PLL had on February 8 advertised for global prequalification of ship owners and operators for LNG transportation. Though the stiff threshold criteria ruled out the participation of domestic shipping companies, PLL said that in order to promote their interest, any foreign company bidding would have to tie up with an Indian company.

Out of the 11 shipping companies, nine companies have been shortlisted. These are Hyundai, Samsung and Hanjin of South Korea, Mitsui OSK Lines and K Line of Japan, Malaysian International Shipping Company, Louis Dreyfer of France, Osprey of the US and Exmar from Belgium.

Great Eastern Shipping Company, Shipping Corporation of India (SCI), Varun Shipping and Essar Shipping are among the Indian companies which have envisaged interest in tying up for the contract.The ministry's earlier request to have a 50 per cent Indian ownership in joint venture had been rejected by PLL since it would have not been acceptable to the foreign companies. The ministry had maintained that an insignificant equity partnership of less than 20 per cent should not be acceptable.

SCI participation through a 20 per cent equity, amounting to $11 million, ina shipping joint venture with Mitsui OSK Lines, Japan, and Atlantic Commercial Finance Company, an affiliate of Enron, had also led to doubts being raised about its role. The JV would be transporting LNG for Dabhol Power Company in Maharashtra from September 2001.

Six LNG terminals, including one set up by Enron, are slated to come up in the next few years. PLL, a joint venture of Indian Oil Corporation, Gas Authority of India, Oil and Natural Gas Commission and Bharat Petroleum, is setting up LNG regasification terminals at Dahej in Gujarat and at Kochi in Kerala with an initial capacity of 5 mmtpa and 2.5 mmtpa, respectively.

Around 10-12 vessels would be needed by the various plants over the next 10 years for the required LNG. As per the present rates, which have fallen in the past few months, a vessel of 135,000 cubic metre (62,1000 tonne) capacity is estimated to cost $150 million to $180 million. Domestic companies would need to tie up with foreign ones for investment of such magnitude. PLL is in a long-term LNG sale and purchase agreement with Ras Laffan Liquefied Natural Gas Company (Rasgas) of Qatar for 5 mmtpa of LNG with the option for a further 2.5 mmtpa of LNG on fob for 25 years. The LNG supply of is expected to commence from July 2003.

PLL plans to time charter three LNG tankers of 138,000 cubic metre capacity for shipping of 5 mmtpa LNG from port of loading at RasGas in Qatar to Dahej and 2.5 mmtpa LNG to Kochi from ship owners and operators with experience in owning and operating LNG tankers of at least 125,000 cu.m capacity. The threshold criteria for the contract includes an equity ownership in one or more LNG tankers each of capacity not less than 125,000 cu.m and experience in operating and managing one or more LNG tankers each of capacity not less than 125,000 cu.m.