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P. Manoj

New Delhi , Jan. 20

STATE-OWNED Indian Oil Corporation (IOC) has entered the liquefied natural gas (LNG) shipping sector by aligning with the consortium of Varun Shipping Company Ltd and Belgian natural gas shipping firm Exmar to bid for the LNG shipping deal of Petronet LNG Ltd (PLL).

"Varun-Exmar-IOC combine has submitted a request for qualification (RFQ) to PLL before the deadline for submission closed on January 17," company sources confirmed. The exact quantum of equity to be held by IOC in the consortium could not be ascertained.

PLL has received RFQs from six consortia comprising foreign and domestic shipping companies to undertake the project.

These are Malaysia International Shipping Corporation Bhd-Great Eastern Shipping Company, Teekay Shipping Corporation-Great Eastern Shipping Company, Mitsui O.S.K.Lines-NYK Line-K Line-Shipping Corporation of India, Qatar Shipping Company-Shipping Corporation of India and Varun Shipping Company Ltd-Exmar-IOC.

Essar Shipping Ltd has also submitted an RFQ on its own without joining hands with a foreign partner.

Petronet has incorporated an option to take a 23 per cent stake in the successful ship-owning and operating consortium or any other company designated by PLL.

Petronet will hire three LNG tankers of 1,38,000 to 1,65,000 cubic metre capacity each on a long-term time charter basis to haul gas to its expanded LNG terminal at Dahej in Gujarat and a new terminal facility being built at Kochi in Kerala.

The quantum of equity to be held by the domestic partners in the consortia will depend on whether Petronet exercises its option to hold a 23 per cent stake in the ship-owning and operating company, an industry source said.

"There is a big question mark on whether Petronet will exercise the option of taking the 23 per cent stake or not. Hence, it is too early to decide on the share-holding pattern among the joint venture partners.

However, we are governed by the guidelines issued by the Director General of Shipping on chartering of LNG tankers that a domestic shipping company should hold a minimum stake of 26 per cent in the joint venture tanker-owning and operating company for securing the chartering licence," he said.

The exact quantum of equity to be held by different joint venture partners is a "matter of detail," which will be decided later.

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