The Hindu Business Line : Petronet gets nod to in-charter tanker

THE Director General of Shipping has granted permission for ten years to Petronet LNG Ltd (PLL) for in-chartering S S Raahi, a 1,38,000 cubic metre capacity LNG tanker, for hauling gas from Qatar to Dahej in Gujarat.

The in-chartering permission is from December 16, 2004 to December 15, 2014, a top official with the Directorate General of Shipping told Business Line. The approval to in-charter Raahi will enable PLL to seek clearance from the Reserve Bank of India (RBI) for release of foreign exchange towards payment of charter hire to the ship owning and operating company.

PLL had hired two 1,38,000 cubic metre capacity each LNG tankers from a consortium of Mitsui O.S.K.Lines-NYK Line-K Line-SCI on long-term time charter basis for a period of 25 years to transport gas from Qatar to Dahej at a charter hire rate of $68,900 per day for each of the two tankers. The charter hire rate comprise a non-escalation element of $57,900 and an escalation element of $11,000 linked to the United States Consumer Price Index (US-CPI) which would be revised on January 1 each year starting from 2005. The US-CPI linked escalation element in the charter hire rate has been capped at 3 per cent compounded annually.

The first of the two Malta-flagged LNG tankers, S S Disha, is already in operation since December 2003 ferrying gas from Qatar to Dahej, while the second tanker Raahi was taken delivery on December 16 and is on its way to haul its first parcel of gas to Dahej.

Petronet had inked a gas purchase agreement with Qatar's RasGas for buying 5 million tonnes per annum of LNG on free-on-board (f.o.b) basis for 25 years for its re-gassification terminal at Dahej. Since the LNG is being purchased on f.o.b basis, the responsibility of transporting the cargo rests with the buyer (PLL). While doing so, PLL will have to seek permission from the D G Shipping, as per law, for in-chartering foreign-flag LNG tankers into the country.

Though, PLL had applied for in-chartering permission for each of the two tankers from the D G Shipping for 25 years, the maritime regulator had initially granted approval for in-chartering Disha only for a year, which was subsequently extended by nine years. However, in the case of Raahi, the in-chartering approval has been granted for a period of ten years straightaway.

The in-chartering approval to Raahi is, however, subject to PLL adhering to the conditions stipulated by the D G Shipping in the guidelines issued in July this year for grant of licence to charter foreign-flag LNG vessels into the country. The permission is also contingent upon PLL paying a balance amount of Rs 6,60,00,00 as well as paying the difference of fee due to any revision, as and when due, for the relevant ten-year period.