Global downstream gas and LNG logistics company Atlantic Gulf & Pacific (AG&P) and ADNOC Logistics and Services have signed an agreement for the conversion, supply, operations, and maintenance of a floating storage unit (FSU).
AG&P said on Monday that the FSU would be converted at a new LNG import facility located within Karaikal Port in Puducherry, India.
The 137,756 cubic-meter FSU owned by ADNOC L&S is being chartered for 15 years through an innovative commercial model enabling supply to be scaled to match demand.
Construction on the terminal will begin in the first quarter of 2020 with commercial operations expected to start before the end of 2021.
The Karaikal FSU will be only the fourth FSU-based LNG import terminal in the world, after those in Malta, Malaysia, and Bahrain. ADNOC will provide a Japan-built, Moss-type containment vessel to be converted for the project from its fleet of eight LNG ships.
Abdulkareem Al Masabi, CEO of ADNOC L&S, said: “[This] 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 will have an initial capacity of 1 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 500-kilometer radius, including the heavily industrialized region of central Tamil Nadu. It will also serve gas-fired power plants as well as AG&P’s own city gas distribution network across South India.
Karthik Sathyamoorthy, president of AG&P Terminals & Logistics, added: “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 regasification terminals for smaller volumes.“