatory) approvals, with the expected completion after the commissioning of the terminal around mid 2022.

Based on these joint initiatives, MOL and Vopak also aim to explore further downstream opportunities for bunkering of LNG as a cleaner marine fuel in Hong Kong, which is one of the major bunkering ports of fuel oils for marine transportation. MOL has a plan to operate approximately 90 LNG-fueled vessels by 2030, which is a part of MOL Group Environmental Vision 2.1, aiming for net zero GHG emission by 2050.

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