Essar, Malaysia International Shipping form LNG shipping JV

MUMBAI�Mumbai-based Essar Shipping has joined hands with Malaysia International Shipping Corp. (MISC) to form a 50-50 joint venture dedicated to the LNG transport. MISC, the national shipping line of Malaysia, is one of the world�s leading owners and operators of LNG tankers, but for Essar, this is a maiden foray into the lucrative but highly capital-intensive field of LNG carriage.

Essar Shipping�s recently appointed CEO, Sanjay Mehta, said, �...At a later date, we may both dilute our stakes equally in favor of a third strategic partner and continue to hold equal equity."

Among the most lucrative LNG transportation contracts currently up for grabs in India is one to ferry 5 million tonnes/year of gas from Ras Laffan Liquefied Natural Gas Co. (RasGas) in Qatar to the planned Dahej terminal�a project of the Indian government-owned Petronet LNG�on the Gujarat coast.

If it is able to win this contract, the Essar-MISC JV will immediately buy or charter two LNG carriers and put them on the Qatar-Dahej run.

Essar Shipping also expects to initiate talks with other LNG players in the country, including the Tata Enterprises-TotalFinaElf SA combine and the Dakshin Bharat Energy Consortium being set up by the AV Birla industrial group and US firm CMS Energy Inc.