Oil & Gas Journal: Top Indian shipowners propose JV to ship LNG for Shell (ShellNews.net)

Shirish Nadkarni

OGJ correspondent

Posted 21 Oct 04

MUMBAI, Three of the top Indian shipowners—state-owned Shipping Corp. of India (SCI), and private-sector firms Great Eastern Shipping Co. Ltd. and Varun Shipping Co. Ltd., both of Mumbai—have proposed the formation of a joint venture to ship LNG to the $650 million LNG terminal being built by Royal Dutch/Shell Group at Hazira on the Gujarat coast.

The terminal, which will have an initial capacity of 2.5 million tonnes/year of LNG, is one of the largest foreign direct-investment projects in the country. It is slated to produce commercial gas by early 2005.

Present guidelines for LNG shipping projects in India require that long-term charters signed by any LNG importer should be with a company that has minimum Indian shareholding of 26%. This is the case of a joint venture floated for the terminal being developed by state-run Petronet LNG.

Thus far, this standard has been applied case by case but is likely to be formalized in the LNG shipping policy, due to be released soon.

SCI already has experience in LNG transportation by being a part of two joint ventures, which receive gas for Petronet LNG at its Dahej terminal in Gujarat. One of the two vessels is flagged in Malta and is already in use, while the other is to be delivered by January 2005.

While neither Great Eastern nor Varun Shipping had experience in LNG transportation, both firms operate LPG tankers.

Officials indicated that the Shell terminal would require one monthly voyage from an LNG vessel with a minimum capacity of 140,000 cu m. Running a single vessel on the job would be possible if the gas came from western Asia. However, a second vessel would prove necessary if Shell chose a more distant source.

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