Swan Energy-Exmar's FSRU-based LNG terminal in Gujarat to cost Rs 5,600 cr

They intend to invest around Rs 2,000 cr more on the second unit of what will be India's first floating LNG terminal

On its way to set up the country's first jetty-moored floating, storage and regasification unit (FSRU) at the upcoming Jafrabad LNG port, the joint venture project by Swan Energy Limited (SEL) and its Belgium partner Exmar Marine N.V. will see a project cost of Rs 5,600 crore, the former said on Tuesday.

To be commissioned in January 2019, the Jafrabad LNG Port will see a 5 MTPA receiving terminal, with one jetty-moored Floating, Storage and Regasification Unit (FSRU), wherein the two partners have expressed intention to expand the terminal to 10 MTPA, through the deployment of a second FSRU at a project cost of $300 million (Rs 2,000 crore approximately).

The joint venture company, Swan LNG Pvt. Ltd. has seen an equity stake of 51 per cent by Swan Energy Ltd., 38 per cent by Exmar Marine and 11 per cent by Gujarat State Petroleum Corporation (GSPC). On its part, EXMAR will contribute its experience in floating LNG solutions into the integrated project management team and will participate as equity partner in the LNG receiving terminal. Exmar is known as a pioneer in floating regasification solutions for having introduced world's first FSRU in 2005.

The LNG port and jetty-moored FSRU will be developed on a build, own, operate and transfer (BOOT) project model. Nikhil Merchant, Managing Director of Swan Energy Limited, said that the company had secured all necessary permitting for the project and the concession agreement is ready for execution. The project has bagged a concession agreement for 30 years plus 20 years with Gujarat Maritime Board (GMB).

Moreover, while it is in negotiation with EPC contractors for the breakwater, jetties, topsides and onshore receiving facilities, several financial institutions have already expressed their interest in support of the project and final investment decision is therefore planned for the first half of 2016.

Swan has already tied up for an initial 4.5 MTPA over a period of 20 years with the likes of GSPC for 1.5 MTPA, and Indian Oil Corporation Limited (IOCL), Oil and Natural Gas Corporation Limited (ONGC), and Bharat Petroleum Corporation Limited (BPCL) for one MTPA each. The company has already finalised design of the FSRU with a Korean firm and is expected to take delivery of the same by December 2018.

"We will fund it through internal accruals as well as debt. Swan has a huge land bank under development. We will also go to market for QIP. Subject to global economic conditions, we can also look at the option of FCCB in near future. The money will be raised in Swan Energy and then invested in Swan LNG," Merchant said while commenting on the fund raising plans of the company.

"With Exmar, we bring over 10 years of experience in the development, construction, ownership and operation of FSRU'S to India's first LNG FSRU Terminal. Exmar's professionalism and know-how will no doubt give additional assurance to t terminal users and our financial partners," Merchant stated.