Wikborg Rein Singapore advises AG&P on long-term FSU charter from ADNOC for new Karaikal LNG terminal

We have advised global downstream gas and LNG logistics company, AG&P, on its long-term charter from the Abu Dhabi National Oil Co (ADNOC) of a Floating Storage Unit (FSU) for AG&P’s new LNG import terminal located within Karaikal Port in Puducherry, India.

The FSU is being chartered for 15 years through an innovative commercial model enabling supply to be scaled to match demand.

ADNOC’s shipping arm ADNOC L&S will service the contract with a 137,756 cbm Moss-type LNG tanker from its current fleet of eight LNG ships, which will subsequently be converted to an FSU. The agreement covers the supply, conversion, operations and maintenance of the unit.

The deal was led on behalf of Wikborg Rein by Ina Lutchmiah, head of the firm’s transactional practice in Singapore, who recently relocated to Singapore from the firm’s London office.

Lutchmiah commented: "I am delighted to be working with AG&P on this exciting and innovative project in India. This is an important development for AG&P, and the industry as a whole. Our role in this project reconfirms our expertise in the floating LNG arena which we are now able to offer from both our European and Singapore offices."

Owned and operated by AG&P, the LNG import terminal at the Karaikal Port will have initial capacity of 1 million tonnes per annum (MTPA) which will be expanded to 3 MTPA in the medium term as demand increases.

The Karaikal FSU will be only the 4th FSU-based LNG import terminal in the world, joining similar projects in Malta, Malaysia, and Bahrain. It will bring critical LNG supply to southeast India, with commercial operations expected to commence in 2021.

Singapore-headquartered AG&P is a global leader in LNG import and LNG and gas logistics, distribution and infrastructure solutions.

Matthew Teismann, AG&P’s Senior Vice President for Legal, commented: "Ina was instrumental in supporting our negotiations with ADNOC. She immediately understood what AG&P and ADNOC were trying to achieve commercially with a solution that drives down the unit cost of regasification terminals for smaller volumes of LNG. Ina provided expert legal advice throughout, while balancing our strategic objectives."

Our Singapore office has been involved in a series of high-profile LNG projects worldwide.