Abu Dhabi National Oil Co (ADNOC) is diversifying into floating LNG storage through a conversion deal in India.
The group's shipping arm ADNOC Logistics and Services (ADNOC L&S) will provide a floating storage unit (FSU) to downstream gas company Atlantic Gulf & Pacific (AG&P) for the port of Karaikal.
ADNOC will convert and operate the unit over a 15-year charter.
It has eight LNG carriers: four of 135,000 cbm and four of around 137,000 cbm.
The conversion candidate is 137,756 cbm, the company said, so the size would indicate it will be one of the Um Al Astan, Al Hamra (both built 1997), Mraweh and Mubaraz (both built 1996).
However, the company said the vessel is a Japanese-built, Moss-type unit. Its four bigger ship were built in Finland, while its smaller vessels were constructed in Japan.
The charter deal is described as "an innovative commercial model enabling supply to be scaled to match demand".
Terminal due by end of 2021
Construction of a new gas terminal will begin in the first quarter, with operations expected to start before the end of 2021.
The Karaikal FSU will be only the fourth LNG FSU in the world, ADNOC claimed, after those in Malta, Malaysia and Bahrain.
Abdulkareem Al Masabi, chief executive of ADNOC L&S, said the agreement represents "our first agreement with AG&P, and one of our company’s most important goals is to find creative ways to branch out and find new partnerships around the world to fuel our company’s safer, smarter growth."
He added: "It is also an important agreement because it provides AG&P with additional storage flexibility for their LNG terminal as well as giving us the chance to generate more value from one of our historical assets which is coming to the end of its current contract.”
Owned and operated by AG&P, the LNG import facility at Karaikal will have initial capacity of 1 million tonnes per annum (mtpa). This will be expanded to 3 mtpa in the medium term as demand increases.
The terminal will serve domestic, industrial and commercial customers within a 500 km radius, including gas-fired power plants, as well as AG&P’s own extensive city gas distribution network across South India.
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.
