Essar eyes Petronet LNG order

As many as seven shipping companies, including Essar and GE Shipping have evinced interest in shipping Liquefied Natural Gas (LNG) for the Rs 2,000-crore Petronet LNG Ltd (PLL) terminal at Kochi.

Other shipping companies that have bid for the project include Varun Shipping, Malaysia Petronas and Qatar Shipping.

For construction of the terminal, 11 companies including Larsen & Toubro, Hyundai Engineering and a French company, Scipen have submitted their bids. In addition, a Japanese firm that had built the company's Dahej terminal, Harima Heavy Industries Company Ltd is also in the race.

The terminal, which had been pending for around five years was approved by the Petronet board in October. The company has already tied up an annual supply of 2.5 million tonne (mt) of LNG with the national company of Qatar, Ras Laffan LNG Company Ltd (RasGas) for a period of 25 years.

This is for the first time that the terminal would have to keep in mind the new guidelines issued by the Directorate General of Shipping, which makes it mandatory for the firm shipping LNG to have a 26 per cent Indian participation.

Speaking to Business Standard, PLL managing director and chief executive Suresh Mathur said that the company was ready to abide by the DG Shipping guidelines.

The shipping arrangement of the existing PLL terminal at Dahej in Gujarat was tied up with a consortium of four companies in March 2001 for 25 years with public sector Shipping Corporation of India(SCI) being the only Indian company with a 34 per cent stake.

The other three are Japanese companies including, Mitsui O S K Lines Ltd, Nippon Yusen Kabushiki Kaisha Line and Kawasaki Kisen Kaisha Ltd.

The Kochi terminal would come up on 40 hectares of land allocated by the Kochi Port at nearby Puthuvypeen.

The company has compeleted all the pre-project work invovling Rs 32-crore investment and requisite environmental clearances.

PLL was formed in July 1997, with equity participation from Oil and Natural Gas Corporation, Indian Oil Company, Bharat Petroleum Corporation Ltd and Gail ( India) with an authorised capital base of Rs 1,200 crore.

The company has already has an LNG terminal at Dahej in Gujarat. Rasgas supplies 5 million tonnes of LNG a year to the terminal, and it received its first LNG cargo in January this year.

For the Dahej Terminal, shipping arrangement was made with a consortium of 4 companies in March 2001 for 25 years with Shipping Corporation of India being the only Indian company. The other three are Japnese companies including, Mitsui OSK Lines Ltd, Nippon Yusen Kabushiki Kaisha Line and Kawasaki Kisen Kaisha Ltd.

The company has already signed an agreement with Gail, Indian Oil Corporation and Bharat Petroelum Corporation Ltd for selling 5 mt per annum of regassified LNG from both terminnals at Kochi and Dahej.The gas would be marketed in states of Gujarat, Madhya Pradesh, Rajasthan, Uttar Pradesh, Delhi and Haryana through the HBJ pipeline.