Shipping Ministry issues guidelines for setting up LNG FSRU at major port trusts

The Union Shipping Ministry has framed norms for setting up Floating Storage Regasification Units (FSRU) for handling Liquefied Natural Gas (LNG) cargo at major port trusts.

As per the guidelines, land license model will be followed under a single stage e-tendering for implementing FSRUs with private funds wherein the bid reserve price will be the water area charges set as per the land policy prevailing at a particular port.

The entity quoting the highest premium above the reserve price to be paid to the port will win the contract, typically for 30 years.

The total licence rental for the licence period is to be paid upfront, according to the Ministry. The FSRU project will not be bound by any minimum guaranteed throughput (MGT) till five years after Commercial operations Date (CoD). Thereafter, 30 per cent of the project capacity will be prescribed as MGT.

“The licence agreement could be terminated for defaulting on MGT for three consecutive years. However, the licensee may be given an option to continue with the project by paying wharf age for the shortfall in MGT.”

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