Petronet LNG is planning to float a shipping subsidiary to haul gas to its liquefied natural gas (LNG) terminals.

Petronet proposes to have joint ventures with shipping companies and operators selected for transporting gas. The new subsidiary will hold 49 per cent stake in such ventures and the balance 51 per cent will be held by the ship owners and operators. The plan has already been cleared by the Petronet board

Initially, Petronet had two joint ventures for transporting gas to Dahej from Qatar. In the first joint venture, PLL held a 15 per cent stake each in two tankers, which it subsequently offloaded to RasGas of Qatar as per agreement. Currently, PLL has 3 per cent stake in the third tanker. The new subsidiary being set up will invest in the joint venture entities.

It is learnt that the company will require 10 new ships in the coming years, of which two new LNG ships will be required for re-gassification terminal of 2.5 million tpa capacity proposed at Kochi. With plans to raise the terminal capacity to 5 million tpa, PLL will require two more LNG ships depending on the quantity being sourced and for its existing Dahej terminal, the company will require additional three ships taking the total number to six once the capacity expansion is completed.

Currently, PLL is utilising 6.5 million tpa of capacity at its Dahej terminal, which is expected to expand up to 12 million tpa by 2009-10. PLL is optimistic about meeting the investment requirements for its shipping business through internal accruals. Funds required for building a ship will be about $260 million, and investments will be made depending on the equity stake.

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Petronet's Australian gas pact by December (07-Apr-07)