The deal covers the conversion, supply, operations, and maintenance of the FSU for a period of 15 years
Atlantic Gulf & Pacific (AG&P) and ADNOC Logistics and Services (ADNOC L&S) have signed a liquefied natural gas (LNG) charter deal of a floating storage unit (FSU) at a new import facility in southern India.
Under the agreement, ADNOC L&S will provide a 137,756 cubic meter FSU unit at AG&P’s new LNG import facility at Karaikal port in Puducherry.
The deal covers the conversion, supply, operations and maintenance of the FSU for a period of 15 years.
Construction on the terminal will begin in Q1 2020
Construction on the terminal is expected to commence in the first quarter of this year while it is being expected to be operational before the end of 2021.
ADNOC L&S CEO Abdulkareem Al Masabi said: “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.”
The Karaikal LNG import facility, which will be owned and operated by AG&P, will have an initial capacity of 1mtpa. It will be expanded to 3mtpa in the medium term as demand increases.
The terminal will be used by domestic, industrial and commercial customers within a radius of 500 km, which features key manufacturing clusters for the fertiliser, cement, steel, textile, leather, sugar and garment industries of central Tamil Nadu.
It will also serve gas-fired power plants in addition to AG&P’s own extensive city gas distribution network across southern part of India.
AG&P Terminals & Logistics president Karthik Sathyamoorthy said: “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.”
The new FSU will be only the fourth FSU-based LNG import terminal across the globe. The others are based in Malta, Malaysia and Bahrain.