Essar plan for FSRU bad news for Shell-Total

Vol 19, PW 18 (19 May 16) Midstream & Downstream

Yet another FSRU project has joined the long queue in India: this time a 5m t/y facility proposed by Essar at Hazira, which if it happens will compete directly with Shell and Total's terminal nearby.

Essar wants to take advantage of low spot LNG prices (below $5/mmbtu) for its steel mill, its 1015-MW twin power stations at Hazira and its 405,000 b/d Vadinar refinery on the Gujarat coast. When contacted a senior Essar source confirms: "The proposal is at an early stage but yes we are looking at setting up a FSRU at Hazira." Essar Ports will set up the FSRU with Essar Steel and Essar Power as anchor customers.

"We have a cargo handling facility at Hazira," adds Essar. "Plans to diversify this facility to handle LNG were planned for a long time." Essar must set up both marine and onland facilities for the FSRU which it will moor at a single point mooring away from shore as the draft or water depths near its Hazira cargo facility at the mouth of the Tapti River is not enough.

Will Essar emulate Swan Energy which placed a $325m order for a new FSRU with South Korea's Daewoo in October 2015 for its proposed Pipavav project? No - Essar is talking to several companies for a decommissioned LNG tanker with onboard regasification facilities.