The Hindu Business Line : Exmar to bid for Petronet LNG deal

BELGIAN natural gas shipping company Exmar will bid for building and operating three tankers for Petronet LNG Ltd (PLL) to haul gas to Dahej and Kochi terminals.

But Antwerp-based Exmar, one of the world's largest operators of LNG tankers, in which Belgium's Saverys family owns a little more than 50 per cent, is undecided yet on whether to take on-board an Indian partner to bid for the $600-million project.

"We will certainly bid for the project and probably join hands with an Indian partner. But, that is not decided yet," Capt. Peter Raes, Chief Operations Officer, Exmar N V told Business Line here.

First, Exmar is checking out whether its wholly-owned Indian ship management subsidiary TECTO N V is legally qualified to respond to the tendering process of PLL.

"We are still finding that out. We have had discussions with PLL officials in this regard. But, opinions are different. It is not 100 per cent clear if we need an additional Indian partner or not," Capt. Raes noted.

He said that Exmar was "looking at how far" it needs an Indian partner, though it may "not need one" to qualify for bidding.

"Exmar has the requisite operating experience stipulated by PLL. If our Indian subsidiary qualifies for bidding on its own, we may not need another Indian partner at all. Otherwise, we will have to locate one," he said.

As per the norms issued by the Director-General of Shipping, licence for chartering LNG tankers into the country will be granted only if they are registered under the Indian flag and are owned either wholly by an Indian entity or an Indian partner owns not less than 26 per cent equity in the company owning the LNG carrier.

According to Capt. Raes, registering LNG tankers under the Indian flag has now become an "attractive proposition" with the introduction of the tonnage tax by the Government from this fiscal.

He was in Delhi between November 30 and December 2 along with Mr Olivier Gossieaux, Managing Director LNG, Exmar, Mr Leo Cappoen, senior Advisor and Mr Najd Javadipour, Chartering Officer, to market its new shipping system christened Energy Bridge which enables ships to gassify LNG on board.

This can discharge the gassified LNG directly into the pipeline grid from a single buoy mooring (SBM) facility without the requirement of a terminal.

The Exmar team made a presentation in this regard to the Shipping Secretary, Mr D.T. Joseph, on November 30.

"We want to market these LNG ships in India. This system is a good alternative up to a certain limited capacity and for short distance voyages. It can be used as a temporary measure till the market for LNG develops to absorb larger capacity. But for bigger capacities, terminal is a better option," he said.

The Energy Bridge system was designed by the US utility El Paso Corporation to overcome difficulties in obtaining permits to build land-based LNG storage in the US after the events of September 11, 2001.

In February 2003, El Paso exited from the LNG business, which was taken over by Excelerate Energy, a Texas-based newly formed subsidiary of George Kayser Oil Company.

Exmar has ordered three LNG tankers of 1,38,000 cubic metre capacity each from South Korea's Daewoo Shipbuilding & Marine Engineering Company Ltd under the Energy Bridge system all of which have been time-chartered for 20 years to Excelerate for trading in the US Gulf, Capt. Raes disclosed.

The first of these ships Excellence will be delivered in January 2005, the second in late 2005 and the third in mid 2006.

Exmar had bid for the contract to ship LNG to PLL's Dahej terminal (First Phase) in association with Great Eastern Shipping Company Ltd and emerged second after eventual winner Mitsui O.S.K. Line-NYK Line-K Line-SCI consortium.

After the de-merger from its parent, the Belgian shipping company CMB in June 2003, Exmar is now a separate company listed on Euronext, Brussels.

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