India’s state-owned companies Shipping Corporation of India (SCI) and GAIL are planning a joint venture, as part of which GAIL will acquire nine LNG ships in a deal valued at around $3bn.
According to SCI director (liner and passenger services) Sarveen Narula, the company will have a stake of up to 25% in the joint venture company once it formed and the vessels will be operated by SCI, The Economic Times reported citing PTI.
Narula said: "The Memorandum of Understanding is being finalised.
"We have already been in talks with them. Very soon it will be done. It is brokered through the government."
Each vessel is expected to cost around $300m to $350m and GAIL will fund for this, Narula said.
SCI is also seeking permission from the central government to start an overseas subsidiary in Singapore for shipping LNG to India.
The company currently operates four LNG ships in a joint venture with Japanese partners in which it has a 26% stake in the partnership. SCI now owns and operates around one-third of the Indian tonnage and it is the only Indian company operating break-bulk services, international container services, liquid / dry bulk services, offshore services and passenger services.
During the last financial year, GAIL had acquired 25 LNG cargoes in order to meet the domestic gas requirement.
GAIL is engaged in transport through pipeline, manufacture of basic chemicals, fertiliser and nitrogen compounds, plastics and synthetic rubber in primary forms, the extraction of crude petroleum and natural gas, electric power generation, transmission and distribution.