Exmar replaces Teekay in Swan FSRU proposal

Vol 19, PW 6 (19 Nov 15) Midstream & Downstream

Exmar of Belgium has replaced Canada's Teekay Shipping in Swan Energy's proposed 5m t/y LNG project off Jafrabad in Gujarat.

Previously, promoter Swan had 51%, Teekay had 38% and GSPC had 11%. But a Swan source confirms Teekay's 38% stake will now be transferred to Exmar.

In a statement released on November 17, Exmar said it had entered into a binding agreement with Swan for the Jafrabad project. "The two parties have the firm intention to expand the (proposed capacity of the) terminal to 10m t/y through the deployment of a second FSRU," said Exmar.

Swan sources said Teekay initially wanted to reduce its stake by up to 12% only because of concerns about the depreciating rupee. “Teekay said the rupee depreciation (against the US dollar) over the past year had affected it a lot (by devaluing its stake),” explains a source.

“Teekay also wanted revenues in dollars, which of course is not possible (in India).” Swan, he adds, made it clear that if Teekay wanted to stay it should leave the equity structure unchanged.

“If Teekay was allowed to reduce its stake," we hear, "Swan would have had to hunt for yet another partner to take the balance, which it was unwilling to do. Swan preferred that Teekay walk away from the project completely and made this clear in discussions.