Domestic shipowners will meet officials of the ministries of shipping and finance and the Prime Minister's Office (PMO) to urge them insist on equity participation in the LNG haul as the government proposes to relax the liquefied natural gas (LNG) import guidelines. |
"We will meet key government officials tomorrow to stop the move to give purchaser the choice of LNG transportation, FOB (free on board) or CIF (cost, insurance and freight)," a senior industry official said. |
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He said, "LNG is going to be an important fuel for India in the future and the country should have control over its transportation. This will be possible only through equity participation of domestic companies. Without this, the country may face a risk of energy security also." |
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At present, director general of shipping (DG shipping) allows LNG imports only on an Indian flag vessel or a domestic company holding a minimum of 26 per cent ownership in the ship. |
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However, the government is planning to relax the guidelines. This may benefit companies, such as Royal Dutchhell, which want to bring fuel on their own ships. |
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"We have already appraised the government of the need to ensure imports of a strategic commodity like LNG on FOB basis only, a practice followed by major importing countries such as Japan, Korea, Spain and China," he said. |
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Sources in the shipping industry feel that the government should encourage domestic shipping companies to enter the LNG sector as it is highly technical and capital intensive. |
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"Indian shipowners do not a have single LNG ship at present. The only way they could participate in the LNG haul is to partner with global player in the initial phase," a source said. |
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Meanwhile, shipping companies, including the Shipping Corporation of India(SCI), Great Eastern Shipping Company, Essar Shipping and Varun Shipping Company, have partnered with global players bidding for LNG projects of Petronet LNG (PLL) at Dahej and Kochi and Shell's Hazira project. |
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