The Hindu Business Line : Dolphin Offshore gets LI for Gujarat shipyard project

Greenfield plans
Dolphin Offshore plans to set up this shipyard over a 100-hectare piece of land and will come up in three phases.
After completion of the construction, the shipyard will be capable of dry-docking jack-up rigs, apart from constructing bigger ships.

Amit Mitra

Mumbai April 8 Offshore service provider Dolphin Offshore Ltd moved a step closer towards the take off platform for its proposed Rs 400-crore greenfield shipyard project in Gujarat, with the company having received the Letter of Intent by the Gujarat Maritime Board for setting up the project at Jafrabad.

The company has also received the no-objection certificate from the Gujarat Government and on the basis of this it can lease Government land, company officials said.

Dolphin Offshore plans to set up this shipyard over a 100-hectare piece of land — of this, the Government is expected to lease out 56 hectares and the balance will be acquired privately. The project will be implemented in three phases.

The first phase will involve an investment of about Rs 60 crore, which will be used to set up a fabrication yard for Dolphin’s EPC contracts, shipbuilding yard with slipway, machinery shops and office block. This phase will commence immediately upon receipt of the necessary licences and clearances from the Government including environmental clearance, the officials said.

The second phase, involving an investment of Rs 70 crore, will commence after the shipbuilding activities begin and will include the construction of the necessary jetties and outfitting berths as well as additional infrastructure required. This phase is expected to cost Rs 70 crore.

The third phase is estimated to cost Rs 270 crore and will involve setting up of repair facilities for ship and offshore drilling units.

Dry-docking

After completion of the three phases of construction, the shipyard will be capable of dry-docking jack-up rigs, apart from constructing bigger ships. In fact, no shipyard in India can currently service the giant jack-up rigs used for offshore oil exploration. At present, oil exploration companies, including ONGC, are forced to tow their jack-up rigs all the way to the nearest shipyards in Dubai for servicing.

“It takes 14 days for the rig to reach Dubai shipyard and another 14 days to tow it back to India, which means a loss of 28 days of just travel time. Given the fact that the rigs at present command a daily hire rate of $2,00,000, you are talking about a loss of $5.6 million just to ferry the rig from India to Dubai and back,” an official said.

With more than 60 such rigs in operation in the Indian offshore sector, Dolphin Offshore sees tremendous potential in this space.

The shipbuilding sector is expected to witness significant investments, with the industry expecting the present boom in the market to last at least till 2011. Even shipping companies are planning to get into shipbuilding – Shipping Corporation of India plans to set up a facility with a joint venture partner and talks are on with some Korean shipyards, while Mercator Lines has put on its drawing board plans to build a $247-million yard at Palghar in Maharashtra.

It is estimated that private ship building companies are planning to invest about Rs 18,500 crore in the next five to seven years. L&T and Pipavav Shipyard lead the list with a capital expenditure programme of Rs 3,000 crore each, followed by Good Earth Marine Group with Rs 2,000 crore and ABG Shipyard, Adani Group and Bharati Shipyard with Rs 1,500 crore each.

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