Petronet LNG has sought fresh bids for the LNG transportation contract for its under-expansion Dahej terminal and the greenfield Kochi terminal.

The Union government has changed its stance of having Indian-flagged ships for LNG transportation, which has caused this re-bidding. On 1 December 2005, Petronet LNG had informally announced that a consortium of Varun Shipping, Indian Oil Corporation and Exmar of Belgium would be selected for the contract. The Varun Shipping consortium was amongst the three consortia shortlisted, the other two being those led by Shipping Corporation of India and Great Eastern Shipping.

However, with the relaxation in guideline, pure foreign companies could also apply. It is felt that with foreign companies in the fray, Petronet LNG might be successful in bringing down the transportation costs. The Indian shipping industry, it is widely felt, has a higher tax incidence rate than its global counterpart.

Also See:

Varun Shipping qualifies for LNG transportation (29-Apr-05)