Höegh LNG, Stolt-Nielsen and Golar LNG have made a commitment to invest a total of $182m in Avenir LNG, which was established by Stolt-Nielsen last year to cater to the liquefied natural gas (LNG) market and develop small-scale LNG bunkering capabilities.
Of the total investment, $24.75m will be provided by Höegh LNG.
The investment, which will be made in the form of cash and equity-in-kind, will be used to build six small-scale LNG carriers, a small-scale storage terminal and regasification facilities.
The carriers are expected to be used to source and ship LNG to terminals, while the regasification facilities will be used to distribute LNG in trucks into local network grids.
As part of the agreement, Golar LNG and Höegh LNG will each hold a 25% share in Avenir LNG, while Stolt-Nielsen will remain the largest shareholder of Avenir LNG with a 50% stake.
The joint investment is set to enable Stolt-Nielsen to consolidate its entire LNG activities into Avenir.
Stolt-Nielsen’s current LNG activities comprise four LNG newbuildings on order at Keppel Singmarine in Nantong, China, as well as an upcoming joint-venture LNG terminal and distribution facility to be built in the Oristano port in Sardinia, Italy.
Stolt-Nielsen CEO Niels Stolt-Nielsen said: “The combination of Stolt-Nielsen’s logistics capabilities and our partners’ experience in LNG carriers, FSRUs and FLNGs positions Avenir as an emerging leader in small-scale LNG logistics for the power, bunkering, trucking and industrials markets.
“With the implementation of the IMO’s 2020 emissions regulations approaching, demand for LNG as a cleaner, low-sulphur marine fuel is increasing.
“Each of the LNG newbuildings is designed to perform safe and efficient ship-to-ship LNG bunkering, which Avenir LNG plans to introduce at key strategic ports.”
Avenir also plans to raise an additional $10m through strategic investors and intends to order two additional small-scale LNG carriers.