SP Group wants F-LNG for Chhara LNG terminal

Vol 19, PW 4 (22 Oct 15) Midstream & Downstream

Offshore floating LNG (F-LNG) production on the high seas is still a nascent technology commercially untested anywhere but the $2.5bn Mumbai-based Shapoorji Pallonji (SP) Group is placing it centre-stage in the global hunt to build a LNG portfolio to feed its proposed 5m t/y regasification terminal with HPCL at Chhara on the Gujarat coast.

“SP has identified stranded gasfields overseas that it wants to acquire, where it can convert gas to LNG and bring to Chhara,” reports a source. “SP’s plan is to have a mixed portfolio of ‘term’ LNG from traditional suppliers, plus F-LNG from its own assets.

” Drawing on its experience as owner/operator of two FPSO (Floating, Production, Storage and Offloading) facilities hired by ONGC offshore Mumbai, where associated gas is separated from oil, the SP Group believes it has the required expertise to import up to 1m t/y of its allotted 2.5m capacity at Chhara through F-LNG; another 1.5m t/y through ‘term’ supplies. The remaining 2.5m t/y will be sourced by HPCL, which signed a JV agreement with group subsidiary SP Infra for Chhara on July 31, 2013.

“Liquefaction costs for F-LNG production is not more than $2.20/mmbtu,” we hear. “Shipping these days is not much, add $3 for royalty, taxes, other costs and scope exists for arbitrage.

” Scheduled for Phase-I start-up in 2019, the 5m t/y terminal can scale up to 10m t/y in Phase-II and 15m t/y in Phase-III.

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