Essar Shipping arm to foray into PSV segment

TAG Sealogistics (TSL), a subsidiary of Essar Shipping, is planning to foray into the platform supply vessel (PSV) segment. TAG Sealogistics is eyeing acquisition of second hand PSVs to enter into this new market space.

PSVs are used to carry various heavy and oversized equipment to oil drilling offshore platforms in the sea.

At present, the company has presence in the offshore segment with 3 offshore supply vessels (OSVs) and 3 harbour tugs, that are used to support drilling operations.

TAG Sealogistics Chief Financial Officer Vinod Pendke confirmed the development but declined to divulge more details.

Industry analysts pointed out that PSV segment is most lucrative as a vessel would fetch $30,000 a day in the international market such as North Sea.

"Garware Offshore, Great Offshore, SICAL and other players have strong presence in PSV space. To add, shipyards are overbooked till 2009 for building new PSVs. Therefore, the only option could be going for second hand vessel, that would cost $25 million to $30 million," analysts pointed out.

The decision of foraying into PSV segment comes at a time when TAG Sealogistics bagged Rs 165 crore contract from Oil and Natural Gas Corporation (ONGC) for supplying 3 OSVs.

"This is a five year contract. Following this, we are planning further acquisitions of state-of-the-art OSVs and scouting for opportunities to deploy vessels in the West Asia and South East Asian markets. We may buy two new OSVs to deploy in the international market," Pendke said. According to industry sources, the rate of OSVs have gone up to touch $15,000 per day from $9,000 per day, a year ago.

TAG Sealogistics has also placed orders with ABG Shipyard for building three 80 tonne Bollard Pull Anchor Handling Tug Supply Vessels (AHTSV). All the three vessels will join TAG's fleet by December 2007.