Will P-LNG convert Disha/Raahi into FSRUs?
Global demand for FSRUs is high, but Petronet-LNG is considering a novel proposal that might secure two FSRUs and save costs.
Why not send its two old tankers, Disha and Raahi, to South Korea and convert these to FSRUs at a fraction of the cost of building new FSRUs? Both 138,000-cubic metre tankers have been carrying long-term QatarEnergy LNG from Ras Laffan to Dahej since 2004. "This is one option we're considering," confirms a company source.
Another source speculates that after converting Disha and Raahi to FSRUs, Petronet might use one at Gopalpur in Odisha and the other in Sri Lanka. If Petronet-LNG goes ahead with the plan, it will replace Disha and Raahi with two new modern tankers with efficient engines and a larger carrying capacity to carry Qatari LNG to Dahej.
"Disha and Raahi are Petronet-LNG's workhorses," we hear. "But they've aged, and their capacity is low."
Modern LNG tankers come with a capacity of more than 170,000 cubic metres. "This plan is a win-win," says a source.
"FSRU demand is at an all-time high, which is why Petronet-LNG can't find one for Gopalpur." Industry estimates put the cost of converting an LNG tanker to an FSRU at $100m to $150m, depending on the tanker's make and capacity.
Contrast that with the $300m cost of FSRU Vasant, which Swan Energy ordered in 2017 at Hyundai's Ulsan shipyard in South Korea, taking delivery on September 29 (2020). Constructing a brand new FSRU takes 36 to 48 months, while converting an old tanker to an FSRU takes only 18 to 24 months.
"Tougher emission standards mean it makes sense to convert old LNG tankers to FSRUs," we hear. Since January 2023, stricter International Maritime Organisation environmental regulations have been in place, seeking to hit net zero emissions by 2050, eventually making Disha and Raahi obsolete.
"LNG demand is rising in India and its neighbours," says an industry source. "With rising demand, LNG infrastructure demand is also increasing."
He adds that Pakistan and Bangladesh have chosen to set up FSRUs instead of land-based terminals. Sri Lanka is also in the FSRU queue, with Petronet-LNG planning to send LNG there from its 5m t/y Kochi terminal.