Exmar might exit Swan FSRU Pipavav project

Vol 20, PW 12 (09 Mar 17) Midstream & Downstream

Swan is putting on a brave face but rumours are circulating that Belgian partner Exmar wants to exit its 5m t/y FSRU project off Pipavav in Gujarat.

A Gandhinagar source believes Exmar's new Rotterdam-headquartered owner Royal Vopak is not keen on Swan's Rs5900cr ($887m) FSRU. "Vopak is questioning the project cost estimation," he says.

"They don't want to pump in so much money." Another senior industry source has heard Exmar is definitely out of the FSRU project. "It will be difficult for Swan to convince Exmar's new owners to stay on," he says.

"Swan will need all their persuasion skills." Yet another industry source says even if Exmar does invest in the FSRU it might reduce its equity stake from the planned 38%. "The good thing about Swan's FSRU is that all mandatory approvals and agreements are in place," he says.

"It just needs to get going." When contacted, a senior Swan source refused to confirm or deny the rumours. "As of now my answer is yes Exmar will take 38%," he said.

"But Exmar's FSRU business is being sold and we still need confirmation from the new owners (Vopak). Nevertheless work on the ground has begun at Pipavav and we are optimistic things will fall into place." Exmar signed an agreement transferring its FSRU business to Vopak on December 21, 2016.