Shapoorji to set up FSRU for Mumbai Port Trust

Mumbai-based Shapoorji Pallonji appears to have replaced one LNG project with another.

After exiting from the Chhara LNG terminal project with HPCL in March (2021), Shapoorji is about to sign an agreement with the Mumbai Port Trust (MPT) to deploy a FSRU approximately 7-km offshore Mumbai. This report learns MPT issued the LoA to set up and operate the 5m t/y FSRU to Shapoorji Pallonji Oil & Gas (SPOG) in February (2021) under a Design-Build-Finance-Operate and Transfer model.

Confirming this, an MPT source tells us the LoA is yet to be converted into a formal agreement. "We have not yet signed the agreement," he stresses.

"Signing is expected after the (Covid19) lockdown is lifted; that's why we haven't announced it publicly yet." Still unclear is when Maharashtra will lift the lockdown, extended from April 28 (2021) to May 15 (2021).

About a month after SPOG received the LoA from MPT, fellow group company SP Ports sold its 50% stake in the proposed 5m t/y Chhara LNG terminal in Gujarat to partner HPCL for Rs397cr ($56m). For Shapoorji Pallonji, Mumbai is a more attractive option with its captive market for R-LNG.

Estimated to cost Rs2690cr ($384m), SPOG has begun making inquiries in the domestic and overseas markets among vendors and subcontractors for different parts of the project, including Rs1500cr ($214m) for the 170,000 cubic metre capacity FSRU. For its part, MPT must be relieved the project is, at last, coming to fruition.

In 2015, it issued the first tender but scrapped this in April 2018, despite receiving two bids, ostensibly because of delayed approval from the cabinet's economic affairs committee. In July 2020, MPT received bids in the latest tender but only opened SPOG's offer, the sole valid proposal.

SPOG will sign a 30-year concession agreement with MPT, including three years to set up the project.