24 July 2013 08:45 [Source: ICIS news]
KOLKATA (ICIS)--India’s national flagship carrier, Shipping Corporation of India (SCI) plans to acquire seven to eight vessels to build liquefied natural gas (LNG) transportation capacity of 6.0m-6.5 million tonne/year by 2017, a company official said on Wednesday.
The LNG vessels entailing investments ranging $200m-250m per vessel, depending on capacity, would be to facilitate shipment of LNG from GAIL India’s assets in the US, the official said.
The fleet acquisition could be directly by SCI or its shipping joint venture with GAIL India, for which an agreement was signed last month, he added.
In June GAIL India and SCI signed a memorandum of understanding (MoU) under which SCI would pick up equity in former’s shipping venture although the amount of equity investment was not yet decided.
However, SCI would be responsible for shipping in 3.5m tonne/year from Sabine Pass Terminal, Louisiana, US under GAIL’s agreement with Cheniere Energy Partners and 2.3m tonne/year from Cove Point, Maryland from terminal of GAIL Global USA LNG LLC, the official said.
SCI would be setting up an independent business vertical as the sole Indian carrier with expertise in LNG transportation and considering that the country would require additional 15-20 vessels to handle the projected LNG cargo of 50m tonne/year by 2017, up from current 18m tonne/year, he added.
SCI was a partner in several consortiums like Mitsui OSK Lines and NYK Lines and part owner in vessels leased to LNG Petronet.
However, SCI’s vessel acquisition plans could face roadblocks in securing government clearances since a Standing Committee on Transport of the Indian Parliament has passed strictures on vessel acquisition by the government-owned national carrier.
In a report published in May 2013, the Standing Committee noted that SCI posted a net loss of $71m during 2012-13 fiscal against a profit of $95m in the previous fiscal and that the company should put on hold acquisition of vessels till the company was able to bear the liability.
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