Bharat Gas to offload another 26% in FSU project

Vol 22, PW 24 (19 Sep 19) Midstream & Downstream
     

Bharat Petroleum (BPCL) subsidiary Bharat Gas Resources (BGR) is preparing to offload up to another 26% in its Krishnapatnam LNG project by end-September after finalising a 26% stake transfer to Petronet-LNG.

This report learns Excelerate has joined the race to become BGR's second strategic partner in the 1m t/y Floating Storage Unit (FSU) project in addition to Mitsui & Co and NYK Line. "BGR wants the (second proposed) strategic partner to take at least 20% but no more than 26%," says a source, "and also bring in its experience operating such a facility."

BGR (74%) is poised to set up a joint venture company to run the estimated Rs1800cr ($257m) facility after concluding the 26% transfer to Petronet-LNG. In July (2019) BGR hired technical consultant Engineers India to prepare a DFR with a maximum permitted 10% project variation cost based on two pre-feasibility reports submitted in April: one by consultants Frost & Sullivan; the other by Deloitte with Mott MacDonald.

EIL is expected to submit the DFR in the first week of November after which a joint working group of BGR and partners will review and accept it as a "bankable document" that can be used to arrange bank loans for the project. BGR is also expected to issue tenders to select a project management consultant (PMC) by December with a view to holding a kick-off meeting on January 1, 2020 followed by EPC tenders.