Date:25/05/2006 URL: http://www.thehindubusinessline.com/2006/05/25/stories/2006052502290700.htm

Back SPVs for LNG carriers: Petronet shortlists 7 cos

Santanu Sanyal

Two vessels of 165,000 cbm capacity each for use at Kochi terminal

In the pipeline Petronet India has indicated to hold 49 per cent stake in the SPVs The source of supply of gas yet to be identified

Kolkata , May 24

Petronet India has shortlisted several shipping firms, including a consortium, for the purpose of floating two special purpose vehicles (SPVs) for acquiring and operating two LNG carriers for its proposed terminal at Kochi.

The firms include A P Moller, Exmar, Teekay, ETA Shipping, Pronav, Malaysian International Shipping Company and the consortium of the Shipping Corporation of India and three Japanese firms, namely, MOL, NYK and K Line. Discussion is believed to have started over technical bids.

It might be noted that the consortium of SCI and the three Japanese firms is already owning and operating two LNG carriers serving Petronet India's Dahej terminal and has been awarded the contract for the third vessel which is to serve the same terminal.

The two vessels to be acquired for LNG transportation to the proposed Kochi terminal will be of the capacity of 165,000 cbm each.

Petronet India has indicated to hold 49 per cent stake in the SPVs to be floated for the acquisition and operation of these vessels.

Source of gas supply

But nothing has yet been finalised just as the source of supply of the gas is yet to be identified.

The source, it is learnt, might not be Qatar; it could be Australia; it could even be Malaysia if MISC succeeds in securing the contract.

Qatar is the source of supply for Petronet India's present Dahej terminal.

Two vessels, "Disha" and "Rahi", of the capacity of 138,000 cbm each, are currently engaged in transportation of LNG from Qatar gas field.

The third ship, which will also serve the Dahej terminal, will also source the gas from Qatar. To be constructed by Samsung shipyard of Korea, the third ship will be larger in size, 153,000 cbm, and start operation in 2009.

A consortium of three Japanese firms, SCI, and Qatar Shipping owns and operates "Disha" and "Rahi".

The composition of the consortium, which will acquire and operate the third vessel will be slightly different.

Qatar Shipping will no longer be there; instead Qatar Gas Company might acquire stake in the SPV being floated for the third vessel.

This follows Petronet India's decision to hold a nominal stake in the proposed SPV.

Earlier, the plan was that Petronet India would hold 23 per cent.

Subsequently, the plan was changed and Petronet India allowed Qatar Gas to step in.

SCI plans

With the demand for LNG projected to rise in the country, SCI is mulling several options to form joint ventures for transportation of LNG.

Thus, it signed an MoU with Iran's National Iranian Tanker Company as early as January 2005 but nothing has happened since then. There was also a move to transport LNG from Iran to India in partnership with Irano - Hind, which is a joint venture between SCI and Islamic Republic of Iran Shipping Line, and GAIL (India) Ltd but that too has not made much headway.