Japan's MOL, Vopak enter joint venture for Hong Kong LNG terminal's FSRU

Japan's shipping conglomerate Mitsui OSK Lines and petroleum storage infrastructure company Royal Vopak have agreed to form a joint venture in Hong Kong to own and operate a floating storage and regasification unit, or FSRU, for the Hong Kong LNG terminal, the companies said in statements Dec. 16.

Under the agreement, Rotterdam-based 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, and enter a long-term contract with Hong Kong LNG Terminal Ltd that includes jetty operations and maintenance and port services.

This will be the world's largest FSRU with a storage and regasification capacity of 263,000 cu meters and 800 million cu feet/day, respectively, according to the companies, and also be Hong Kong's first-ever LNG import terminal. The Bauhinia Spirit is 345 m long, 55 m wide and was delivered in 2017.

The offshore jetty platform for the mooring of the FSRU and LNG carriers are owned by Hong Kong LNG Terminal Ltd, and the terminal itself is currently under construction and is expected to be operational around mid 2022, the companies said.

The terminal, located offshore about 25 km southwest of Hong Kong Island, will supply natural gas to dedicated power plants and help the government improve air quality while increasing the share of gas in power generation.

"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," Eelco Hoekstra, Chairman of the Executive Board & CEO of Royal Vopak, said.

MOL said it is involved in over 100 LNG carrier and FSRU projects, and Vopak has 4 LNG terminals in operation and over 300 jetties in its terminal network. The two companies are also seeking downstream opportunities for LNG bunkering in Hong Kong, one of the largest bunkering ports in the region.

MOL has a plan to operate around 90 LNG-fueled vessels by 2030, as a part of MOL Group's 2050 net zero greenhouse gas emissions plan.

Hong Kong LNG Terminal is a joint venture between the utilities Castle Peak Power Co (CAPCO) and The Hongkong Electric Co Ltd. CAPCO is a joint venture between CLP Power Hong Kong and China Southern Power Grid International (HK).