Abu Dhabi's ADNOC Logistics & Services (ADNOC L&S) has revealed the LNG carrier it will convert as it moves into the floating storage sector.

The 137,540-cbm Al Khaznah (built 1994) will become an FSU for a firm 15-year charter to Singapore downstream gas company Atlantic Gulf & Pacific (AG&P).

The deal also contains an option for a five-year extension, ADNOC said.

The vessel will be based at the new Karaikal terminal in India from 2021. No financial details have been revealed.

The contract allows ADNOC to "unlock value from one of its maturing assets and highlights how the company is creatively diversifying both its customer base and revenue streams," it said.

The import terminal is located 320km south of Chennai.

The FSU will be the fourth such LNG facility in the world, following those in Malta, Malaysia, and Bahrain.

ADNOC LNG charter ending in 2021

The ship is part of a fleet of eight LNG vessels operated by ADNOC L&S and currently under contract with ADNOC LNG. This deal will end in 2021.

"The conversion will "extend the vessel’s employment life by at least 15 years, offering ADNOC L&S a new revenue stream for a vessel that may otherwise have had deployment challenges after 25 years of operation," the company said.

ADNOC L&S CEO Abdulkareem Al Masabi added: “This agreement with Atlantic Gulf & Pacific is significant for ADNOC Logistics & Services in a number of ways.

"Firstly, it represents our inaugural agreement with AG&P and supports our company’s goal of securing new alliances that enable smart growth. It also maximises value from one of our maturing assets, while also providing AG&P with a flexible storage solution for their LNG terminal.”

The vessel was built in Japan to ADNOC L&S’ design specifications and at the time of its launch was the largest LNG carrier in the world.

Construction of the new gas terminal will begin in the first quarter, with operations expected to start before the end of 2021.

ADNOC also has interests in the tanker, bulker, boxship and offshore support vessel sectors.

Last year, it agreed a deal with Norway's Kanfer Shipping to explore small-scale LNG projects.

They were due to examine transport, onshore and offshore storage, bunkering and other infrastructure.