Swan picks Hyundai to build FSRU at Jafrabad

Vol 20, PW 24 (24 Aug 17) Midstream & Downstream
     

Once thought an ugly duckling unlikely to take off, a proposed 5m t/y LNG project at Jafrabad in Gujarat is steadily transforming itself into a handsome 'swan'.

Ending months of speculation, PETROWATCH learns Mumbai-based textiles to energy group Swan Energy has selected South Korea's Hyundai Heavy Industries to provide the FSRU tanker. Sources with direct knowledge of the project tell us Swan is negotiating the formal FSRU building contract with Hyundai which it expects to sign end-August.

"Swan issued the LoI to Hyundai end-June," we hear. "Formal contract negotiations began after that." He adds the FSRU construction cost will be about $225m, rising to around $250m after Indian import tariffs, transportation and other costs.

One Swan company will buy the 180,000 cubic metre FSRU and lease it to another subsidiary that will run the LNG project. On board will be four re-gasification units of 250m cf/d (7m cm/d) capacity each.

"Only three units are needed for the FSRU project's 5m t/y capacity," we hear. "One unit will be on standby." Hyundai is scheduled to deliver the FSRU by November 2019 so it can be commissioned by December 2019.

Swan's project crossed another critical milestone end-July when merchant banker SBI Caps launched the financial closure exercise to borrow money which it expects to complete by October. Swan is expected to borrow Rs1600cr ($250m) from up to nine Indian and foreign banks - roughly equivalent to the FSRU project cost.

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