MUMBAI: In the biggest yet new shipbuilding planned by an Indian company, Shipping Corporation of India Ltd (SCI) has called expression of interest(EoI) – on behalf of its proposed joint venture with three oil companies – from global shipyards to build eight very large gas carriers (VLGCs) of 88,000 cubic metre capacity each, six of which have to be built in a local shipyard, in a deal worth some $950 million.
Under the EoI, two VLGCs are planned to be built in an international shipyard having experience of delivering at least three VLGCs in the last five years. The balance six VLGCs will have to be built at a shipyard based in India by the same (global) shipyard through technical tie-up, collaboration, joint venture or strategic alliance, SCI wrote in the EoI.
The JV to be led by SCI with 50 per cent stake will have Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), Oil and Natural Gas Corporation Ltd (ONGC) and Sagarmala Finance Corporation Ltd as partners.
The JV intends to buy some 59 ships – through a combination of second-hand purchases from the market and newly built vessels from Indian yards – of various types such as very large crude carriers, VLGCs, Suezmax and Aframax tankers, medium range tankers and offshore vessels with an investment of as much as ₹15,000 crore over the next five years, a top official from the state-run carrier said previously.
Of the 59 ships, eight are VLGCs with Indian Oil Corporation needing four such tankers, and two each by Bharat Petroleum Corp and Hindustan Petroleum Corp.
Shipping Corp said it is working collaboratively with state-owned companies in the oil and gas sector to set up the JV company for purchasing, owning, operating, and managing various classes of vessels for EXIM and coastal shipping of crude oil, petroleum products and other hydrocarbon cargoes.
The EoI is being issued by SCI on behalf of the proposed JV company seeking offers from global shipyards (both Indian as well as international).
Chinese shipbuilders barred
Shipbuilders from China, the world’s largest shipbuilding nation, are barred from participating in the EoI in the wake of the July 2020 order issued by the Department of Expenditure in the Ministry of Finance. They will be allowed to bid only if they are registered with the competent authority.The EoI is intended to ascertain modalities and capabilities of shipyards for building two VLGCs in international shipyards and balance six VLGCs in India. Accordingly, through the EoI, shipyards having required infrastructure, technology and capability for building VLGC’s in India will be ascertained.
Based on the response, SCI will have the option either to invite bids from the applicants who have responded to the EoI or float a global tender enquiry to buy the tankers, according to the EoI.
“Indian and international shipyards can have a technical tie-up, collaboration, joint venture or strategic alliance to participate in the EoI.”
The shipbuilding contract will be executed between the successful bidder and SCI or the JV company of SCI.>
