The company would be fully owned by the ministry and operated by Petronet LNG which is planning to import the environment friendly fuel from Qatar, he said. Ramamurthy said the new shipping company could also provide its services to other private players operating in the LNG business. The details of the highly lucrative LNG business would be worked out shortly, he said but declined to elaborate on the strategy to be adopted by his ministry.The petroleum ministry's plan to enter the LNG business comes after it rejected the surface transport ministry's proposal for a joint venture between Shipping Corporation of India (SCI) and Petronet LNG fortransporting LNG.

The ministry had rejected the proposal of SCI, which already has a 20 per cent stake in Enron-Mitsui shipping venture, on the grounds that the state-owned company did not have any expertise in handling the volatile fuel. Moreover, SCI did not have any vessel of its own to transport LNG from overseas, ministry sources said.

"We have to go in a planned manner to purchase LNG ships. The ultimate aim of the petroleum ministry is to consolidate the existing state-owned oil companies into a sin gle national entity that would also deal in shipping," Ramamurthy said.

The Rasgas-Mobil consortium has mooted a proposal to Petronet LNG for forming a shipping company in Qatar to move 7.5 million tonnes of LNG to the Indian company's Dahej and Kochi terminals.

Petronet LNG has already entered into a memorandum of understanding with companies including Indian Petrochemical Corporation Ltd (IPCL), Gujarat State Fertilisers Corporation (GSFC), co-operative giant Kribhco, Chambal Fertilisers,Indo-Gulf Fertilisers and SPI Power Company to supply the imported fuel from Dahej terminal. The company, a consortium of Gas Authority of India Limited, Oil and Natural Gas Corporation, Indian Oil and Bharat Petroleum, is also exploring possibilities of tying up with end users like National Thermal Power Corporation (NTPC) and others for supplying LNG from its Kochi terminal.