May 7, 2018 [S&P Global] - India's first floating storage and regasification terminal or FSRU could begin importing LNG as early as the fourth quarter of this year on the country's west coast, the project's developer H-Energy Gateway Private Ltd and France's Engie, said in separate statements this week.
The Norway-flagged FSRU, named GDF Suez Cape Ann, which is under long-term timecharter with Engie, arrived Tuesday at Jaigarh Port in the western state of Maharashtra for its inauguration.
The 80,780 dwt vessel marks the first deployment of floating gas infrastructure in India, which has lagged neighboring Pakistan and Bangladesh in installing floating gas systems, as it already has a network of onshore LNG terminals.
India is Asia’s and the world’s fourth-largest liquefied natural gas importer, but its onshore LNG terminals have remained underutilized due to relatively high gas prices and a lack of pipeline interconnectivity.
GDF Suez Cape Ann should help boost India’s LNG imports further, in addition to the onshore terminals at Dahej, Hazira, Dabhol and Kochi, all of which are located on the west coast. Shortages on the east coast, where FSRU’s are more badly needed, will persist.
It also remains unclear whether H-Energy has lined up buyers for its LNG supplies, and it may remain largely dependent on spot procurement, traders said.
GDF Suez Cape Ann has an annual capacity to process 4 million mt/year of LNG and is capable of reloading LNG into other vessels, H-Energy, the energy arm of Mumbai-based real estate company Hiranandani Group, said.
It said LNG from the plant will be supplied to customers through a 60 km pipeline that connects to national gas grids at the city of Dabhol in the same province, which is the site for LNG-fueled power plants.
“The LNG terminal will offer storage, re-gasification, re-loading, fuel bunkering and truck-loading facilities to cater to the growing energy demand of Indian industries,” said H-Energy, which is building associated pipeline and LNG trucking networks, and city gas distribution infrastructure.
“No cargo operations are planned. Start date should likely be during 4Q 2018,” Engie confirmed in a separate statement.
The GDF Suez Cape Ann, which has a storage capacity of 145,000 cu m, was deployed in Tianjin in China before it was leased to H-Energy for five years. Given its short-term deployment, it is unclear what H-Energy plans to do for long-term gas procurement.
In 2017, India recorded a modest increase in LNG imports of just 1.2% due to the effects of stronger LNG spot prices and higher oil-indexed prices during the year, according to the International Group of Liquefied Natural Gas Importers, or GIIGNL.
The Jaigarh Port, where GDF Suez Cape Ann is anchored, is owned by JSW Infrastructure, the maritime arm of infrastructure conglomerate JSW Group. JSW said it aims to build capabilities for direct berthing of next generation vessels like Q-Max LNG carriers, the world’s largest.
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