Petronet LNG to float shipping subsidiary

The Indian gas importer, Petronet LNG Ltd (PLL), plans to float a shipping subsidiary overseas to haul gas to its greenfield re-gassification terminal of 2.5 million tonnes per annum capacity proposed at Kochi in Kerala.

The diversification plan has been unveiled in the tender conditions stipulated by Petronet for selecting ship owners and operators for transporting LNG to the Kochi terminal. “The tender conditions says that Petronet may hold up to 49% stake in the company formed by the successful ship-owning and operating consortium. The balance 51% would be distributed among the ship-owners and operators. The subsidiary, to be registered in tax havens such as Cayman Islands or Malta, would thus become a deemed Indian shipping company,” an industry official pointed out.

This is a departure from the first two shipping tenders finalised by Petronet for hauling gas from RasGas in Qatar to Dahej in Gujarat, wherein it holds a 15% stake each in the first two tankers and 23% stake in the third tanker.

The recent tender floated by Petronet for time chartering two LNG tankers of 165,000 to 175,000 cubic metre capacity each from ship owners and operators to ship gas to Kochi for 25 years has attracted 14 bidders out of which seven have been pre-qualified. Those who have been pre-qualified includes state-run Shipping Corporation of India (SCI) with its longstanding Japanese partners Mitsui O.S.K.Lines-NYKLine-K Line, Malaysia International Shipping Corporation Bhd, A P MoellerGroup, German ship management firm Pronav, Teekay Shipping Corp, the consortium comprising Belgian natural gas shipping firm Exmar- Indian Oil Corporation-Gail and Dubai-based Emirates Trading Agency.