MISC Berhad has earmarked one of its older steam-powered, membrane-type LNG carriers for conversion into a floating storage unit against a contract with Petronas Gas subsidiary Pengerang LNG (Two).

The two companies entered into a binding heads of agreement on Tuesday that will see the Malaysian gas carrier and tanker giant deploy an LNG FSU at the Petronas LNG Regasification Terminal Pengerang in Johor.

MISC said the 137,100-cbm LNG carrier Puteri Delima Satu (built 2022) has been selected to undergo conversion into the FSU that will perform the contract.

Once converted, the Mitsui Ichihara-built ship is set to become commercially operational by the second quarter of 2025 under a 20-year contract term, with provisions for extension based on mutual agreement.

As part of the conversion, the ship will be equipped to run on shore power to reduce emissions and improve operational efficiency.

The Puteri Delima Satu has been laid up in Brunei Bay since January, according to S&P Global’s International Ships register. Identical sister ship Puteri Intan Satu (built 2022) was sold to Evangelos Marinakis’ Capital Gas in January for a reported $35m and currently trades under the name Trader III.

MISC described the Pengerang LNG (Two) project as a “continuation of the collaboration” between itself and Petronas Gas that since 2012 has seen the deployment of the 130,000-cbm FSUs Tenaga Satu (built 1982) and Tenaga Empat (built 1981) at the LNG Regasification Terminal Sungai Udang in Melaka.

Hazrin Hasan, MISC’s vice president of gas assets and solutions, said: “By repurposing and redeploying our existing assets and drawing on our experience from operating FSU Tenaga Satu and FSU Tenaga Empat, we are not only creating a revenue-generating opportunity but also driving better shareholder returns.”

Listed on the Kuala Lumpur Stock Exchange, MISC, which owns and operates 29 LNG carriers, did not disclose any financial terms of the agreement.

The company did not provide any details on where the ship will be converted, although affiliated shipyard group Malaysia Marine and Heavy Industries will likely be a strong contender for the contract.

Senior executives from MISC, Pengerang LNG (Two) and Petronas Gas at the signing ceremony. Photo: MISC Berhad