Shipping Corp plan to float JV gets Cabinet approval

The government on Saturday gave its approval to state-run shipping giant Shipping Corporation of India (SCI)'s plan to invest $20.88 million for 33.77 per cent stake in a joint venture company in Panama.

The joint venture will be formed for the expansion of Petronet LNG Ltd (PLL)'s terminal at Dahej, said Union information and broadcasting minister Priyaranjan Dasmunsi said after a cabinet meeting.

Other partners in the joint venture are Mitsui OSK lines of Japan with a stake of 33.77, Nippon Yusem Kabushiki Kaisha with a share of 21.64 per cent and Kawasaki Kisen Kaisha 10.82 per cent stakes respectively.

The share of SCI in the JV may go down to 26 per cent if PLL or its nominee exercises the option to take up 23 per cent share in above JV, the minister added.

Besides earning a share of profit to be generated in 25 years of the time charter agreement, the SCI would be the only Indian shipping company to venture into the second LNG transportation business.

"By participating in the management, SCI will be able to train and develop its officers which would be useful for future projects."

PLL was formed by the government in 1998 to set up LNG receiving, storage and re-gasification terminals in the country. These four public sector companies have an equity participation in equal parts to the extent of 50 per cent.

While an initial quantity of 5 million metric tonne per annum (mmpta) is being transported on two LNG tankers also owned by joint venture companies, where SAI is already participating with Mitsui OSK Lines, Nippon Yusen Kabushiki Kaisha Lines, Qatar Shipping Company and Kawasaki Kisen Kaisha, the proposed joint venture will be formed to transport the additional quantity of 2.5 mmtpa required for PLL's expansion project at its Dahej terminal.