AG&P and Abu Dhabi firm forge long-term charter of floating storage unit in India port

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ATLANTIC GULF & PACIFIC (AG&P) said on Monday that it had signed an agreement with ADNOC Logistics and Services for the charter of a floating storage unit (FSU) in an Indian port.

The logistics company said in a statement that the agreement covers the conversion, supply, operations and maintenance of the FSU at AG&P’s LNG import facility within Karaikal Port in Puducherry, India.

The 137,756 cubic meter FSU owned by ADNOC L&S is being chartered for 15 years through a 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 targeted before end-2021.

AG&P said the Karaikal FSU will be the fourth FSU-based LNG import terminal in the world, after those in Malta, Malaysia and Bahrain. ADNOC L&S will provide a Japan-built, Moss-type containment vessel as FSU for the project from its fleet of eight LNG ships.

Abdulkareem Al Masabi, chief executive of ADNOC L&S, said the agreement is significant for his firm “in a number of ways.”

“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,” he said.

“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,” he added.

Owned and operated by AG&P, the LNG import facility at the Karaikal Port will have initial capacity of 1 million tons 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 500-kilometer radius, including the 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, 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,” he added.

AG&P develops and runs LNG and gas logistics and distribution solutions. It provides the infrastructure to access natural gas. ADNOC’s (Abu Dhabi National Oil Co.) logistics and services unit provides shipping, maritime, port, and logistics.