India prepares groundwork for constructing Very Large Gas Carriers locally
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The government is laying the groundwork for constructing five so-called Very Large Gas Carriers (VLGCs) locally with a Ship Technical Advisory Committee set up by an inter-ministerial Joint Working Group (JWG) finalising the technical specifications of the vessels that are used to haul Liquefied Petroleum Gas (LPG).'The Ship Technical Advisory Committee (STAC) has finalised the technical specifications of the VLGC to be built at Indian shipyards at a meeting on Tuesday. It will be submitted to the JWG soon to take the plan forward,' said a source briefed on the development.It costs some $120-125 million to build a 93,000 cubic metre VLGC from scratch in the current market.The STAC had done a similar exercise previously for building Medium Range (MR) tankers.The finalisation of the VLGC technical specifications comes in the wake of opposition from the Indian National Shipowners' Association (INSA), a lobby group for local fleet owners, on constructing MR tankers locally.INSA has told the government that there are an adequate number of MR tankers operating under the Indian flag to meet the requirements of the oil companies. Hence, it suggested that the government could look at 'other sectors and segments' of shipping where India is facing a shortfall such as VLGCs. India, according to INSA, has more than 30 MR tankers in its fleet against the requirement of some 18 such ships by the state-run oil companies.'INSA is against building ships locally. For some strange reasons, they prefer to buy second hand ships from abroad,' the source said.'INSA doesn't want the MR tankers to be manufactured here. They are saying you go for VLGC because there is no requirement for MR tankers,' the source disclosed.INSA's stand was not acceptable to the government.'Today there may be no requirement for MR tankers but by the time these tankers are built by 2030 there will be a requirement plus there will be an increase in business after five years. Who is going to fill this gap,' the source asked.Further, 21 of the more than 30 MR tankers operating under the Indian flag are old and have to be replaced over the next 5 years. Who will build the ships and when will India create shipbuilding facilities,' he said.'INSA has a single agenda: to buy second-hand vessels from abroad. That is why they are looking to block the construction of MR tankers locally. So, much work has been done, including finalising the technical specifications of the MR tankers, which was submitted to the government. Even then they are not in favour of building MR tankers here,' the source noted.This is said to be one of the reasons why Indian Oil Corporation Ltd (IOCL) has delayed floating a tender to buy 10 MR tankers from Indian yards, for which the Prime Ministers' Office (PMO) had set a June 15 deadline.'The PMO gave a clear order, whatever it may be, to float the tender by 15 June,' the source revealed.The top brass of the Ministry of Petroleum and Natural Gas is understood to have told a JWG meeting in early June about the deadline set by the PMO and wanted the tender process to be expedited.As the state-run oil companies dithered on the way forward citing high project costs and other issues, a top MoPNG official is believed to have said at the JWG meeting that the order has come from the PMO and the tender has to be issued.The oil companies were categorically told by the MoPNG that even if the costs are high, to treat it as a 'strategic project' for the country and take approval from its board for any waivers ahead of floating the tender.'Still, they haven't done it,' the source said.A JWG meeting scheduled for June 23 had to be postponed as Indian Oil Corporation, the common nodal agency for issuing the tender on behalf of the oil companies, could not meet the June 15 deadline on floating the tender.Around this time, INSA got into action and told T K Ramachandran, Secretary, Ministry of Ports, Shipping and Waterways that India 'require VLGC, not MR tankers', according to a source with knowledge of the discussions.
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