This is said to be the first time that an arrangement of this kind has been put in place of import of LPG. Analysts say the arrangement, if it works well, may herald a new era for the shipping industry.

According to Shipping Corporation chairman PK Srivastava, the arrangement will avoid competition between the companies. "The idea was not to slit each other's throat as all of us were competing for the same cargo," he said.

The arrangement, which came into force on June 1, will initially be implemented for six months. "We want to see how fairly the arrangement works," a Shipping Corporation official said. Suitable adjustments may be made in the days to come to streamline the system.

As the companies do not foresee any substantial increase in LPG imports in thenear future, changes will be made in the `pool' only towards the end of the year.

The three companies have also come to an understanding that no fresh acquisition of LPG carriers will be made for six months.

"We have agreed not to deploy any more LPG carriers as induction of an additional vessel can create an imbalance in the arrangement," hesaid.

The corporation official, however, clarified none of the three companies would deploy a new vessel on the coastal waters even if one of them were to acquire an LPG vessel.

Hence, Varun Shipping, which is slated to acquire a second-hand 30,000-tonne LPG carrier costing around $16 million some time next week, will employ the ship for international trading.

Shipping Corporation has two LPG carriers of 13,000 tonnes (or 22,000 cubic metres) each. Varun, too, has two 13,000 tonnes LPG vessels, while Gesco has one 18,000-tonne carrier.

The three companies expect a surge in LPG imports after the commissioning of new LPG jetty (of 5 lakh tonnes a year capacity)of HPCL at Vizag. After the fire at HPCL's refinery, the company had stopped using its terminal. The construction of the new jetty will be expedited, so that LPG imports start pouring in after six months, he said.

The arrangement will offer an `equal partnership' to all the three companies, Shipping Corporation bulk carrier and tanker division director KM Joseph said. According to him, each company will get an equal opportunity to share the cargo.

As per the arrangement under the `pool', the three companies will `queue up' for procuring the LPG cargo instead of bidding for it at the same time.

Unlike the preference given to Shipping Corporation for import of crude oil, the company will not be allowed to hire or charter a private or foreign vessel to import excess LPG.

Shipping Corporation is the nodal agency for crude oil import and not for LPG imports, Joseph said. He said that negotiations were on between the corporation and Indian Oil to arrive at a market-related freight mechanism to determinethe rates for transporting crude oil. An agreement, which will be revised every three months, will be entered into within two weeks, he said. The agreement will be based on the monthly average rates tendered by the London Freight Brokers' Association.