The Hindu Business Line : Essar takes Fredriksen's hand for Petronet LNG deal

SHIPPING tycoon and arguably Norway's richest man, Mr John Fredriksen, has set his sights on India to capture a slice of the growing LNG shipping business in the country.

The Bermuda-based Golar LNG Ltd, of which Mr Fredriksen is the Chairman, President and major shareholder, has teamed-up with Essar Shipping Ltd to bid for the $600 million (about Rs 2,600 crore) LNG shipping deal of Petronet LNG Ltd (PLL), a company official has disclosed.

World Shipholding Ltd, a company indirectly controlled by Mr Fredrisksen, owns a majority 54.45 per cent stake in Golar LNG Ltd, which is listed on the Oslo Stock Exchange and on Nasdaq.

Golar LNG has also acquired a 14.6 per cent stake in Seoul stock exchange listed shipping company- Korea Line. Besides, it has a wholly-owned subsidiary in the UK called Golar Management (U K) Ltd.

Mr Fredriksen, also owns the world's largest tanker company, Frontline Ltd, based in Bermuda.

While leading domestic players such as Shipping Corporation of India (SCI), Great Eastern Shipping Company Ltd and Varun Shipping Company Ltd have joined hands with experienced global LNG ship owner/operators to qualify for the contract, Essar had so far maintained that it was bidding for the project on its own. A top company official had told Business Line after submitting the request for qualification (RFQ) on January 17 that the company had not named a foreign partner yet.

"We are qualifying for the tender on our own and are capable of handling the contract ourselves," he had said.

The Essar-Golar consortium is expected to give a tough fight to the other bidders including Mitsui O.S.K.Lines-NYK Line-K Line-SCI , Qatar Shipping Company-SCI, Malaysia International Shipping Corporation Bhd-GE Shipping, Teekay Shipping Corporation-G E Shipping and Varun-IOC combine.

PLL will hire three LNG tankers of 138,000 to 165,000 cubic metre capacity each (with option for one more) from the successful ship owning and operating consortium on a long-term time charter basis to haul gas to its expanded LNG terminal at Dahej in Gujarat and a new facility proposed at Kochi in Kerala.

Besides, the Essar-Golar venture has now emerged a dark horse to ship LNG for Shell's LNG terminal at Hazira in Gujarat, pipping other strong contenders such as SCI, Great Eastern and Varun. This would meet the Shipping Ministry's stand that an Indian company should participate in the LNG transportation project of Shell by holding a minimum stake of 26 per cent.

Golar LNG and Belgian natural gas shipping company EXMAR have set up a joint venture company based in London in October 2004 to combine part of their open LNG shipping capacity and improve the service available to their customers in the short term LNG market.

The two companies will each time charter selected owned vessels to the new venture, which will then offer them to the market.

This will provide a base for expansion which may include third party tonnage.

The new company will offer `new-to-the-LNG business' contracts of affreightment and interruptible employment arrangements that will enhance flexibility for customers and improve efficiency.

Incidentally, EXMAR has joined hands with the Varun-IOC consortium to bid for the PLL deal.

Gotaas-Larsen Shipping Corporation founded in 1946 entered the LNG business in 1970 and was acquired by Osprey Maritime Ltd, then a Singapore listed publicly traded company, in 1997.

In May 2001, World Shipholding Ltd. completed the acquisition of Osprey including its LNG shipping interests.

Golar LNG currently has a fleet of 16 LNG carriers including two new buildings of 145,700 cubic metre capacity each currently under construction at Daewoo Shipbuilding & Marine Engineering Co Ltd for delivery in January and May 2006, respectively.

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