LNG

Swan Energy Ltd, part of the Indian conglomerate the Swan Group with interests in oil and gas, textiles and infrastructure has given details of its lease-out deal to Turkey’s state-owned Petroleum Pipeline Corp. (BOTAS) of a floating storage and regasification unit.

The charter for the “Vasant 1” floating storage and regasification unit (FSRU), which is controlled by Japan’s Mitsui OSK Lines, is held by Swan Energy subsidiary Triumph Offshore Private Limited (TOPL) and has now moved to Saros Bay offshore northern Turkey.

The FSRU “Vasant 1” has capacity of 180,000 cubic metres and was completed by Hyundai Heavy Industries of South Korea at the end of 2020 for Swan‘s planned LNG import terminal at Jafrabad in India’s Gujarat state.

Swan was the lead promoter of the delayed Jafrabad LNG import terminal with a 63 percent equity stake.

The other shareholders are the Government of Gujarat with a 26 percent interest and the remaining 11 percent is owned by FSRU Venture India One Ltd, the Indian subsidiary of Japanese shipping line Mitsui OSK Lines.

MOL acted as technical partner for the Jafrabad project by supervising the construction of the FSRU.

Charter rates

“The lease arrangement is generating daily rental of $250,000, or about 2 crore Indian rupees (as per the present exchange rate), for Swan Energy,” said the Indian firm of the BOTAS deal.

“The duration of the lease agreement is for 12 months and is extendable on this basis of mutual agreement,” Swan added.

Based on the bare boat charter, TOPL has leased out only the bare FSRU vessel to BOTAS and BOTAS will manage the operational expenses including fuel, crew, insurance, maintenance, and repair.

“As a result, TOPL does not incur any operational expenses during the lease tenure,” Swan said.

BOTAS also runs the Marmara Eregesli LNG import terminal and cargoes have been received there since 1994, first from Algeria and later from countries like Qatar and Nigeria and then over the last five years from the US as well.

Commenting on the lease arrangement with BOTAS, Rishi Chopra, an executive of Swan, said the lease agreement based on bare-boat charter would enhance the rental earning capabilities of the FSRU.

“The net revenue from the annual rental will strengthen the profitability position of the company,” explained Chopra.

“By renting out the FSRU to BOTAS, we aim to play an enabling role to boost the LNG initiatives of the Turkish government to build clean energy preparedness amid a growing demand for FSRUs in that market,” he added.

Turkish Petroleum Pipeline Corp. (Botas) said one of the world's biggest ship-to-ship liquified natural gas transfers and regasfication operations was taking place in the Mediterranean port of Dortyol.

The operation involves the 210,100 cubic metres capacity Qatari Q-Flex carrier “Al Sadd” and the Japanese-owned “MOL FSRU Challenger”, the world’s largest floating storage and regasification unit with capacity of 263,000 cubic metres.

Turkey currently has four import facilities, two FSRUs and two onshore terminals.

The regional director of Botas utilities, Mehmet Tecimen, said that the two ships would take two days to conduct the transfer operation in which LNG will be regasified and injected into Turkey's natural gas pipeline system.

“This Botas chartered FSRU anchored in Dortyol is the largest FSRU in the world at 345 meters in length,” said Tecimen.

He noted that the vessel was commissioned at Dortyol port in February 2018 and this was its largest transfer to date.

The “MOL FSRU Challenger” has a regasification discharge capacity of 540 million cubic metres per day.

Botas signed a deal in September 2017 to receive 1.5 million tonnes per annum of LNG from Qatargas over a period of three years.

Turkey's first FSRU operations began in December 2016 in Aliaga port near Izmir to boost the nation’s LNG supplies.

Botas also operates Turkey’s oldest onshore import terminal, the Marmara Ereglisi facility, that has been on line since 1994.

There is a second onshore terminal owned by Turkish company EgeGaz and on line since 2006, also near Izmir, and a second FSRU, the “Neptune”, operating since December 2016 in the Aliaga industrial zone.

The Turkish government has said it was considering a fifth LNG import facility near Saros Bay on the Gallipoli peninsula.

The American Bureau of Shipping, the US maritime classification society, said it was chosen by Petroleum Pipeline Corp. of Turkey to class a floating storage and regasification unit (FSRU) ordered in South Korea.