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Fos Faster LNG seeks to widen project’s scope

17 Feb 2012 11:32:26 | glm

LNG bunkering and small-scale services could bring a new dimension to the planned 8 billion cubic metre/year Fos Faster terminal in the south of France, according to the head of project operator Fos Faster LNG.

The results of a non-binding market consultation for the project development late last year were labelled as "encouraging", despite a difficult LNG market in Europe.

Philippe Cracowski, president of Fos Faster LNG, said the consortium, owned by Netherlands-based infrastructure developer Vopak (90%) and Shell (10%), is looking to explore its existing and forecasted services portfolio including small-scale LNG, in a similar fashion to a number of terminals in northwestern Europe, including the Gate terminal in the Netherlands and France's Montoir facility.

"Should demand be there, we could decrease regasification capacity and increase volumes allocated to bunkering and small-scale projects," Cracowski said. No details were available on the market's interest as the project moves towards binding discussions with interested companies.

Small-scale LNG infrastructure is flourishing across Europe as the industry sees it as a growth point, able to bolster European gas demand in the future.

Nevertheless, uncertainties remain regarding the extent of the demand and realisation of this type of infrastructure.

Fos Faster LNG also said the company was on track to start commercial operation late in 2017 or early 2018, according to initial schedules. The final investment decision is expected to be taken in 2014.

Key steps in the coming months will be the application for third-party exemption by the Commission and tying supply contracts with customers, Fos Faster LNG emphasised.

The terminal project is initially mapped out to include one jetty for all types of LNG vessels and two tankers of 180,000 cubic metres for a total initial investment cost estimated at €750m ($982m). The facility could be expanded to two jetties and four storage tanks in a subsequent phase.

New developments on the French gas market in 2011 have given the project new momentum. A decision by transmission system operator GRTgaz last year to strengthen the grid in France's southern balancing zone, should accelerate the merger of the isolated PEG Sud area to northwest Europe's integrated and liquid network.

Separately, connecting the Fos Faster project to the French grid will not require any new investment. The pipeline, built to connect the Fos Cavaou terminal in the same area, was built with the view to connect another regasification unit in the Marseilles region.

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