KARMOL clinches $71m loan for FSRU project in West Africa

Japanese financial behemoths are lining up behind LNG-to-electricity project in Senegal.

A Japanese-Turkish joint venture has secured financing for a delayed FSRU project in Senegal.

KARMOL, a cooperation between Mitsui OSK Lines (MOL) and Karpowership, said on Wednesday it signed a loan agreement with two major Japanese banks for the FSRU, with a volume of up to $71m.

The lenders in question are MUFG Bank, described as Japan’s largest financial institution, and the Japan Bank of International Cooperation (JBIC), a state lender backing international projects and providing export credit.

KARMOL unveiled no further details on the loan’s duration and terms.

The money is to back the employment in Senegal of the 125,000-cbm KARMOL LNGT Powership Africa (built 1994), which arrived in the West African country last year.

The FSRU is to supply LNG to the 235-MW powership Karadeniz Powership Aysegul Sultan, a vessel stationed off Dakar and controlled by Karpowership.

The Turkish company signed an LNG-to-power contract with Senegal’s Electricity Authority (SENELEC) as early as August 2019, just a few months after teaming up with MOL to jointly develop such projects.

According to Karpowership, the Karadeniz Powership Aysegul Sultan embarked on its 5.5-year contract in October 2019 and has been since supplying 15% of Senegal’s electricity.

The FSRU to go with it, however, only arrived in Senegal in June last year.

At the time, Karpowership indicated that the FSRU would receive its first LNG volumes in July.

In the meantime, however, natural gas prices soared to record levels, escalating prices for buyers from LNG-to-power projects to unattractive levels and delaying start-ups.

The first time that one of KARMOL’s FSRUs took on commercial LNG volumes to feed gas to associated powerships was in October last year, when the 127,542-cbm FSRU KARMOL LNGT Powership Asia (built 1991) took on a load to supply a quartet of powerships in Sepetiba Bay, Brazil.

KARMOL is also converting a third LNG carrier, the 127,000-cbm LNG Vesta (built 1994), into an FSRU in Singapore.

Karpowership has additionally acquired a TotalEnergies LNG carrier, the 154,472-cbm LNG Unity (ex-Provalys, built 2006).

According to its website, Karpowership has a fleet of 36 powerships that operate on four continents with a power generating capacity of 6 gigawatts (GW).

The company has said it plans to switch its entire fleet of Powerships to LNG, a fuel it calls “sustainable, affordable and environmentally responsible”.

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