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Setting up an FRSU in India-III: The right business model
Jul 19: LNG Import terminal business models usually take the form of Integrated, Merchant or Tolling arrangements. Full details of how these models work are carried here.
8FSRUs are functionally identical to onshore terminals and can use any of these models.
8The tolling model seems to be the most popular as it provides a simple arrangement directly with the buyer and the leasing option fits well with shorter term contracts.
8The website carries here full details of possible contract structures.
8As for the contract period, the first FSRUs were typically leased on a 10-15 year basis. This gave the owner some reassurance of recovering the capital cost of the vessel and finance charges over the lease period. Analysis of the early FSRUs would indicate that 10 years was the minimum lease period and the day rate was calculated on the basis of recovering the capital costs and finance costs over 8 years with the remaining 2 years as profit.
8The range of lease periods now spans 5-20 years and is really driven by the gas market demand period.
8Leasing charges are typically in the range $110-160,000/day and with an OPEX in the range of $20-45,000/day, the total cost can vary between $130-205,000/day.
 Industry standard FSRUs are essentially limited to 173,000 m3 storage and nominal 6 mtpa throughput. Storage of 263,000 m3 can be offered but this has to be a bespoke model
8Capacities of up to 330,000 m3 FSRUs are also available.
8Whilst FSRUs are normally leased there is an opportunity to purchase outright subject to Contract arrangements.
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