The Hindu Business Line : Mitsui, Exmar in race for Petronet LNG deal

Shipping needs
Petronet, through its proposed shipping subsidiary, plans to have joint ventures with shipping companies and operators.
The company would require 10 new ships in the coming years.

New Delhi June 3 The consortia of Mitsui, Exmar, MISC, and K Line are in fray to bag the shipping contract from Petronet LNG Ltd (PLL) to haul gas to its liquefied natural gas (LNG) terminals.

Petronet, through its proposed shipping subsidiary, plans to have joint ventures with shipping companies and operators selected to transport gas for it.

Tendering Process

The new subsidiary would hold 49 per cent stake in such ventures and the ship owners and operators would hold the balance 51 per cent. A senior PLL official told Business Line that the companies have been shortlisted through a global tendering process. "We have given our specifications and the companies have to come back to us by June 30," he said.

This would be around the same time when PLL is expected to award the engineering procurement contract (EPC) for its Kochi LNG terminal, since the requirement of ships would arise only after the terminal is ready.

PLL plans to charter two LNG tankers of 1,65,000 to 1,75,000 cubic-metre capacities each from ship owners and operators to ship gas to Kochi for 25 years.

Incidentally, in its bid document, PLL had also unveiled its plans to diversify into shipping business. Funds required for building a ship would be about $260 million, and investments would be made depending on the equity stake, he said.

Currently, PLL is processing the EPC bids for the LNG terminal.

The consortia, which have technically qualified for EPC are IHI, SN Technigaz, and Sofregaz. The official said that PLL was hopeful of opening the price bids by June 30 for the proposed 2.5-million tonne per annum (mtpa) Kochi terminal. While, the construction of a terminal takes about four years, construction of a ship takes about two-and-half years. The Kochi terminal is expected to come up by 2010.

The official said that the company would require 10 new ships in the coming years. To begin with, it requires two new LNG ships for its greenfield re-gassification terminal of 2.5 mtpa capacity proposed at Kochi.

With plans to raise the terminal capacity to 5 mtpa, PLL would require two more LNG ships depending on the quantity being sourced. For its existing Dahej terminal, the company would require additional three ships taking the total number to six once the capacity expansion is completed.

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