LNG floating storage and regasification units in demand in India
Hoegh to supply H-Energy with FSRU while Hyundai Heavy builds facility for Swan Energy
25 Nov 2020 | 

With its imports of liquified natural gas continuing to grow, India is becoming an increasingly important market for providers of floating storage and regasification units (FSRUs). On November 19 Hoegh LNG signed an agreement  to supply H-Energy with an FSRU for its new LNG import terminal in Jaigarh, Maharashtra.

And Hyundai Heavy Industries of South Korea recently completed work on an FSRU for a new LNG terminal being developed by Swan Energy in Jafrabad, Gujarat.  

Under its agreement with H-Energy, Hoegh LNG will allocate one of its FSRUs currently trading in the LNG carrier market for the project. It will be deployed as early as the first quarter of 2021. The FSRU agreement will be for 10 years, with annual termination options after year five. H-Energy is currently developing LNG regasification terminals and cross-country pipelines along the western and eastern coasts of India.

“The construction of H-Energy’s LNG import project is near to completion, positioning it as a timely gateway to one of the world’s highest growing LNG markets,” says Hoegh president and chief executive officer Sveinung Stohle. “The terminal will be the first of what we believe could be multiple FSRU-based terminals in India."

Norwegian company Hoegh LNG Holdings is a provider of specialized vessels for importing liquefied natural gas.

The Jaigarh Port LNG project is to be implemented in two phases. Phase I consists of a jetty-based FSRU provided by Hoegh, which can handle 4 million tonnes per year. In Phase II, a land-based LNG terminal with an ultimate capacity of 8 million tonnes per annum will be started following the successful completion and stabilization of Phase I. The LNG terminal in Jaigarh will connect to the national gas grid in Dabhol through a 60-kilometre pipeline.

In early 2018, H-Energy's trading office in Dubai signed a sale and purchase agreement with Malaysia's Petronas for the delivery of LNG to the Jaigarh terminal. This was the first term LNG contract signed by Petronas LNG Ltd. (PLL) in India.

H-Energy is building the 635km Jaigarh-Mangalore natural gas pipeline project on the western coast of India for which it has received authorization from the Petroleum and Natural Gas Regulatory Board. The pipeline will connect to the demand centres in the coastal towns and cities of Ratnagiri, Sindhudurg, Goa, Karwar, Udupi and Mangalore.

Meanwhile, the FSRU built by Hyundai Heavy Industries for Swan Energy will be at the centre of the 5 million tonnes per annum LNG import terminal in Jafrabad. The facility will feature a floating storage unit with connections for ship-to-ship transfer. The project is being developed under a public-private partnership with the Gujarat Maritime Board (GMB) and the government of Gujarat.

Swan Energy holds a 63% equity stake. The 26% stake of the government of Gujarat is held via GMB (15%) and Gujarat State Petronet (11%). The remaining 11% stake is held by FSRU Venture India One, a local subsidiary of Mitsui OSK Lines (MOL). MOL is the technical partner for the project, and supervised the construction of the FSRU.

The 180,000-m3 capacity Vasant 1 is the tenth FSRU to be built by Hyundai Heavy, which delivered the world's first newbuilding LNG FSRU to Hoegh LNG in 2014.

The global market for FSRUs is growing fast. The floating LNG storage and regasification unit has the facilities to liquify LNG, store it, and later regasify it in order to supply the fuel to consumers. The construction period for an LNG FSRU is a year shorter than LNG storage and supply facilities on land and, therefore, its demand worldwide is rising fast in such areas as Central and South America and Southeast Asia where energy supply is lacking and there is a need for rapid installation of energy infrastructure.

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