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GDF SUEZ lands $1.1bn Uruguay FSRU contract

16 May 2013 19:09:39 | glm

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The Gas Sayago joint venture, formed between Uruguayan state oil company ANCAP and utility UTE to develop the country's first floating storage and regasification unit (FSRU) import terminal, has selected France-based energy group GDF SUEZ as the preferred provider and operator of the facility.

"GDF SUEZ was notified as the recommended bidder in the tender for a build, own, operate and transfer contract, and will now enter the final stage of negotiation with Gas Sayago for a 20-year contract," a GDF SUEZ spokeswoman said.

GDF SUEZ overcame rival offers from Norwegian shipowner Hoegh, Spanish utility Enagas and a South Korean consortium (comprising state-owned gas monopoly KOGAS and shipbuilder Samsung), Uruguay's energy and mining minister Roberto Kreimerman announced in a 14 May press conference.

Following the award, GDF SUEZ has said it will provide Gas Sayago "in principle for an import terminal with up to 290,000 cubic metre [cbm] of LNG storage capacity", suggesting that the floating regasification facility will be supported by either separate floating or onshore storage units.

The 10 million cubic metre/day capacity GNL Del La Plata facility is expected to be on line in March 2015, and will be located at Punta Sayago, to the west of Uruguayan capital Montevideo.

The project, which will include a 1,800ft-long (549m) concrete breakwater, is expected to cost $1.125bn, according to official figures, which includes a $14m monthly rental payment to GDF SUEZ over the 20-year subcharter of the vessel.

Once that 20-year contract is over, the Uruguayan state will assume ownership of the terminal.

Regional demand

The Uruguayan government decided last year to forge ahead with the project on its own after negotiations with Argentinean state-run gas company ENARSA collapsed over a possible joint development. Gas from the terminal will supply a 530MW combined cycle gas turbine power plant currently being developed on shore by UTE.

However, with the country's own domestic gas consumption expected to peak short of the terminal's capacity, Uruguayan authorities remain open to future sales to end-users in its gas-hungry neighbour.

"In making the decision, we had to evaluate different scenarios, including our current demand, our future demand based on current economic growth, and the potential for sales to neighbouring countries. All these scenarios seemed positive based on the selected offer," Kreimerman said.

Supply talks ongoing

Meanwhile, both UTE and ANCAP are looking to source LNG supply for the terminal through separate agreements. As many as 12 companies have been involved in discussions, a Uruguayan source told ICIS previously, with a formal announcement expected either late this year or by early 2014.

GDF SUEZ holds an existing presence in South America through its operation of the 1.25m tonne per annum (mtpa) capacity Mejillones FSRU terminal in northern Chile. The firm supplies the facility with volumes sourced from its supply positions in Egypt and Yemen.

The France-based energy group also has a long-term offtake agreement for 4mtpa of US liquefaction capacity from the planned 12mtpa Cameron LNG facility, developed by US-based utility Sempra.

Uruguay's project bolsters GDF SUEZ's position as an FSRU developer, adding to its portfolio the 145,130cbm GDF SUEZ Cape Ann, which will be used for Chinese energy group CNOOC's Tianjin FSRU. In addition, GDF SUEZ is also bidding to provide an FSRU for India's east coast, developed in conjunction with Indian state-owned gas transmission system operator GAIL and its Andhra Pradesh Gas Distribution Corporation (APGDC) joint venture.

Of the Paris-based company's fleet, the 145,000cbm GDF SUEZ Neptune is an existing LNG carrier that has regasification capability, which could make the vessel a possibility for the South American project.

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