Mitsui & Co., Ltd. (Mitsui) has entered into an agreement with BW Group (BW) to form a joint venture (JV), and to acquire a 49% stake in the JV to jointly own the Floating Storage and Regasification Unit (FSRU) BW Integrity. The deal is expected to close as soon as the payment for the acquisition is completed. This deal is the first FSRU project for Mitsui, and the first project for a Japanese company to participate in the LNG receiving infrastructure business in Pakistan.
The JV will lease the FSRU to PGP Consortium Ltd. (PGPC) based on a long-term FSRU lease agreement (The "Project"), and PGPC will provide LNG regasification services to Pakistan LNG Terminals Ltd. (PLTL), a state-owned company.
Pakistan began importing LNG in 2015 to cater to growing domestic demand for natural gas, and declining production of indigenous gas. The demand for imported LNG in Pakistan is expected to grow steadily and reach 20 million tons per annum by 2022. As Pakistan's second LNG receiving facility in the country, this project delivers a key energy infrastructure project of high national importance.
BW Group is a major player in the maritime oil and gas industry, with a well-diversified fleet of over 150 vessels which includes LNG and LPG carriers, floating gas infrastructure, product tankers, FPSOs, dry bulkers, chemical tankers, and possesses a long-standing and best-in-class vessel management capabilities. This is BW's second FSRU project, with the first being a sister vessel, BW Singapore, which is currently based in Egypt on a five-year charter.
Mitsui is traditionally involved in various spheres of gas-value-chain business such as exploration, liquefaction of LNG, LNG transportation, LNG receiving terminals, on-shore gas distribution, gas-fired power plants, gas-chemical business, etc., in different parts of the world. Gas-value-chain business is identified as a core business for Mitsui in the new Medium-Term Management Plan "Driving Value Creation" that was announced last May. Mitsui aims to increase its presence in the growing FSRU business which has evolved to be the optimum solution in terms of considerations such as project execution timeline and cost competitiveness for newly emerging LNG markets, by leveraging its wide range of experience and expertise in various business in the gas-value-chain. Also, by entering the FSRU business, Mitsui aims to further expand its presence in the gas-value chain business to respond to the growing demand for gas related infrastructure in the newly emerging LNG markets in many parts of the world.