SCI would preferably go in for two Suezmax tankers and a cape size bulk carrier. However, SCI director (bulk carriers and tankers division) KM Joseph told The Financial Express that the entire acquisition process would depend upon the right offers since it is very difficult to scout for seaworthy ships at a fair price. The ship prices in the second-hand market too have spiralled with increase in freight rates.

According to Drewry, an independent consulting and publishing organisation specialising in shipping, in June 2000 a 10-year old second-hand cape size vessel would cost around $15 million while five year old Suezmax Oil tanker would cost around $40 million.

The company plans to encash on the improved freight market worldwide by undergoing the rigourous process of approvals required for acquiring second hand ships, Captain Joseph added.

However, as a policy matter SCI has always preferred to go in for brand new ships, he said.

The tender for deploying vessels for transporting petroleum products was finalised last week by Indian Oil Corporation (IOC) which is opting for 20 vessels on behalf of the oil industry.

On the product tankers with IOC, the company is likely to scrap one tanker, resulting in the deployment of six tankers and reducing the over all strength to 11 product tankers, Captain Joseph said.

Besides the seven product tankers with IOC, SCI has also pressed into service two MR size product tankers as crude carriers. The MR size product tankers are operating outside the time charter employment of the Oil Industry as per the tender process, he said.

The remaining three product tankers are deployed by SCI outside India and earns a 15 to 20 per cent premium in freight than those on charter with IOC.

The revenues from product tankers constitute around 10 per cent of the company's total turnover, Captain Joseph added.

The rest of the tankers are believed to have been deployed from GE Shipping, Essar, Varun, Century, Sanmar and Prathiba.

On the Petronet LNG bidding, Captain Joseph said that the consortium formed to bid for Petronet LNG transportation project would have a debt equity ratio of 70:30 and the equity structure would be finalised once the bidding process is completed. Captain Joseph said that SCI has been asked to reduced its holding to the same level as the foreign shipping line in the SCI-Mitsui-NYK-K Line. As per the tender terms of Petronet's LNG transportation, no Indian company with a majority stake will be entertained as a bidder.