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India’s Swan Energy to divest LNG terminal to Turkey’s Botas for $399 million
Swan Energy Ltd. plans to sell its 51% stake in a floating LNG terminal to Turkey’s Botas for $399 million. The deal, subject to shareholder and regulatory approval, comes after delays in commissioning the terminal due to the pandemic and a cyclone.
Sheersh KapoorAugust 15, 2024, 3:42:34 PM IST (Published)
Swan Energy Ltd., an Indian multinational conglomerate with diverse interests, is set to sell its stake in a floating liquefied natural gas (LNG) terminal to Turkey’s state-run Botas for $399 million.
The Mumbai-based company disclosed the transaction in a stock exchange filing, noting that the deal is expected to be finalized within the next six months, pending approval from both shareholders and regulatory authorities.
The floating storage and regasification unit (FSRU), known as Vasant 1, has a capacity of 180,000 cubic meters. Swan Energy, through its subsidiary Triumph Offshore Pvt., owns a 51% stake in the unit, while the remaining 49% is controlled by Indian fertilizer giant IFFCO.
It is currently unclear whether IFFCO plans to sell its portion of the unit as well, as spokespeople from both companies have not yet provided comments on this matter.
The terminal was initially intended to commence operations at Jafrabad port on India’s west coast during the 2019-2020 period. However, its commissioning faced setbacks due to delays in port facility construction, exacerbated by the COVID-19 pandemic and a cyclone that struck in 2022, as detailed in Swan Energy’s annual reports.
Despite these delays, the FSRU was delivered by Hyundai Heavy Industries Shipyard in September 2020 and has been chartered to Botas since January 2023.
India currently operates seven land-based LNG terminals, but five of these facilities are running at less than 50% capacity. This underperformance is attributed to weaker demand and a shortage of pipelines connecting these terminals to the national gas grid, further complicating the country’s energy infrastructure.
The sale of Swan Energy’s stake in the floating LNG terminal reflects ongoing shifts in the global energy landscape and highlights the challenges facing LNG infrastructure in India.