Exmar-Varun-IOC consortium wins Petronet deal

Petronet LNG will hire a third liquified natural gas (LNG) ship
from a consortium of Belgium-based Exmar, Varun Shipping and Indian Oil Corporation (IOC) at a day rate of about 82,000 dollars to increase LNG imports to 7.5 million tonne by 2009-10.

The consortium bid the lowest in the Petronet tender for time chartering a 1,56,000 cubic meters capacity LNG tanker when the bids opened yesterday, a top company official said.

Petronet currently uses two 1,38,000 cubic meters capacity LNG ships - Disha and Rahi - from a consortium of Mitsui OSK-Shipping Corporation of India-NYK Line-Qatar Shipping for ferrying five million tonne of lng from Qatar.

"The Exmar-led consortium beat the Mitsui-led consortium for the job," the official said, adding the tender award is to be ratified by the company board.

The third ship, to be delivered in September 2009, would ferry the additional 2.5 million tonne LNG Petronet is to import from RasGas of Qatar.

The official said Petronet will take 23% stake in the shipping consortium, which plans to build the ship at Daewoo's shipyard in South Korea at a cost of about $200 million.

While IOC and Varun Shipping will have 26% stake in the new firm, Exmar will hold the remaining 25%.

Petronet had hired Disha and Rahi from Mitsui at 69,000 dollars per day rate (translating into 0.26 dollar per million british thermal unit). The third tanker would come at a day rate of about 82,000 dollar of which 68,000 per day is fixed, and the remaining is the variable component, he said.