BP last month ordered from South Korea's Samsung Heavy Industries Co. two new LNG tankers and secured options to buy three more vessels in an order worth more than $300 million.
Also, the LNG consortium led by Indian Oil Corp. (IOC) that recently received the right to build an LNG complex in eastern India plans to float four separate joint ventures to implement different segments of the project.
BP's order is part of a strategy to develop the group's international natural gas trade, said the company. IOC said its joint ventures will consist of shipping, terminal and regasification, pipeline network, and marketing and distribution.
Supports BP initiatives
Construction of BP's vessels will begin April 2001. Delivery of the first tanker is scheduled for fourth quarter 2002, and the second for first quarter 2003.
The vessels will use the Technigaz MKIII containment system with a storage capacity of 136,000 cu m. Overall vessel length will be more than 278 m with an 11.3 m design draught. Each will be powered by a main engine of 33,580 hp with a service speed of more than 20 knots.
BP said the vessels will be classified by Lloyd's Register and have been "specified to allow a high degree of flexibility and utilize the LNG experience of BP's shipping business" in their design, construction, and operation.
BP Gas & Power Chief Executive Richard Flury said the order was "part of a much broader set of investments and initiatives" embarked on by the group.
For examples, he pointed to a recent deal to supply LNG to the Dominican Republic, the "securing of access to the North American gas market via Cove Point in Maryland," and the decision to invest in the LNG regasification and power station at Bilbao, Spain.
Joint ventures
The IOC group plans to construct an LNG complex in the eastern Indian port city of Kakinada in Andhra Pradesh. For that project, it has floated four separate joint ventures to implement different segments of the 194 billion-rupee ($4.22 billion) project.
Other consortium members include Petronas of Malaysia and the Cocanada Port Co., a special-purpose vehicle floated by International Seaports Pte. Ltd. of Singapore.
IOC "will retain a 26% equity stake in each of the four joint ventures," said Subir Raha, an IOC official, adding that IOC is negotiating with consortium partners over how much equity each would like to take.
"The entire project will have a debt-equity ratio of 1:3," he added. "We will also retain the option of floating a fifth joint venture outfit for the purpose of building an LNG-fed power project in Kakinada."
The first phase of the Kakinada LNG project, which will cost 51.5 billion rupees, includes construction of the first LNG berth at a cost of 1.5 billion rupees, said Mohamed Asad Pathan, chairman of IOC. A pipeline network will cost 35 billion rupees, and storage and regasification facilities, 15 billion rupees.
A second LNG berth, costing 3 billion rupees, will be added during the second phase with a total cost of 63 billion rupees. Of that total, additional storage and regasification facilities will be 30 billion rupees and the related pipeline network, 30 billion rupees.
The third phase, costing 30 billion rupees, will involve inland and storage facilities and a distribution network for dimethyl ether, an alternate fuel. Another 40 billion rupees will be spent later to construct a power plant, Pathan said. The project has been given a letter of support by the Andhra Pradesh government that provides in-principle clearance for the consortium to implement the project.
In other India LNG news, Muri Mohamed, a senior Petronas official, said that the Malaysian company in 2003 would begin supplying LNG to India through US multinational Enron Corp. Details of the mode of shipping and the company to be used are being worked out.
