Financial Daily from THE HINDU group of publications
Sunday, Dec 25, 2005
Logistics - Shipping
SCI consortium emerges lowest bidder for Petronet LNG deal We are set to win the contract, says Hajara
Bangalore , Dec. 24
THE consortium comprising state-owned Shipping Corporation of India (SCI) and three Japanese shipping lines Mitsui O.S.K Lines, NYK Line and K Line is set to win the Rs 3,200-crore deal from Petronet LNG Ltd to haul additional quantities of LNG cargo from RasGas in Qatar to its expanded terminal at Dahej in Gujarat.
The consortium has quoted the lowest charter hire rate of $72,880 per day for transporting gas by deploying a 155,000 cubic metre capacity foreign-flagged LNG tanker, when the revised price bids were opened by Petronet on Friday.
PLL will hire the LNG ship from the successful ship-owning and operating consortium on long-term time charter basis spanning 25 years to ship an additional 2.5 million tonnes per annum of LNG to Dahej.
"We have emerged the lowest bidder and are set to win the contract," Mr S. Hajara, Chairman and Managing Director, SCI, told Business Line.
The charter hire rate quoted by the consortium includes a non-escalation element (capital costs) and an escalation element (operational costs) that is linked to the US consumer price index capped at 3 per cent annually. This means the escalation element of the charter hire rate would be raised by 3 per cent on January 1 every year after the carrier starts operations.
This will be the second LNG shipping deal for the SCI-Japanese shipping lines consortium.
For the first phase of the Dahej terminal project, Petronet had hired two LNG tankers from the same consortium at a charter hire rate of $68,900 per day for each of the two tankers named Disha and Raahi for moving gas from Qatar.
The board of Petronet met in Kochi late on Friday and opened the revised charter hire rates quoted by the three bidders using a foreign flag LNG carrier to haul the cargo. In the earlier round, the bidders were asked to quote the charter rates on the basis of deploying an Indian flag LNG vessel in line with the norms issued by the DG (Shipping) in July 2004 for transporting LNG into the country.
Petronet LNG Ltd had asked all the three bidders who had submitted the techno-commercial bids in the earlier round to re-submit their price bids by December 20 after granting them flexibility/freedom to deploy a foreign flag LNG tanker to transport LNG.
By doing so, Petronet has succeeded in driving down charter rates.
Great Eastern Shipping Company Ltd, which had bid in association with Bahamas-based Teekay Shipping Corp, emerged second, while the consortium comprising Belgian natural gas shipping firm EXMAR, Varun Shipping Company Ltd and Indian Oil Corporation finished third.
The EXMAR-led consortium had emerged the lowest bidder in the first round.
But, Petronet surprisingly decided to set aside the bids submitted by all the three parties following a directive from the Cabinet Secretariat to keep the LNG transportation guidelines issued by the DG (Shipping) in abeyance.
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