"Swan Energy to Sell LNG Terminal to Turkey's Botas for $399 Million"

Nikhil Merchant-led Swan Energy Ltd announced plans to sell its stake in a floating LNG receipt terminal to Turkey's state-run Botas for $399 million. The assets of its subsidiary, Triumph Offshore Pvt Ltd (TOPL), will be sold to Botas Trading IC, according to a recent regulatory filing.

"The definitive documents shall be signed in due course," the company stated, adding that the deal is expected to be completed within six months. The sale consideration will be received in multiple tranches over an unspecified period.

TOPL owns a 5 million tonne-per-year floating storage and regasification unit (FSRU) named Vasant-1. Swan Energy holds a 51% stake in TOPL, while fertilizer maker IFFCO owns the remaining 49%. The filing did not specify whether IFFCO would also be selling its stake.

Swan Energy is constructing a liquefied natural gas (LNG) import facility at Jafrabad in Gujarat. Initially, the plan was to import LNG—super-cooled liquid gas—via the floating terminal, reconvert it to its gaseous state at the FSRU, and transport it through an undersea pipeline to onshore users. However, delays in terminal commissioning due to the pandemic and a cyclone in 2022 led Swan to lease out the FSRU to Botas for an initial period of 304 days.

TOPL took delivery of FSRU Vasant-1 from Hyundai Heavy Industries Shipyard on September 29, 2020. The FSRU was initially chartered as an LNG carrier, generating revenue and saving on parking charges, as outlined in the company’s annual report.

On December 31, 2022, TOPL signed a heads of agreement term sheet with Botas Trading IC for the bareboat chartering of the FSRU for at least 304 days, starting January 2, 2023.

The Jafrabad port and terminal are owned by another Swan subsidiary, Swan LNG Pvt Ltd. Swan Energy is the lead promoter with a 63% equity stake, while the government of Gujarat holds 26% (15% by GMB and 11% by GSPL), and the Indian subsidiary of Japan's Mitsui OSK Lines (MOL) holds 11% and serves as the project’s technical partner.

The 10 million tonne-per-year terminal has signed a capacity booking agreement with state-owned oil firms. Gujarat State Petroleum Corp (GSPC) has booked 1.5 million tonnes per year of capacity, while Bharat Petroleum Corporation Ltd (BPCL), Indian Oil Corporation (IOC), and Oil and Natural Gas Corporation (ONGC) have each booked 1 million tonnes per year for 20 years. The port is to be operated on a tolling model, according to Swan.

HBL