AG&P, ADNOC L&S Agree on FSU Charter at Karaikal LNG terminal
- Business & Finance
Abu Dhabi National Oil Co (ADNOC) has through its shipping arm ADNOC L&S entered into a deal with Singapore-headquartered downstream gas and LNG logistics company Atlantic Gulf & Pacific (AG&P) for a floating storage unit.
Under the 15-year charter deal, ADNOC L&S will provide a 137,756 cbm Moss-type LNG tanker from its fleet of eight LNG ships that would be converted to an FSU. The vessel is intended for AG&P’s new LNG import facility in Karaikal Port in Puducherry, India.
The agreement covers the conversion, supply, operations, and maintenance of the floating storage unit.
Construction on the terminal is scheduled to start in Q1 2020 with commercial operations expected to commence before the end of 2021.
The companies said that the Karaikal FSU will be only the 4th FSU-based LNG import terminal in the world, after those in Malta, Malaysia, and Bahrain.
“This agreement with Atlantic Gulf & Pacific is significant for ADNOC Logistics & Services in a number of ways,” said Abdulkareem Al Masabi, CEO of ADNOC L&S.
“Firstly, it represents our first agreement with AG&P and one of our company’s most important goals is to find creative ways to branch out and find new partnerships around the world to fuel our company’s safer, smarter growth. It is also an important agreement because it provides AG&P with additional storage flexibility for their LNG terminal as well as giving us the chance to generate more value from one of our historical assets which is coming to the end of its current contract.”
Owned and operated by AG&P, the LNG import facility at the Karaikal Port is going to have an initial capacity of 1 million tonnes per annum (MTPA) which will be expanded to 3 MTPA in the medium term as demand increases.
The terminal will serve domestic, industrial and commercial customers within a 500km radius, including the heavily industrialized region of central Tamil Nadu, which has major manufacturing clusters for the fertilizer, cement, steel, textile, leather, sugar and garment industries. In addition, it will serve gas-fired power plants as well as AG&P’s own extensive city gas distribution network across South India.
“Both of our companies will work very closely to provide a comprehensive LNG solution for our downstream customers through the Karaikal LNG Facility. AG&P has focused on bringing down the unit cost of re-gasification terminals for smaller volumes. AG&P and ADNOC L&S are excited to reach this critical goal for our customers,” Karthik Sathyamoorthy, President of AG&P Terminals & Logistics, said.