Swan Energy to invest Rs 5,600 cr for FSRU terminal

Our Bureau Ahmedabad | Updated on January 22, 2018 Published on November 24, 2015

Belgian co Exmar Marine NV to set up India's first FSRU

Swan Energy Limited will invest around Rs 5,600 crore towards setting up of Jafrabad LNG Port project in Gujarat with one jetty-moored Floating, Storage and Regasification Unit (FSRU), company officials informed here.

The project will be jointly developed and operated by Swan Energy along with its JV partners, Belgian firm Exmar Marine N V and Gujarat-government's Gujarat State Petroleum Corporation (GSPC). Swan Energy holds 51 per cent stake in the JV company, Swan LNG Pvt Ltd, while Exmar Marine and GSPC hold 38 per cent and 11 per cent respectively.

The FSRU receiving terminal will have an initial capacity of 5-million tonnes per annum (MTPA), making it arguably India's first FSRU facility. The capacity will be expanded to 10 MTPA with an additional investment of US $ 300 million (approx Rs 2,000 crore) in due course of time.

While 20 per cent of the funding will be made through equity, the company will raise the remaining 80 per cent funds through a mix of qualified institutional placements (QIPs) and Foreign Currency Convertible Bonds (FCCBs) to meet the funding requirement.

"The funds will be raised in Swan Energy and then invested in Swan LNG. We have secured all necessary approvals and permits for the project. We will soon begin negotiations with EPC contractors for developing the port," said Nikhil Merchant, Managing Director of Swan Energy Limited here.

Exmar will provide experience in floating LNG solutions into the integrated project management team and will participate as equity partner in the LNG receiving terminal. As a State government's terminal policy, 30 per cent of the operational capacity will be booked by the state PSU.

As a result, GSPC has tied up for 1.5 MTPA capacity, while three other PSUs including ONGC, Indian Oil Corporation and Bharat Petroleum Corporation (1 MTPA each) have tied up for a period of 20 years. 

"This ensures secured revenues for the company. As a business model, we have adopted tolling model, which is also a first in India. In the first year itself we expect to achieve break-even," added Merchant. The unit is expected to be commissioned by January 2019. 

Exmar had pioneered the floating regasification solutions in the world by introducing the first FSRU in 2005. The FSRU design has been finalised with Korea-based Daewoo Shipbuilding & Marine Engineering (DSME) Shipyard. The delivery of the first FSRU is expected by December 2018.

Published on November 24, 2015
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