Swan Energy’s floating terminal, which will start operating next year, will increase India’s liquefied natural gas (LNG) shipping capacity by 12% to 47.5 million tonnes per annum.
A private firm, Swan Energy acquired the terminal, located at Jafrabad in western Gujarat state, last November.
As developing countries start to favor gas over coal and oil, new demand for LNG from India is expected to support Asian gas prices LNG-AS.
Gas prices rose to record highs earlier this year.
According to P Sugavanam, director at Swan Energy and chairman of Swan LNG Ltd, which is developing the project, the 5-mtpa floating storage and regasification unit (FSRU), will be commissioned in April.
He told Reuters on Wednesday that the pandemic and two cyclones have delayed construction of a breakwater, needed to make FSRU an all weather facility.
The FSRU was initially expected to be commissioned in the first quarter of last year, he added.
“The breakwater should be completed by March,” Sugavanam said, adding Ghana’s Tema LNG is currently using the facility for storing LNG.
Aiming to cut emissions, India hopes to raise the share of natural gas in its energy mix to 15% by 2030, from the current 6.2%.
India is the world’s fourth largest LNG importer.
Since Prime Minister Narendra Modi said he wants to raise the share of cleaner fuel in the country, companies are investing billions of dollars in India to build gas infrastructure.
To eventually double the LNG import capacity, Swan Energy is building a jetty and will build more tanks, Sugavanam said.
State-run gas importers Indian Oil Corp and Bharat Petroleum Corp, and exploration firm Oil and Natural Gas Corp (ONGC) have leased 1 mtpa capacity each at Swan’s terminal.
According to a document obtained by Reuters, ONGC earlier this year invited bids from potential suppliers for regular participation in its spot LNG buy tenders.
Seven companies namely, Emirates National Oil Co (Singapore), Total Gas & Power, PTT International Trading, Vitol Asia, Gazprom Marketing & Trading Singapore, Mitsui & Co and Uniper Global Commodities, showed interest in participating in ONGC’s tenders, a source familiar with the matter told Reuters.
Vitol and Mitsui declined comment on the reports while the others including ONGC did not reply to Reuters request for comment.
Swan Energy owns 63% of Swan LNG, while two entities of Gujarat state government together have a 26% share.
Mitsui holds 11% and is also the technical partner on the project.